epending on how you look at the future of the
longstanding ready-to-eat cereal category,
the bowl could be half full or half empty. But
with a bevy of new products in the pipeline
that would excite even Tony the Tiger himself, along with
ideas on how retailers can better display and promote the
category, major cereal manufacturers are decidedly optimistic going into 2018.
A realist would point out that current sales data for the
category paints a rather soggy picture: Cereal sales have
been on the decline in recent years, and the latest Nielsen
figures find that overall sales of ready-to-eat cereal with
UPC coded items reached a new low last year—$8.46 bil-
lion for the latest 52 weeks ending Oct. 28, 2017. That’s
a 3.2% decline from 2016, which contributed to a com-
pound annual growth rate in sales of –2.6% over the past
four years (from 2013 to 2017).
But a few trends indicate that the category could soon
rebound, as long as suppliers stay focused on their core
customers while paying close attention to changing
consumer eating habits. Two trends that show the most
promise are kids’ love of cereal and all-day snacking.
In fact, sales of kids’ cereals have showed the most
resilience in recent years, which isn’t much of a surprise
considering cereal has a 97% penetration rate among
households with kids. Manufacturers’ efforts to add more
excitement to the category via licensed products and fun
promotions have certainly helped. Perhaps their greatest
challenge is maintaining healthier profiles with less sugar,
while not compromising on taste.
Cereal has also fared relatively well in eating occasions
outside of breakfast, thanks to an increase in Americans’
preference for eating small bites around the clock.
Scott Baldwin, director of marketing for cereal at
Minneapolis-based General Mills, says his company has
closely followed this trend. “While cereal is primarily a
breakfast food, we are seeing the trend of cereal being
consumed at various times outside of breakfast,” he says.
“Examples include a great snack at the office or after
school, and after dinner as a dessert or late-night snack.”
Last year General Mills introduced a new cereal that
was specifically designed to double as breakfast or a
snack. Called “Tiny Toast” (the name was later changed
to Toast Crunch to fit in with the company’s better-known
Cinnamon Toast Crunch line), the cereal is made with
real fruit and comes in thick, bite-size pieces.
According to Nielsen, annual household spending on
individually packaged snacks increased more than 1.1%
over the previous year, with almost every household in
the United States purchasing these items at least once
for quick and convenient consumption. While consumers weren’t always taking the time to fix a bowl of cereal,
individual bars—which include cereal/granola bars—saw
the strongest absolute dollar growth with an increase of
General Mills and other major suppliers are forging
ahead with new products that speak to the latest trends.
“We believe we can continue to drive improvements in
our cereal business by putting the consumer first and
consistently delivering on their needs with innovation
and renovation, just as we’ve been doing,” says Baldwin.
“Our job is to make cereal people love, and we work very
hard to ensure we have a flavor and cereal to fit nearly
He hints that General Mills will be launching “several
exciting new products” this month. Those items follow
last year’s release of Apple Cinnamon Toast Crunch and
The Bowl’s Half Full
The cereal category has room to grow, if suppliers
and retailers work together to maximize product
innovation and displays. By Lee Brown
Increase in annual
packaged snacks over
the previous year.