Hot cereals has seen sales negatively impacted by interruptions to distribution channels as a result of measures to contain the spread of COVID-19 and the fact that the outbreak affected the celebration of the Chinese New Year when hot cereals are traditionally often chosen as a gift. The flakes and children’s breakfast cereals categories have also been adversely affected by channel interruption during the COVID-19 pandemic.
Players with a strong focus on e-commerce have been the strongest performers in breakfast cereals during 2020, as the channel has seen COVID-19 lead to a notable expansion of its consumer base and increased frequency of use amongst established online shoppers. Calbee E-commerce Ltd and Hangzhou Baoge E-commerce Co Ltd, the top two players in muesli and granola, have been amongst the players to witness notable share growth on the back of the expansion of e-commerce during the year.
PepsiCo remains the largest player in breakfast cereals thanks to its strong lead in hot cereals. Hot cereals fits PepsiCo’s broader strategic focus on expanding in health-orientated food categories, and the company worked to further strengthen its health-orientated positioning through the launch of two new products: a muesli and granola product with frozen yoghurt cubes, and a naturally health breakfast cereal.
Breakfast cereals is expected to see significant growth over 2020-2025 as it benefits from its compatibility with key consumer demand trends. As consumers return to their hectic lifestyles, the demand for time-saving food options that require minimal preparation will continue to grow.
Muesli and granola is forecast to be the most dynamic breakfast cereals category over 2020-2025, with growth driven by its compatibility with key elements of modern consumer demand. Being ready-to-eat, it is suitable for snacking and, therefore, suited to the eating habits of busy urban consumers.
While flakes and children’s breakfast cereals are expected to continue to grow during the forecast period, these categories are set to see a lack of innovation, and a limited range of ingredients and flavours constrain their development. Moreover, these categories have a less healthy image amongst Chinese consumers than either hot cereals or muesli and granola.
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This report originates from Passport, our Breakfast Cereals research and analysis database.
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