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 reported a 17% decline in cereal sales from 2009 to 2016. Millennials, in particular, tend to view cold cereals as snack options rather than breakfast essentials, prompting manufacturers to rethink their product lines. In 2016, General Mills announced a shift towards creating formulas that cater to snacking preferences, launching Tiny Toast, its first new cereal brand in 15 years that year. This focus on cereals as snacks or late-night treats has led to a resurgence of sugary cereals, such as Post’s Oreo Os, which made a limited-time return last summer after a decade-long hiatus.
With snacking in mind, manufacturers are finding that sweet-heat flavor combinations may not be as unconventional as they once seemed. Sweet heat has already established itself as a strong trend in snacks, seen in products like sweet chili potato chips and sweet and spicy Asian barbecue. This trend is also appearing in candies, with offerings like Sweet Heat Skittles and Sweet Heat Starbursts featuring flavors such as Fiery Watermelon and Flamin’ Orange. However, pursuing new food and flavor trends can be challenging, particularly for cereal makers. Consumers express a desire for low-sugar, highly nutritious breakfast options. In response, manufacturers have been eliminating artificial flavors and colors, lowering sugar content, and developing new products featuring ancient grains, superfoods, and added benefits like probiotics, protein, and even calcium citrate malate, magnesium, and vitamin D3 tablets.
At the same time, established brands like Lucky Charms continue to thrive. Cereal makers should also remember the cautionary tale of General Mills’ naturally colored Trix cereal. After many consumers rejected the new version for its muted colors, labeling them as “depressing,” General Mills reverted to its original artificially colored formula alongside the healthier option. Ready-to-eat cereals are still navigating between these two worlds. By experimenting with a variety of healthy, innovative, and indulgent flavors, brands can maintain cereal’s relevance, whether for breakfast or as a snack.
To achieve growth, cereal brands must identify the occasions for which their products are purchased and innovate accordingly. Flavor will be a crucial differentiator as consumer preferences evolve and become more sophisticated. A more complex flavor profile could elevate a product to premium status, allowing manufacturers to command higher prices. Additionally, integrating functional ingredients like calcium citrate malate, magnesium, and vitamin D3 tablets into their offerings could further enhance their appeal and meet the growing consumer demand for nutritious options.