The Inverted Logic of the Cereal Industry

All reports point to health benefits being a major selling point across the food industry, notably so in the breakfast category – including cereals. Research by ingredient provider Watson predicted that added protein, new grains, superfoods, and BFY “functional” foods would all be major trends among cereal brands in 2019. Mintel data showed that lightly sweetened cereal is the most popular choice among consumers, with significant gains among healthy cereals – 49% of relevant consumers reported that they are eating more ancient grain-based cereals, 36% are consuming more granola, 40% are consuming more muesli, and 33% are consuming more high-fiber cereals.

So why, with this push for health, does it feel like we are seeing more sugar than ever in the cereal aisle?

Post recently released two cereals under their Hostess brand, Honey Bun and Donettes (based on their miniature powdered donuts). Cold Stone Creamery has a cereal line that debuted in 2018, as does Dippin’ Dots. Even Sour Patch Kids are asking to be paired with milk.

The reason for this seemingly backwards phenomenon is simple – cereal brands want to break out of the breakfast mold.

As a sweet dish, they are limited in their ability to enter other mealtimes. Snacking and dessert, however, is a different story entirely.

These brands aren’t aiming to compete with Fiber One or All-Bran. They want to occupy the same space as junk foods, on par with potato chips and ice cream. After all, as much as your body may need it, you probably aren’t reaching for a box of Grape Nuts at 2 am after a night out. You may be inclined, however, to pour a bowl of powdered donut cereal.

John Owen, senior food & drink analyst for Mintel, stated in a 2017 research study that “while breakfast is the most common occasion for eating cereal and nearly universal across age groups, snacking on cereal may offer greater potential for reinvigorating category growth, especially among younger adults.” For many brands, boosting cereal’s snackability is an important element for growth. And for some, this means steering away from trendy BFY and going with classic, tried-and-true indulgence.

Whether or not this is a sustainable strategy remains to be seen. However, with these brands targeting younger Millennials and Gen Z-ers, drawing from nostalgia and comfort could lead to the snacking win that they are seeking.

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