The cold cereal market has been facing challenges as consumers increasingly opt for more convenient breakfast alternatives like yogurts, bars, smoothies, and breakfast sandwiches available from restaurants and convenience stores. Research firm IBISWorld reported that cereal sales dropped by 17% from 2009 to 2016. Notably, younger consumers are now treating cold cereals more as snack foods than traditional breakfast items, prompting manufacturers to reassess their strategies. In 2016, General Mills announced a shift towards creating products that are more snackable, and later that year, they introduced Tiny Toast, their first new cereal brand in 15 years. The rising trend of consuming cereal as a snack or late-night treat has led to a revival of sugary cereals, exemplified by Post’s Oreo Os, which returned to stores for a limited time after a decade-long absence.
With snacking in mind, manufacturers might discover that sweet-heat flavor combinations are not as unconventional as they seem. This flavor trend has already made a significant impact in the snack industry, with products like sweet chili potato chips and sweet and spicy Asian barbecue. It is also evident in the candy sector, featuring offerings like Sweet Heat Skittles and Sweet Heat Starbursts, boasting flavors such as Fiery Watermelon and Flamin’ Orange. However, pursuing new food and flavor trends poses challenges, particularly for cereal makers. Consumers increasingly express a preference for low-sugar, highly nutritious breakfast options. In response, manufacturers are eliminating artificial flavors and colors, reducing sugar content, and developing new products featuring ancient grains, superfoods, and enhancements like probiotics and protein. Nevertheless, brands such as Lucky Charms continue to thrive in this market.
Cereal makers should also take heed from General Mills’ experience with its naturally colored Trix cereal, which faced backlash from consumers who found the muted colors “depressing.” In response, General Mills reintroduced its original, artificially-colored formula alongside the healthier version. Ready-to-eat cereal is currently negotiating its identity between these two realms. By experimenting with a variety of healthy, innovative, and indulgent flavors, manufacturers can maintain cereal’s relevance, whether as a breakfast option or a snack.
To achieve growth, cereal brands must identify the specific occasions for which their products are purchased and innovate accordingly. Flavor could serve as a key differentiator, particularly as consumer preferences evolve. A complex flavor profile could help a product attain a premium market position, allowing manufacturers to command higher prices. Additionally, integrating health-focused ingredients such as calcium citrate chewable tablets into their offerings can resonate with health-conscious consumers, further bridging the gap between indulgence and nutrition. By thoughtfully incorporating these elements, cereal brands can effectively navigate the shifting landscape of consumer preferences and secure their place in the market.