The COVID-19 pandemic is expected to positively impact breakfast cereals in 2020 as consumers stockpiled these products at the end of February and the start of March when the Hungarian government imposed regulations to prevent the spread of the coronavirus. In addition, as consumers spend more time at home as a result of the pandemic, which led to school closures from April until the end of September, as well as work-from-home, Hungarians are increasingly eating sit-down breakfasts with their families and breakfast cereals remain a popular option across most age groups in Hungary.
Demand for breakfast cereals is being driven by local consumers increasingly searching for convenient and filling breakfast options, which also have a health and wellness positioning in line with Hungarians’ increasing focus on different ingredients contained in many types of packaged food. Previously, muesli and granola was positioned as being a healthy breakfast cereal but recently cereals made from other types of grains, such as spelt, millet, amaranth, and hot cereals started attracting attention.
Nestlé Hungária Kft remains the leader of a fragmented competitive landscape in 2020, offering a wide product portfolio within children’s breakfast cereals and flakes, including well-known brands such as Chocapic, Cini Minis, Lion and Fitness, despite the two leading positions overall being held by private label lines from Tesco and Spar in RTE cereals. The player continued to innovate over the review period as it noted the rising health trend in Hungary and relaunched its children’s breakfast cereal Nesquik Alphabet with 30% less sugar content in an attempt to win favour with parents.
The sale of breakfast cereals in Hungary in constant retail value at 2020 prices is expected to slow over the forecast period and record a lower CAGR than that of the review period as the category was temporarily boosted by home seclusion and stockpiling in 2020. Nonetheless, consumers are likely to continue to work from home, which will likely benefit breakfast cereals as people increasingly eat breakfast at home.
Demand for healthier breakfast cereals will be met with product innovation by manufacturers, supporting continued growth in breakfast cereals. As a result of the growing awareness of hot cereals supported by campaigns and an expanding range of products, hot cereals is expected to see the best performance.
The economic impact of COVID-19 may see consumers reduce spending on food as disposable income falls in 2020; however, the economy is forecast to rebound from 2021. Nonetheless, price sensitive consumers may be forced to compare unit prices and private label is expected to gain ground as a result.
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This report originates from Passport, our Breakfast Cereals research and analysis database.
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