Americans’ eating habits are changing—particularly the way they eat breakfast.
Breakfast still has the reputation of being the most important meal of the day, but traditional cereals are struggling to keep their place in the daily lineup. Changing consumer habits reflect a more snackable, on-the-go culture that’s forcing evolution in the cereal category.
The Overview
According to market researcher Mintel, cold cereal sales are going to remain somewhat soggy. The 2017 “State of the Specialty Food Industry” research reports that specialty cold cereal dipped 1.8 percent in dollar sales from 2014 to 2016, to $701 million, and 2.4 percent in unit sales.
In its “Hot & Cold Cereals, August 2015” report, Mintel predicts total cold cereal sales will decline 21.8 percent by 2020. Mintel attributes the deterioration to consumers eating less cold cereal in favor of other breakfast items with more protein or fiber. They found that consumers also believe cold cereal has too much sugar or is too processed.
More natural, better-for-you offerings will appeal to consumers, with greater exploration in convenience opening even more possibilities. Mintel reports 12 percent of consumers who are eating less cold cereal say they lack the time to eat breakfast, and 11 percent find cereal inconvenient to eat on the go.
Sales of hot cereal, on the other hand, have been anything but lukewarm. This year’s “State of the Specialty Food Industry” report says they have grown 10.7 percent between 2014 and 2016, to $142 million. Unit sales were up 25.2 percent in the same time period. In further research, Mintel notes that innovative product launches, such as those that include mix-ins and on-the-go single-serve cups, helped drive the segment’s growth.
Supermarkets and drugstores have certainly seen dips in hot and cold cereal sales. From 2010 to 2015, supermarket sales dropped 10.5 percent, and drugstore cereal sales fell 1.9 percent, reports Mintel. The natural channel, however, has witnessed strong sales growth in the total cereal category: Hot and cold cereal grew 13.8 percent and 16.9 percent between 2013 and 2015.
“There’s a lot of activity in the natural and specialty channel,” observes Kara Nielsen, an Oakland, Calif.-based food trend expert. “New and interesting cereals and brands that have a toehold in the aisles address cleaner ingredients and dietary needs.”
The Trends
Here are some trends and innovations that might give the breakfast bowl new meaning:
1. Breakfast Becomes Popular as an
Anytime Portable Snack
While baby boomers and generation Xers fuel much of the sales of cold cereal, millennials and their incessant snacking habits are forcing cereal makers to think out of the box. According to Mintel’s “Hot & Cold Cereals” report, some 40 percent of millennials surveyed said that cereal was an inconvenient breakfast choice because they had to clean up after eating it, leaving those with morning hunger pangs to seek options that are portable, can be prepared quickly, and are consumed on the go with minimal cleanup.
“While the busy millennial does not gravitate towards cold cereal as previous generations did, bowls of cereal and milk are now seen as a healthy indulgence for late-night snacks, rather than breakfast. Hot cereals are often enjoyed at the office or from foodservice,” says Renee Wheeler, a consultant with market research company The Hartman Group.
Retailers are also noticing this shift, especially in terms of sales. “I can’t sell a stinking box of cereal, but instant on-the-go oatmeal cups, like Bob’s Red Mill and Umpqua Oats, fly off the shelves. Quick and fast is what it’s all about these days,” says Debra McAdams, assistant manager at Withey’s Health Foods, in Kalispell, Mt. McAdams notes that protein shakes and smoothies are also detracting from boxed cereal sales.
2. Granola Is Still Going Strong
Even though it can be higher in calories, granola, for its perceived healthfulness and portable snack appeal, seems to be back in the spotlight.
“Granola is absolutely outperforming cold cereal by far,” says Ethan Lohse, grocery manager, World Foods Market, Portland, Ore. Lohse says granolas’ cleaner ingredient panel and on-the-go appeal are two reasons it’s doing so well and touts brands like Crapola! Granola, Ranger Chocolate Granola, and Nora’s Kitchen.
Nielsen says granola also has local appeal and alternative sugar sources fueling its success. “Everyone likes to buy locally, and you can find granola made almost anywhere. And a lot of it is sweetened with alternative sugar like honey, maple syrup, or coconut sugar. These not only have a wholesome health halo but also translate into new flavor dimensions,” she says.
At Woodstock Farmers’ Market in Vermont, granolas are featured in the center shelves with natural flake-style cereal on the bottom shelves, and hot cereals on the top. “Obviously, granola is the winner,” says Woodstock’s grocery team leader Amelia Rappaport. Granolas that shine at Woodstock are GoodMix and two local Vermont brands: Back Roads Coconut Crunch Organic Paleo, and Nutty Steph’s Vermont Granola.
“While it’s a pretty saturated category,” says Laura Heifetz, specialty food buyer, Greene Grape Provisions, Brooklyn, N.Y., “it gives you a bit of everything in one bite, and customers like that.”
3. Better-For-You Cereal Ingredients Gain Momentum
With other breakfast options continuing to invade cereal’s space, makers are coming up with an ingredient list that is healthier—and trendier. More fruits, vegetables, whole grains, and protein sources are prevalent.
