Breakfast Cereal - US - September 2009

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources and methodology
• Sales data
• Consumer survey data
• Advertising clips
• Abbreviations
• Terms
• Executive Summary
• Well-established market leaves little room for growth
• Competition for the food dollar
• Market drivers mostly positive
• Cold cereal controls market
• Supermarkets command majority of sales
• Kellogg and General Mills battle for top spot
• Brand focus: Kellogg' s Special K--the diet-friendly cereal
• Innovation driven by attitudes toward health, convenience and flavor
• Advertising and promotion of cereals
• The breakfast cereal consumer
• Frequency of usage
• Cereal for breakfast, lunch, dinner, and snacks
• Most important attributes: Taste, price, whole grains, familiar flavor, fiber, and sugar
• Reasons for eating cereal: Convenience, health, and value
• Attitudes toward price
• Attitudes towards trial and brand
• Kids' and teens' use of cereal
• Custom consumer groups: Moms and dads
• Market Size and Forecast
• Growth difficult in saturated market
• Increasing usage per eater
• Raising prices
• Sales and forecast of market
  • Figure 2: Total U.S. breakfast cereal sales and forecast, at current prices, 2004-14
  • Figure 3: Total U.S. breakfast cereal sales and forecast, at inflation-adjusted prices, 2004-14
• Competitive Context
• Myriad choices available
  • Figure 4: Types of breakfast foods eaten, February 2008-March 2009
• Convenience of cereal bars
• Nutritional content of yogurt
• The special treat
• Price sensitivity creates internal competition
  • Figure 5: Breakfast cereal purchase behavior, June 2009
• The foodservice battle for breakfast
• Segment Performance
• Overview
• Cold cereal dominates and provides growth
  • Figure 6: FDMx sales of breakfast cereal, by type and sugar content, 2007 and 2009
  • Figure 7: FDMx sales of breakfast cereal, segmented by type, 2004-09
  • Figure 8: Total U.S. sales and forecast of breakfast cereal at current prices, by segment, 2004-14
• Segment Performance--Cold Cereal
• Key points
• Medium-high sugar cereals successful by striking a balance for consumers
• Ramping up health perceptions
• Sales and forecast of cold cereal
  • Figure 9: Total U.S. sales and forecast of cold cereal, 2004-14
• Cold cereal sales by sugar content
• Low sugar cold cereal
  • Figure 10: FDMx sales and forecast of low sugar cold cereal, 2004-14
• Medium sugar cold cereal
  • Figure 11: FDMx sales and forecast of medium sugar cold cereal, 2004-14
• Medium-high sugar cold cereal
  • Figure 12: FDMx sales and forecast of medium-high sugar cold cereal, 2004-14
• High sugar cold cereal
  • Figure 13: FDMx sales and forecast of high sugar cold cereal, 2004-14
• Segment Performance--Hot Cereal
• Key points
• Trade down trend hurting segment performance
• Competition squeezing out hot cereals
• Sales and forecast of hot cereal
  • Figure 14: Total U.S. sales and forecast of hot cereal, 2004-14
• Retail Channels
• Key points
• Cereal is a supermarket staple
• Mass merchandiser/other growth rates very strong
• Sales of market, by channel
  • Figure 15: Total U.S. sales of breakfast cereal, by retail channel, 2007 and 2009
• Retail Channels--Supermarket/Food Stores
• Key points
• Supermarkets faced with challenges--implementing changes
• Supermarkets aggressive in promoting private label programs
  • Figure 16: Total U.S. sales of breakfast cereal at supermarkets/food stores, 2004-09
• Retail Channels--Mass Merchandiser, Drug and Other
• Key points
• Target hits the bull' s eye with tiered private label brands
  • Figure 17: Total U.S. sales of breakfast cereal at mass and other, 2004-09
• Natural Channel Sales
  • Figure 18: Natural product supermarket retail sales of breakfast cereal, at current prices, 2007-09
  • Figure 19: Natural product supermarket retail sales of breakfast cereal, at inflation adjusted prices, three years ending July 11, 2009*
• Implications
• Natural channel sales by segment
  • Figure 20: Natural product supermarket retail sales of breakfast cereal, by segment, 2007-09
• Brand sales
• Nature' s Path and Weetabix' s Barbara' s surge
  • Figure 21: Manufacturer brand natural supermarket sales of breakfast cereal*, 2007 and 2009
• Natural channel sales of organic cereal
