Jumpstart the Morning Routine

It’s no secret that consumption of cereal, both hot and cold, has been on the decline as consumers increasingly choose more convenient and healthful foods for breakfast, states global market researcher Mintel in its October 2014 “Category Insight: Breakfast Cereals” report. In fact, between 2009 and 2014, breakfast cereal’s value sales declined 5 percent in the United States. To help turn sales around, retailers and manufacturers will likely have to innovate within the category, in both packaging and product development.

Too busy to sit down

According to “Cereal Production in the US,” a July 2014 report from IBISWorld, New York, consumers are busier than ever and no longer have the time to sit down to eat a bowl of cereal. This reality is leading to increased demand for convenient snacks and meals that can be eaten on the run. Major national brands have attempted to blur the line between breakfast and snacks with breakfast bars.

But bars aren’t the only solution for companies that are willing to think “outside the box.” For example, in 2013, General Mills released BFast, a shelf-stable drink made from milk with the nutrition profile of a bowl of breakfast cereal, reports a June 1, 2013, article on StarTribune.com. Kellogg Co. also introduced a breakfast shake in 2013 called Kellogg’s To Go.

Retailers could also take a page from MOM Brands, which uses a resealable bag for most of its cereals, states Nicholas Fereday, global senior analyst with Rabobank’s Food & Agribusiness Research and Advisory group, in his April 2013 report, “The Cereal Killers: Five Trends Revolutionizing the American Breakfast.” Not only does it claim to use 75 percent less packaging than other companies that use traditional boxes, but it also makes the cereal more convenient and easy to take on the go. But besides convenience, the market is seeing a trend toward nutritionally functional cereals and granolas that offer consumers omega-3 oils or are a good source of fiber, states Noah Frank, director of operations, Stephano Group Ltd., North York, Ontario. Protein and fiber are two things, in particular, that American consumers are looking for in their cereals.

More functional

For a long time, consumers have been more interested in protein and less interested in carbohydrates, leading to a fall in consumption of cereal and a rise in consumption of Greek yogurt, Fereday says.

Mintel’s research supports this. It states that among U.S. consumers who report they are eating less cereal, 33 percent indicate they are looking for breakfast items with more protein; however, only 4 percent of breakfast cereals launched in North America during the 12 months ending in September 2014 were marketed as high in protein.

General Mills did introduce Cheerios Protein cereal in May 2014 The cereal uses soy and lentils to up the amount of protein it offers per serving, Mintel says. Similarly, retailers could offer consumers cereals that use legume and nut flour rather than wheat, rice or corn flour.

In addition to protein, 23 percent of U.S. consumers say they are looking for breakfast items with more fiber, and 24 percent are looking for breakfast items with less sugar, Mintel reports. However, only 6 percent of breakfast cereals launched in North America during the 12 months ending in September 2014 were marketed as low/no/reduced sugar. A higher percentage of cereals — 25 percent — were marketed as high in fiber.

Retailers also could consider using chia seeds as a way of increasing protein, fiber, minerals and antioxidants in breakfast cereals. Mintel’s October 2014 report, “Category Expert Insight: Chia Is The Latest ‘Super’ Ingredient To Move Into Cereal,” states that chia seeds contain the most grams of dietary fiber per serving of all grains and seeds that have achieved “super” status, including flaxseed, kamut and quinoa. Yet less than half of chia-containing products are positioned as “high in fiber.”

“Since the high-fiber positioning can be easily claimed through current research and data, there is no reason not to use it, especially in a category such as cereal, which represents a major ‘fiber investment’ for consumers, who depend on cereal to help them achieve their daily requirements of the nutrient,” the October 2014 Mintel report states.

Invest in the future

But the development of high-protein cereals that use legumes or high-fiber cereals that use chia could be rather costly for retailers.

“Switching to more expensive food ingredients will hit margins in the short-term, but in the longer-term, it may well prove to be the best strategic investment ever made,” Fereday says.

And now might be the best time to do it.

“As more Americans become health-conscious, they are also attaining knowledge about vitamins and other health benefits, causing demand for organic and whole-grain cereals to increase,” IBISWorld states.

Additionally, between 2014 and 2019, rising levels of per-capita disposable income will encourage consumers to purchase more high-end cereal. And cereals that are known for their healthful additions such as dried fruit or extra fiber add to the perceived quality of the product, IBISWorld adds. So in the next five years, consumers not only will want to purchase higher-quality cereal that is better for them, but also will have the income to be able to do so.

And for many manufacturers, offering healthful products is an important part of doing business. Napa, Calif.-based Nature’s Habit is one company that places a high value on creating healthful private brand products, including granola.

“Consumers want to know what they’re eating, and they want it to taste good,” says Todd Whitten, vice president of sales and marketing for Nature’s Habit. “But you don’t have to change the world. You just have to make a healthy product that tastes great.”

One way Nature’s Habit markets its products as healthful is by using colorless see-through pouches that contain just one simple label on the front. When consumers look at the product, it’s easy to read all of the listed ingredients and see the whole nuts and fruits in the pouch.

“We decided that if we’re going to sell healthy products, we should make it look as healthy as possible,” Whitten adds. “So the packaging goes back to those health food store roots, and response to it has been huge — people love being able to see the granola they’re about to buy.”

Do offer cereals and granolas hat are high in protein.

Don’t shy away from using chia seeds or ancient grains to boost fiber content.

Do invest in the future by switching to high-quality ingredients.

Don’t underestimate the convenience needs of busy consumers.