Pantry Staples Center Store
While cereals with no nutritional benefits are struggling,
healthier cereals are doing better. Last fall, Kellogg’s
launched its Hi! Happy Inside cereal, containing probiotics, prebiotics and fiber, in three flavors. Around the same
time, Kashi released a new line, Kashi by Kids, which children helped create. These cereals tout whole grains, fiber
and 8 grams of sugar per serving, and they are non-GMO.
Better-for-you cereals are seeing healthy sales at Roche
Bros. and at PCC Community Markets, a chain of 11 natural and organic stores in and around Seattle. Breakfast
aisle sales (cold cereal, granola and hot cereals) were up
almost 5% in 2018 compared to 2017, says Scott Owen,
PCC’s senior grocery merchandiser, who points out that
much of the growth came from new items. However,
he admits, it’s less than the 7% growth he saw in frozen
breakfast entrees, which is mostly waffles. The biggest
driver, he says, is oats, which saw sales last year up about
10%. Owen attributes this to oats being an ingredient—
oatmeal cookies, for instance—and the healthy halo surrounding oat milk.
Granola is doing slightly better—down 1% year over
year—“but granola is saturated with so many brands,”
Picchione says. “And you have to have in your set the
Granola is holding its own at PCC, Owen says, especially grain-free for the paleo and keto crowd. Small, local
manufacturers, such as Langley, Wash.-based Primal
10-ounce sizes, even though the 1-pound bags are a better
any of us can’t think of anything more con-
venient than putting cereal in a bowl, adding
milk and eating it, but—if we can mix our
food categories for a moment—it’s just not
cutting the mustard anymore.
Cereal is deemed by millennials to be inconvenient.
Adding to this is the perception that the entire category
is highly processed, low in nutrients and high in sugar, so
it’s no surprise cereal sales continue to plummet. From
2013 to 2018, according to Packaged Facts, cereal sales
decreased at a compound annual growth rate of 1.5%.
Last year the category as a whole was worth $10.9 million
in the U.S., and Packaged Facts estimates that figure will
drop to $10.1 million by 2023, according to its U.S. Food
Market Outlook 2019. report.
The big obstacle for cereal is its cost, says Jill Picchione,
grocery category manager for Roche Bros., a 20-location
supermarket chain based in Wellesley Hills, Mass.
At Roche’s stores, cold cereal is down about 5% year
over year. But what’s driving sales is promotional activity,
such as advertisements and price reductions, Picchione
On-the-box promos also continue to drive purchasing
habits. This includes LTOs such as General Mills’ recent
Lucky Charms Marshmallow Only promotion, giving
15,000 limited-edition boxes of the cereal to consumers
who found a winning code inside their Lucky Charms
box. “Consumers have flooded our inboxes and swept
our social feeds begging for Lucky Charms Marshmallow
Only to return,” says Scott Baldwin, director of marketing
for cereal for General Mills.
The other big category player, Kellogg’s, does its own
share of promos. This spring it debuted a limited-edition
Tony the Tiger T-shirt collection in honor of National
So reports of cereal’s death might be premature, and
58% of its sales happen in traditional grocery stores,
according to Packaged Facts. One in five breakfasts still
includes cold cereal, says Darren Seifer, executive director of The NPD Group, Port Washington, N. Y., and nearly
every household contains cereal, “but other products are
chipping away at it,” especially egg dishes and yogurt.
If you want
you need to
—Scott Owen, PCC
Bob’s Red Mill has had
success with sampling its
bars in grocery stores.
Primal Island offers four
varieties of grain-free
Toasted Coconut (not