  • Figure 22: Natural product supermarket retail sales of breakfast cereal*, by organic/non-organic, 2007-09
• Natural channel sales of gluten-free breakfast cereal
  • Figure 23: Natural product supermarket retail sales of breakfast cereals, by gluten-free, 2007-09
• Market Drivers
• Higher prices
• Recession is good for cereal sales
• Perception of health benefits drives routine usage among adults
  • Figure 24: Routine use of cereal for breakfast, July 2009
  • Figure 25: Reasons to eat cereal, routine users vs. non-routine users, July 2009
• Not skipping breakfast--"the most important meal of the day"
  • Figure 26: Kellogg' s Frosted Mini Wheats, More than just coffee, June 2009
• Population growth insufficient to drive meaningful gains
  • Figure 27: Population by age, focus on kids, 2009-14
• Long commutes and traffic delays
  • Figure 28: Average commuting times in select major U.S. cities, October 2006
• Making the commute earlier--impacting breakfast plans
• One in seven too busy for cereal
  • Figure 29: Factors impacting breakfast habits, by gender, June 2009
  • Figure 30: Factors impacting breakfast habits, by age, June 2009
  • Figure 31: Factors impacting breakfast habits, by presence of children, June 2009
• Leading Companies
• Brand leaders raise prices, decrease package sizes
• Private label sales flourish
• Company sales
  • Figure 32: FDMx sales of leading breakfast cereal companies, 2008 and 2009
• Selected Brand Analysis--Low Sugar Cold Cereal
• Key points
• Cheerios and Rice Krispies--classic kid brands dominate sales
• General Mills' Fiber One gains while other fiber-rich cereals plummet
• Manufacturer and brand sales of low sugar cold cereal
  • Figure 33: Selected FDMx brand sales of low sugar cold cereal in the U.S., 2008 and 2009
• Selected Brand Analysis--Medium Sugar Cold Cereal
• Key points
• Kellogg' s Special K dominates via adult focus and flavor diversity
  • Figure 34: FDMx brand sales of medium sugar cold cereal in the U.S., 2008 and 2009
• Selected Brand Analysis--Medium-high Sugar Cold Cereal
• Key points
• General Mills' MultiGrain Cheerios "healthy enough"
• Post Just Bunches brand off to a good start
• Manufacturer and brand sales of medium-high sugar cold cereal
  • Figure 35: FDMx brand sales of medium-high sugar cold cereal in the U.S., 2008 and 2009
• Selected Brand Analysis--High Sugar Cold Cereal
• Key points
• Kellogg' s gives kid-centric brands a healthier makeover
• General Mills focused on fun
• Manufacturer and brand sales of high sugar cold cereal
  • Figure 36: FDMx brand sales of high sugar cold cereal in the U.S., 2008 and 2009
• Selected Brand Analysis--Hot Cereal
• Key points
• Private label hot cereal stealing market share
• Manufacturer and brand sales of hot cereal
  • Figure 37: FDMx brand sales of hot cereal in the U.S., 2008 and 2009
• Brand Qualities Case Study: Kellogg' s Special K
• Alignment as a diet-friendly cereal
  • Figure 38: FDMx brand sales of leading diet* cereals in the U.S., 2008 and 2009
• Connecting with women
  • Figure 39: Special K Challenge, Bikini vs. You, May 2009
• Extending the brand
• Innovation and Innovators
• Health and wellness
• Convenience
• Flavor and fun
• Focused on fun
• Leading new product claims
  • Figure 40: Top 10 cereal product launches by product claim and year, 2004-09
• Advertising and Promotion
• Recession fuels need for more advertising to stave off private label
• Ad spend remains flat
  • Figure 41: Top cereal advertisers*, 2007 and 2008
• The traditional route: Targeting kids with cartoon fun
  • Figure 42: General Mills Cereals, Measuring Up, August 2008
  • Figure 43: General Mills Lucky Charms, Mini Lucky Charms, June 2009
• Bridging the gap: One brand targeting both kids and adults
  • Figure 44: General Mills Honey Nut Cheerios, Bee Happy Bee Healthy, February 2009
  • Figure 45: General Mills Honey Nut Cheerios, Buzz Saves the Day, May 2009
• Consumption
• Key points
• Household usage
• Cold cereal
• Hot cereal--household usage
  • Figure 47: Household use of cereal, hot and cold, by age and presence of children, February 2008-March 2009
• Frequency of use per week
  • Figure 48: Weekly portions of cereal eaten, by age, race/Hispanic origin, and presence of children, February 2008-March 2009
• Brand Usage
• Brand usage
  • Figure 49: Leading brands of cold cereal used, February 2008-March 2009
