Exploring Market Potential: The Changing Landscape of Breakfast

Breakfast cereals remain underserved in emerging markets due to their high prices and the lack of savoury options

With over 70% of breakfast cereals sales coming from developed countries, breakfast cereals continue to remain the food of the wealthy. In order to make cereals a global breakfast food, manufacturers should develop savoury options and make pricing strategy a priority to increase availability, in particular in markets with high market potential such as India, China and Brazil.

Breakfast cereals need to reposition themselves as nutritious yet affordable to adopt to changing lifestyles of mature market consumers

Soft drivers such as lifestyle changes, increasing awareness around health and wellness and legislation have all combined to play a role to drag down cereal sales in advanced economies. The category needs to rid itself of its overly-processed image, rebuild its nutritional profile as a healthier snack and continue with price promotions to regain market traction.

Cereal manufacturers should tap into the market potential of alternative breakfast products, in particular dairy

The increase in the availability and affordability of alternative breakfast foods has reduced cereal consumption in cereals’ biggest markets. In order to turn around sales, cereal players should tap into the high market potential of dairy and pastries, and consider pairing cereals with yoghurt or flavoured milk drinks.

Cereal brands likely to lose space in the centre of store but impulse aisles offer promise

Cereals’ continuing association with staple foods continues to dent sales in its biggest markets. With consumers increasingly avoiding the centre store due to health and time concerns, manufacturers should consider developing snack-size variants and carry the product to fast-growing impulse aisles.

Away-from-home consumption poses challenge to breakfast cereal sales in advanced economies

The competition for breakfast cereals is tougher than it has ever been. Foodservice, in particular quick-service restaurants (McDonald’s) and coffee shops (Starbucks) are grabbing an ever-increasing share of the breakfast pie as they manage to deliver on affordability, taste, quality and convenience.