Soggy sales

A bowl of cereal used to be a staple of the western breakfast table, but years of dwindling sales show that times have changed. The cereal sector looked like it was one of the last touched by modern sensibilities – major legacy brands failed to change their offering and innovate, instead still targeting kids with the same sugar-heavy, colourful products that first became popular in the fifties. Convenience, along with meal-replacement shakes and chia seed breakfast pots, fuelled the rise of picking up something – but not usually cereal – on the move.

As such, between 2009 and 2016, cereal consumption was down 17% in the US, yet the average person was still eating nearly 9kg of cereal every year, the most of any country in the world. By 2019, 13% of Americans were skipping breakfast altogether. That same year, 25% of young adults and 17% of 35- to 44-year-olds in the UK had their first meal of the day at work, university or school, eating items they’d picked up on the way.

Cereal, reinvented

A few years ago, although cereal sales were slowly declining, it was still a $10bn market in the US alone. But then a couple of things started to change. Studies found that UK and US consumers were increasingly replacing their meals with snacks, which legacy brands started paying attention to, mixing up their offerings with cereal packaged in smaller bite-size snacks. At the same time, smaller, independent brands began to recognise consumer tastes were changing, so started offering healthier, more flavoursome alternatives to regular cereal.

Turnaround

The global pandemic quickly sank one of the fast-food industry’s biggest bets: breakfast. Once the best hope for upping sales, mornings are now the slowest time of day at restaurants across the world. Conversely, the pandemic has given cereals a huge boost – confined to their homes with no commute and less structure to the day, people have been returning to cereal. Food execs say they expect habits formed during the pandemic to stick, with a renewed focus on eating healthily at home. The global breakfast cereal market is projected to grow from $40.9bn in 2020 to $49bn by 2027.

Same same, but different

Over the past year, some of the major brands have been making essentially the same cereals but marketing them differently – since the pandemic hit, and with more people snacking at home, they have been keen to break out of the breakfast category. Kellogg’s, for example, started offering smaller packs for on-the-go snacking as well as bigger sharing bags of cereal, supposedly for movie nights. Smaller brands have adopted similar strategies: UK brand Real Handful has released snack packs of cereal, oats, raisins and yoghurt. On the flipside, the blue box of Kraft’s Mac and Cheese has been rebranded with the word ‘breakfast’. The rule of thumb? Empower your consumer to enjoy their food, whenever they want to eat it.

Brands to watch

Two cereal brands thinking outside the box.

01. Magic Spoon

$39 for a four-box case

High in protein, low in sugar, keto-friendly and gluten-free, Magic Spoon flips the nutritional profile of traditional cereals on its head. The Brooklyn-based brand started selling its ‘child-like cereal for grown- ups’ online in April 2019. A week later, it had sold out of inventory that its founders, Gabi Lewis and Greg Sewitz, had expected to last months. By the end of the year, Magic Spoon announced a $5.5m funding round and won a spot on Time magazine’s ‘best inventions of the year’. By betting big on nostalgic branding and wellbeing entering the mainstream, Magic Spoon has found a sweet spot, reporting triple-digit sales growth during the pandemic.

Hear our Courier Weekly podcast conversation with Gabi Lewis here.

02. OffLimits

$24 for two boxes

Emily Miller was already the author of the cookbook Breakfast and the host of BreakfastClub, which hosts tours of notable breakfast spots, before she launched her socially responsible cereal brand OffLimits in 2020. The brand’s mascot is US cereal’s first-ever female character, and encourages body positivity and inclusivity – not diet culture, which, Emily says, has historically been a ‘rampant tactic’ in cereal marketing. Of the two organic flavours, Dash is made with cacao and coffee for an energy kick, and Zombie’s adaptogens of pandan, vanilla and ashwagandha make for a more chilled effect.

This article was first published in Courier issue 39, February/March 2021. To purchase the issue or become a subscriber, head to our webshop.