  • Figure 50: Leading brands of cold cereal used, by household size, February 2008-March 2009
• Hot cereal
  • Figure 51: Leading brands of hot cereal used, February 2008-March 2009
• Breakfast, Lunch, Dinner and Snacks
• Key points
• How cereal is used
  • Figure 52: How cereal is used, by gender, June 2009
  • Figure 53: How cereal is used, by age, June 2009
  • Figure 54: How cereal is used, by presence of children, June 2009
• Most Important Attributes of Cereal
• Key points
• Cereal attributes that influence purchase
  • Figure 55: Important attributes of cereal, by age, June 2009
  • Figure 56: Important attributes of cereal*, by household income, June 2009
• Reasons Why Cereal is Eaten
• Key points
• Reasons for eating cereal
  • Figure 57: Reasons for eating cereal, by age, June 2009
  • Figure 58: Reasons for eating cereal, by household income, June 2009
  • Figure 59: Reasons for eating cereal, by presence of children, June 2009
  • Figure 60: Reasons for eating cereal, by gender, June 2009
• Purchasing Behavior
• Key points
• Sampling, couponing, and trading down
  • Figure 61: Cereal purchasing and eating behaviors, by gender, June 2009
  • Figure 62: Purchasing and eating behaviors, by age, June 2009
  • Figure 63: Purchasing and eating behaviors, by household income, June 2009
  • Figure 64: Purchasing and eating behaviors, by presence of children, June 2009
• Attitudes Towards Cereal
• Key points
• Women, younger, and higher-income demos keen on variety
  • Figure 65: Attitudes towards cereal, by age, June 2009
  • Figure 66: Attitudes towards cereal, by household income, June 2009
  • Figure 67: Attitudes towards cereal, by presence of children, June 2009
  • Figure 68: Attitudes towards cereal, by gender, June 2009
• Interest in Artificial Sweetener
• Older, wealthier consumers seeking artificial sweeteners
  • Figure 69: Interest in artificial sweetener, by age, June 2009
  • Figure 70: Interest in artificial sweetener, by household income, June 2009
  • Figure 71: Interest in artificial sweetener, by presence of children, June 2009
• Impact of Race/Hispanic Origin
• Key points
• Household usage
• Cold cereal
• Hot cereal
  • Figure 72: Household use of cereal, hot and cold, by race/Hispanic origin, February 2008-March 2009
• Reasons for eating cereal
  • Figure 73: Reasons for eating cereal, by race/Hispanic origin, June 2009
• Purchasing and eating behaviors
  • Figure 74: Purchasing and eating behaviors, by race/Hispanic origin, June 2009
• Kids' and Teens' Use of Breakfast Cereal
• Key points
• Near-universal penetration among children for cold cereal
  • Figure 75: Incidence of kids' consumption of cereal, by gender and age, October 2007-December 2008
• Availability of favorite brands in home
  • Figure 76: Prevalence of child' s favorite cereal in home, October 2007-December 2008
• Penetration declines as kids become tweens and teens
  • Figure 77: Incidence of teens' consumption of cereal, by gender and age, October 2007-December 2008
• Getting to decide on brands
  • Figure 78: Incidence of teens' ability to decide which brands of cereal to buy, October 2007-December 2008
• Appendix: Other Useful Consumer Tables
  • Figure 99: Factors impacting breakfast habits, by household income, June 2009
• Important attributes of cereal
  • Figure 100: Important attributes of cereal, by gender, June 2009
  • Figure 101: Important attributes of cereal, by presence of children, June 2009
  • Figure 102: Important attributes of cereal, by race/Hispanic origin, June 2009
  • Figure 103: Attitudes towards cereal, by race/Hispanic origin, June 2009
• Important attributes when buying cereal for kids
  • Figure 104: Important attributes when buying cereal for kids, by race/Hispanic origin, January 2009
• Appendix: Penetration of Cereal by Mosaic Classification
• Cold cereal
  • Figure 105: Incidence of household consumption of cold cereal, by mosaic, February 2008-March 2009
• Hot cereal
  • Figure 106: Incidence of household consumption of hot cereal, by mosaic, February 2008-March 2009
• Mosaic definitions
• Appendix: Personal Consumption Among Online Respondents
  • Figure 107: Personal usage and purchase of breakfast cereal, by age and presence of children, June 2009
• Appendix: New QSR Breakfast Offerings
• Appendix: Trade Associations