Breakfast Foods: The Market - US - November 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Steady growth unable to keep up with rate of inflation
• Rising prices impose challenges for market
• Competition is growing for breakfast foods
• Broad range of segments comprise breakfast foods
• Supermarket sales challenged by mass merchandisers
• Factors impacting breakfast food sales
• Top two suppliers declining; growth from smaller players
• Kellogg' s Special K and Sara Lee--brands target different breakfast needs
• Innovation driven by lifestyle attitudes towards health/wellness and time
• Advertising and promotional activity
• Market Size and Forecast
• Key points
• Breakfast bread and yogurt--propelling market growth now and in future
• Egg prices skyrocket, creating a spike in sales--will it stick?
• Sales and forecast of market
  • Figure 1: Total FDMx and in-store bakery sales of breakfast foods at current prices, 2003-13
  • Figure 2: Total FDMx and in-store bakery sales of breakfast foods at inflation-adjusted prices, 2003-13
• Wal-Mart sales
• Competitive Context
• Key points
• Increase in dollar sales driven by price increases
• Internal competition in the breakfast foods market
• The foodservice battle for breakfast
• Segment Performance--Overview
• Key points
• Increasing egg prices cause segment sales to soar, supporting market growth
• Yogurt, cereal bars and breakfast entrées making breakfast convenient
• Sales of market, by segment
  • Figure 3: Sales of breakfast foods, segmented by type, 2006 and 2008
• Segment Performance--Breakfast Breads
• Key points
• Rebounding from low-carb fad through innovations carrying a healthy halo
• Specialty breads go mainstream, fueling growth with premium prices
• Sales and forecast of breakfast breads
  • Figure 4: Sales of breakfast breads at FDMx and ISBs, 2003-13
• Segment Performance--Cereal
• Key points
• Obstacle: everyone eats cereal; competitive products
• Sales and forecast of cereal
  • Figure 5: FDMx sales of cereal, 2003-13
• Segment Performance--Sweet Breakfast Breads and Pastries
• Key points
• Segment aims at breakfast indulgence rather than breakfast health
• Sales and forecast of sweet breakfast breads and pastries
  • Figure 6: Sales of sweet breakfast breads and pastries at FDMx and ISBs, 2003-13
• Segment Performance--Eggs
• Key points
• Egg prices rise to unprecedented levels
• Premium eggs with higher retail sales prices fuel growth
• Sales and forecast of eggs
  • Figure 7: FDMx sales of eggs, 2003-13
• Segment Performance--Yogurt
• Key points
• Convenience and health characteristics drive segment sales
• The negative association: high sugar content
• Sales and forecast of yogurt
  • Figure 8: FDMx sales of yogurt, 2003-13
• Segment Performance--Breakfast Meats
• Key points
• Limited usage opportunities; competition offers greater convenience
• Sales and forecast of breakfast meats
  • Figure 9: FDMx sales of breakfast meats, 2003-13
• Retail Channels
• Key points
• Breakfast foods are a supermarket staple
• ISBs support the leading segment in the breakfast foods market
• Mass merchandiser/drug growing at the fastest rate
• Sales of market, by channel
• Figure 10: Total FDMx and in-store bakery sales of breakfast foods, by channel, 2006 and 2008
• Retail Channels--Supermarkets
• Key points
• Opportunities to strengthen market position
• Focus on bread segment
• Focus on egg segment
• Supermarket sales of breakfast foods
  • Figure 11: U.S. supermarket sales of breakfast foods, at current prices, 2003-08
• Retail Channels--In-Store Bakeries
• Key points
• More ISB units and higher prices drive sales in ISBs
• Opportunities to regain strong growth rates
• In-store bakery sales of breakfast foods
  • Figure 12: U.S. in-store bakery sales of breakfast foods, at current prices, 2003-08
• Market Drivers
• Rising food prices drive market sales
  • Figure 13: Average retail food costs, selected products, 2000-08
• What is driving higher food prices?
