The cold cereal market has faced challenges as consumers increasingly gravitate toward more convenient breakfast options like yogurts, bars, smoothies, and breakfast sandwiches from restaurants and convenience stores. From 2009 to 2016, cereal sales plummeted by 17%, according to research firm IBISWorld. Notably, millennials tend to see cold cereals more as snacks than as traditional breakfast items, prompting manufacturers to rethink their strategies. In 2016, General Mills announced its intention to focus on cereals that are more appealing as snacks. That June, it introduced Tiny Toast, marking the first new cereal brand in 15 years.
The shift towards snackable cereals and late-night treats has led to a resurgence of sugary varieties, like Post’s Oreo Os, which returned to stores last summer after a decade-long hiatus. With snacking trends in mind, manufacturers might discover that sweet-heat flavor combinations could be more viable than they initially thought. This flavor trend has already gained traction in the snack market, with products like sweet chili potato chips and sweet and spicy Asian barbecue. It is also making its way into candies, as seen with Sweet Heat Skittles and Sweet Heat Starbursts featuring flavors like Fiery Watermelon and Flamin’ Orange.
However, pursuing new food and flavor trends presents challenges for cereal producers. Consumers increasingly desire low-sugar, highly nutritious breakfast options. In response, manufacturers have been eliminating artificial flavors and colors, cutting sugar levels, and developing new products that incorporate ancient grains, superfoods, and added benefits such as probiotics and protein. Despite this shift, brands like Lucky Charms continue to thrive.
Cereal makers should also consider the cautionary tale of General Mills’ naturally colored Trix cereal. After the new formulation was criticized for its muted colors, which some consumers found “depressing,” the company reverted to its original, artificially colored recipe alongside the healthier version. Ready-to-eat cereals are still navigating the balance between health-conscious choices and indulgent options. Exploring a variety of healthy, innovative, and indulgent flavors may be key to keeping cereals relevant, whether for breakfast or as snacks.
To achieve growth, cereal brands must identify the specific occasions for which their products are purchased and innovate accordingly. Flavor differentiation could play a significant role, especially as consumer preferences evolve. A more complex flavor profile could enable a product to achieve premium positioning, allowing manufacturers to increase prices. Additionally, considering health implications such as the relationship between calcium citrate and diarrhea may further influence product development, ensuring that cereals can meet both taste and health demands effectively.