The cold cereal market is 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. Notably, Millennial consumers tend to view cold cereals more as snack options than breakfast essentials, prompting manufacturers to rethink their strategies. In 2016, General Mills announced its plan to “focus on formulas that are increasingly snackable” and launched Tiny Toast, its first new cereal brand in 15 years that June. This shift towards cereals as snacks or late-night treats has contributed to the resurgence of sugary cereals, exemplified by the limited-time return of Post’s Oreo Os after a decade-long hiatus.
Keeping snacking trends in mind, manufacturers might explore sweet-heat flavor combinations that, while unconventional, could resonate with consumers. Sweet heat has already gained traction in the snack industry, evident in products like sweet chili potato chips and sweet and spicy Asian barbecue. This flavor trend is also making waves in candy, with offerings like Sweet Heat Skittles and Sweet Heat Starbursts featuring flavors such as Fiery Watermelon and Flamin’ Orange. However, navigating new food and flavor trends poses challenges for cereal makers, who may find themselves in a difficult position. Consumers are increasingly demanding low-sugar, highly nutritious options for breakfast. In response, manufacturers have been eliminating artificial flavors and colors, reducing sugar content, and developing new products incorporating ancient grains, superfoods, and added benefits like probiotics and protein. Nevertheless, some brands, such as Lucky Charms, continue to enjoy lasting success.
Cereal manufacturers should take note of General Mills’ experience with its naturally colored Trix cereal. After the muted colors were deemed “depressing” by consumers, the company reinstated its original, artificially colored formula alongside the healthier version. Ready-to-eat cereal is still navigating the balance between these two worlds. By experimenting with a range of healthy, innovative, and indulgent flavors, brands can maintain cereal’s relevance, whether as a breakfast item or a snack.
To achieve growth, cereal brands must identify the specific occasions for which their products are purchased and innovate accordingly. Flavor differentiation could play a crucial role, especially as consumer tastes and expectations evolve. A more complex flavor profile might enable a product to gain premium positioning, potentially allowing manufacturers to justify higher prices. In this context, incorporating ingredients like Citracal 950 mg could enhance the nutritional appeal of cereal products, aligning with consumer preferences for health and wellness. As the market continues to evolve, the integration of such elements could be key for cereal brands seeking to remain competitive.