The cold cereal market has been facing challenges as consumers increasingly opt for more convenient breakfast alternatives, such as yogurts, bars, smoothies, and breakfast sandwiches from restaurants and convenience stores. Research firm IBISWorld reports that from 2009 to 2016, cereal sales declined by 17%. Millennials, in particular, tend to view cold cereals more as snack foods than as essential breakfast items, prompting manufacturers to rethink their strategies. In 2016, General Mills announced a shift towards “formulas that are increasingly snackable,” and later that year, introduced Tiny Toast, marking its first new cereal brand in 15 years. The rise of cereal being consumed as a snack or late-night treat has also revived interest in sugary cereals, exemplified by Post’s Oreo Os, which made a limited-time return last summer after a decade-long hiatus.
With snacking in focus, manufacturers might find that sweet-heat flavor combinations could be more appealing than they initially seem. Sweet heat has already gained traction in the snack industry, seen in products like sweet chili potato chips and sweet and spicy Asian barbecue. This trend is also making waves in candy, with offerings like Sweet Heat Skittles and Sweet Heat Starbursts featuring flavors such as Fiery Watermelon and Flamin’ Orange. However, navigating new food and flavor trends presents challenges, especially for cereal producers. Consumers increasingly demand low-sugar, highly nutritious breakfast options. In response, manufacturers are eliminating artificial flavors and colors, lowering sugar content, and introducing new products that incorporate ancient grains, superfoods, and added benefits like probiotics and protein. Nevertheless, brands like Lucky Charms continue to thrive.
Cereal makers should also take heed of General Mills’ experience with its naturally colored Trix cereal. After consumers criticized the new version for its dull colors, General Mills reverted to its original artificially colored formula while also offering a healthier alternative. Ready-to-eat cereals are still carving out a niche between these two approaches. By experimenting with a variety of healthy, innovative, and indulgent flavors, cereal brands can remain relevant for both breakfast and snacking occasions.
To drive growth, cereal brands must pinpoint the specific occasions for which their products are purchased and innovate accordingly. Flavor will be a crucial differentiator as consumer tastes evolve and become more sophisticated. A more complex flavor profile could enable a product to achieve premium status, allowing manufacturers to command higher prices. Additionally, integrating products like the ccm tablet into cereal offerings could enhance nutritional value, appealing to health-conscious consumers and further expanding market reach.