Nielsen commends Earnest Eats for using antioxidant-rich coffee flour to power its line of grain-based Energized Hot Cereals. Coffee flour is made from the fruit that surrounds a coffee bean, which is typically discarded during coffee processing. This superfruit gives the cereal an earthy, roasted flavor while adding a subtle caffeine boost and sustained energy. “It’s a positive and healthful way to use a food byproduct and a new type of fortification that actually means something to consumers,” Nielsen notes. The company is working on new hot cereals fortified with grass-fed whey and South American superseed sacha inchi.
Back to the Roots is using biodynamic wheat in its Organic Stoneground Cinnamon Clusters. The company recently secured a spot on the breakfast menus of New York City schools when the Department of Education decided to replace two Kashi cereals that were discontinued by Kellogg, with the Cinnamon Clusters and the company’s Purple Cornflakes, both organic with lower sugar and sodium levels than its predecessors.
Other cereals with ‘smart’ ingredients include Bitsy’s Brainfood Berry Blast, an organic cereal made with cornflower and brown rice, and fortified with vegetable powder such as sweet potato, pumpkin, spinach, and carrot; and Love Grown Chocolate Power O’s made with a blend of lentils, and navy and garbanzo beans.
What’s Next
According to Mintel, personalization is going to be critical moving forward as consumers enjoy adding ingredients to their cereal, and want to make the products they eat customized to their own individual tastes. This should give makers an opportunity to create mix-in packs of fruit, granola, and other tasty fortified ingredients, to help consumers add as little or as much of ‘their personal cereal touch.’
The Hartman Group says other areas of innovation will come from modern cereal brands that can provide consumers with a more holistic sense of health and wellness, including positive traits and production methods like organic and non-GMO. On the flip side, expect a continued focus on nostalgia and limited-time offerings, particularly among traditional sugar-based cereals.
Other up-and-coming items include grain-free granolas; on-the-go eats that provide healthful, flexible eating opportunities; and more savory hot cereals, such as Straw Propeller Gourmet Foods’ Savory Moroccan Spice Oatmeal that combines gluten-free oats with North African spices like cinnamon, turmeric, nutmeg, mace, white pepper, galangal, black and green cardamom, ginger, and anise, as well as figs and almonds.
“There’s definitely an interest in dialing back the sugar, and even a move from protein to good fiber and satiety,” Nielsen notes. “It would be nice to see less sugar overall so people’s palates can finally learn to appreciate less sweet.”
Products to Know
Here are some of the newer products on the market.
Back to the Roots Organic Stoneground Purple Corn Flakes. Made with only three ingredients—non-GMO organic purple corn from Minnesota, organic cane sugar from Florida, and sea salt from the San Francisco Bay area—this cereal offers 4 grams of protein, 40 grams of whole grains, and only 5 grams of sugar.
backtotheroots.com
Bob’s Red Mill Paleo Style Muesli. Gluten- and grain-free, this muesli is low in sugar and carbs. It’s made from simple, clean ingredients including coconut flakes, sunflower seeds, cashews, sliced almonds, and cranberries. bobsredmill.com
Dave’s Naturals Overnight Oats. A hearty and healthy blend of whole grain oats, chia seeds, almonds, and fruit, loaded with protein and fiber. Add milk and refrigerate overnight. Choose from apple nut, blueberry vanilla almond, cinnamon raisin, and mixed berry. davesgourmet.com
Earnest Eats Protein + Probiotic Hot Cereal. A combination of probiotics, grass-fed whey, and plant-based protein from the sacha inchi nut give these super-grain cereals a boost. Made with a blend of slow-release carbohydrates, including oats, quinoa, and amaranth, each offers 18 grams of protein. earnesteats.com
GrandyOats Organic Grain-Free Coconola. Protein-packed, grain-, and gluten-free, this granola is loaded with organic cashews, pecans, and coconut flakes, and organic sunflower seeds. Certified paleo, USDA organic, and gluten-free. grandyoats.com
Love Grown Foods Frosted Mighty Flakes. Sweetened with cane sugar, these flakes are made from a bean blend of navy beans, lentils, and garbanzo beans. Gluten- and corn-free. lovegrown.com
Munk Pack Ready-to-Eat Oatmeal Fruit Squeeze, Raspberry Coconut. This twist on oatmeal has a muesli-like texture coupled with the smoothness of a puree. It’s packed with whole grains, real fruit bites, and shredded coconut. Certified gluten-free, non-GMO, kosher, and vegan. munkpack.com
Straw Propeller Gourmet Foods Hemp N’ Oats, Man!. Gluten-free oats combined with organic honey crystals, hemp seeds, and sea salt for a hot portable breakfast
that offers 9 grams of protein. strawpropellergourmetfoods.com
Sweet Home Farm Coffee Latte Granola. Both Mocha Latte and Caramel Latte granola are made with Arabica coffee beans and contain 5 grams of plant-based protein and 25 grams or more of whole grains per serving. Non-GMO Project Verified, kosher certified, housed in recyclable milk carton-style packaging. attunefoods.com
Vigilant Eats Superfood Cereal Rosemary, Thyme, Sweet Potato. This sweet and savory hot oat cereal has 9 grams of protein and is a combination of healthful ingredients, such as hemp, mulberries, lucuma, coconut, and pumpkin seeds. USDA organic, vegan and non-GMO certified. It comes with a spoon for convenience.
vigilant-eats.com
Nicole Potenza Denis is a contributing editor to Specialty Food Magazine.
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