• The implication for the breakfast food market
• Consumers establishing healthier eating habits
• Not skipping breakfast--"the most important meal of the day"
• Making better food choices
• Time factors impact market
• Long commute times and traffic delays
  • Figure 14: Average commuting times in select major U.S. cities, October 2006
• The answer: making the commute earlier--impacting breakfast plans
• Leading Companies
• Key points
• Sara Lee and Groupe Danone reshape respective segments through innovation
• Private label offers strongest growth
• Manufacturer sales in market
  • Figure 15: Manufacturer FDMx sales of breakfast foods in the U.S., 2007 and 2008
• Brand Share--Breakfast Breads
• Key points
• George Weston Bakeries supports Thomas' brand with healthy innovations
• Sara Lee' s Soft & Smooth continues to fuel sales
• Manufacturer and brand sales of breakfast breads
  • Figure 16: Selected FDMx brand sales and market share of breakfast breads in the U.S., 2007 and 2008
• Brand Share--Cereal
• Key points
• Kellogg' s Special K garners rapid growth with its adult focus
• Kid-centric high sugar cereal brands continue to grow
• Manufacturer and brand sales of cereal
  • Figure 17: Selected FDMx brand sales and market share of cereal in the U.S., 2007 and 2008
• Brand Share--Sweet Breakfast Breads and Pastries
• Key points
• Kid-favorite brands, Pop-Tarts and Hostess Donettes, keep growing
• Entenmann' s and Hostess maintaining sales through on-the-go packs
• Manufacturer and brand sales of sweet breakfast breads and pastries
  • Figure 18: Selected FDMx brand sales and market share of sweet breakfast breads and pastries in the U.S., 2007 and 2008
• Brand Share--Eggs
• Key points
• A move towards branded shelled eggs
• ConAgra' s Egg Beaters with Yolk targets younger consumers
• Manufacturer and brand sales of eggs
  • Figure 19: Selected FDMx brand sales and market share of eggs in the U.S., 2007 and 2008
• Brand Share--Yogurt
• Key points
• Children' s yogurt brands challenged despite improving nutritional profile
• Dannon focuses on function and health; Yoplait courts dieters
• Manufacturer and brand sales of yogurt
  • Figure 20: Selected FDMx brand sales and market share of yogurt in the U.S., 2007 and 2008
• Brand Share--Breakfast Meats
• Key points
• Kraft' s Oscar Mayer brand dominates
• Sara Lee seeking to broaden the reach of Jimmy Dean brand
• Manufacturer and brand sales of breakfast meats
  • Figure 21: Selected FDMx brand sales and market share of breakfast meats in the U.S., 2007 and 2008
• Brand Qualities
• Kellogg' s Special K: Health, diet, convenience
• Sara Lee: Aligning traditional breakfast foods with happiness
• Innovation and Innovators
• Health and wellness
• Time
• Innovative comparisons
• Cereal and cereal bars
  • Figure 22: Top 10 cereal product launches, by product claim and year, 2003-08
  • Figure 23: Top 10 cereal bar product launches, by product claim and year, 2003-08
• Breakfast meals and breakfast proteins
  • Figure 24: Top 10 breakfast protein product launches, by product claim and year, 2003-08
  • Figure 25: Top 10 breakfast meal product launches, by product claim and year, 2003-08
• Yogurt and yogurt drinks
  • Figure 26: Spoonable and drinking yogurt product launches, 2003-08
  • Figure 27: Top 10 yogurt product launches, by product claim and year, 2003-08*
• Advertising and Promotion
• Overview
• Health benefits
• Diet slant
  • Figure 28: Kellogg' s Special K brand ad, 2006
  • Figure 29: Kellogg' s Special K ad "Stop skipping," 2007
• Wellness benefits
  • Figure 30: Cheerios ad "For young and old," 2006
  • Figure 31: Stonyfield Farms ad, "Just the good stuff," 2008
• Touting taste
  • Figure 32: Fiber One yogurt ad, "Delicious!," 2008
  • Figure 33: Eggland' s Best eggs ad, "A perfect marriage," 2008
  • Figure 34: Sara Lee Bagels ad, "All day," 2007
• New product launches
  • Figure 35: Froot Loop Straws ad, 2007
  • Figure 36: Lucky Charms ad, "The adventures continue," 2008
• Advertising to kids: marketing cereals
• Appendix: Segment Performance--Additional Segments
• Key points
• Sales of waffles/pancakes
  • Figure 37: FDMx sales of waffles/pancakes, at current prices, 2003-08
• Sales of cereal bars
  • Figure 38: FDMx sales of cereal bars, at current prices, 2003-08
• Sales of "other" breakfast foods
  • Figure 39: FDMx sales of other breakfast foods, at current prices, 2003-08
• Sales of drinkable breakfast foods
  • Figure 40: FDMx sales of drinkable breakfast foods, at current prices, 2003-08
• Sales of breakfast entrées
  • Figure 41: FDMx sales of breakfast entrées, at current prices, 2003-08
• Appendix: Brand Share--Additional Segments
• Key points
• Manufacturer and brand sales of waffles/pancakes
  • Figure 42: Selected FDMx brand sales and market share of waffles/pancakes in the U.S., 2007 and 2008
• Manufacturer and brand sales of cereal bars
  • Figure 43: Selected FDMx brand sales and market share of cereal bars in the U.S., 2007 and 2008
• Manufacturer and brand sales of "other" breakfast foods
  • Figure 44: Selected FDMx brand sales and market share of other breakfast foods in the U.S., 2007 and 2008
• Manufacturer and brand sales of drinkable breakfast foods
  • Figure 45: Selected FDMx brand sales and market share of drinkable breakfast foods in the U.S., 2007 and 2008
• Manufacturer and brand sales of breakfast entrées
  • Figure 46: Selected FDMx brand sales and market share of breakfast entrées in the U.S., 2007 and 2008
• Appendix: Trade Associations