Abstract
The breakfast cereal market is worth an estimated £1.28 billion and, considering its high household penetration, has shown strong growth over the last five years, increasing in size by 17%. The cereal market has been on the front foot of the health revolution making the most of its natural goodness and the importance of breakfast, as well as actively limiting added salt and sugar.
However, high penetration and frequency of usage make further growth difficult. In the future, breakfast cereals will need to deliver more in terms of health benefits, provenance and green issue awareness, if they are to increase consumer engagement. Increasing frequency of consumption will be crucial to driving growth, and new and diverse eating occasions will need to be secured against a backdrop of rising raw ingredient prices.
- Four key issues
- Health as the key driver
- Impact of ready to eat cold oat-based cereals
- Big brands and big media budgets
- Raising frequency of usage.
Table of Contents
- Issues in the Market
- Definitions
- Four key issues
- Market in Brief
- Consumers are trading up
- Breakfast is back
- RTE cereals jump on the oat bandwagon
- Cereal success
- Prices are set to rise
- Premiumisation to continue
- Internal Market Environment
- Key points
- The health revolution
- Figure 1: Agreement with selected lifestyle statements, 2003-07
- Health is the key driving force of sales and NPD
- Skipping breakfast
- The way to start the day
- Figure 2: Agreement with selected lifestyle statements, 2003-07
- Broader Market Environment
- Key points
- FSA nutrient profiling and Ofcom Advertising Ban
- Cereal prices
- An ageing population
- Figure 3: UK population changes, by age and socio-economic status, 2002-12
- Going upmarket
- Competitive Context
- Key points
- Toast and fruit are the key competitors
- Figure 4: Product eaten at breakfast and frequency, December 2006
- Figure 5: Product eaten at breakfast and frequency, December 2006
- Bread
- Yo' go' urt
- Fruit on top
- Cereal bars are growing
- Figure 6: Opportunities and threats in the competing markets, 2002-06
- Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
- Market Value and Forecast
- Key points
- Consumers are trading up
- Figure 8: UK retail sales of breakfast cereals, 2002-07
- The future
- Rising cereal prices
- Increasing frequency of usage will be key
- Forecast
- Healthy growth set to continue
- Figure 9: UK retail sales of breakfast cereals, 2002-12
- Health to remain a crucial market driver
- Demographic changes to promote growth
- Figure 10: UK retail volume and value sales of RTE cereal, 2002-12
- Figure 11: UK retail volume and value sales of hot cereal, 2002-12
- Higher growth potential for hot cereals
- Rising cereal prices
- Factors used in the forecast
- Segment Performance
- Key points
- The kings of breakfast cereals
- Figure 12: UK retail volume and value sales of RTE cereal, 2002-07
- Easy to eat the perfect proposition
- A stable staple
- Shape of the market
- Figure 13: Value share of sub-sections of the RTE breakfast cereal market, 2007
- I' ll have my favourite
- Doing it for the kids
- From reducing to naturally good
- The oat effect drives naturally healthy
- Minor organic
- Cold oat-base cereals have stolen hot cereals' thunder
- Figure 14: UK retail volume and value sales of hot cereal, 2002-07
- Own-label repercussions
- Hot instant cereals are growing
- Figure 15: UK retail volume sales of hot cereal, by type, 2003-07
- Market Share
- Key points
- Branded successful
- Very special K
- Figure 16: The top-selling breakfast cereals in the UK, by estimated brand shares, 2006-07
- The health effect
- No compromise on favourites
- Oatso successful
- Product Positioning
- The reign of traditional brands
- Figure 17: Price per Kilo of RTE Brands from Selected Supermarkets, January 2008
- The deflationary effect of own label
- Figure 18: Price per Kilo of Hot-Cereal Brands from Selected Supermarkets, January 2008
- Companies and Products
- Brand map of manufacturers and brands
- Figure 19: Map of manufacturers and brands in the breakfast cereals market, 2008
- Company profiles
- Kellogg' s UK
- Figure 20: Key developments in the Kelloggs portfolio, 2007
- Cereal Partners UK (Nestlé)
- The Weetabix Food Company
- Quaker Oats Ltd
- W. Jordans Ltd
- Dorset Cereals Ltd
- Mornflake Oats
- Kallo Foods Ltd
- Doves Farm Foods
- Weight Watchers
- Honey Monster Foods
- Brand Communication and Promotion
- Key points
- Spending spree
- Figure 36: Main monitored media spend on cereals, 2003-07*
- Figure 37: Main monitored media spend, on cereals ready to eat and cereal requiring preparation, 2003-07*
- Seasonality
- Figure 38: Monthly main monitored media spend on breakfast cereals, 2005-07
- The mighty Kellogg' s
- Figure 39: Main monitored media spend, by advertiser, 2003-07
- Nominal spend
- Cereals requiring preparation
- Channels to Market
- Key points
- Figure 40: UK retail distribution of breakfast cereal, 2003-07
- Multiple strengths
- Acting independently
- Multiple convenience
- Consumer 1 -- Who -- Usage and Frequency?
- Key points
- Cold breakfast cereals are a key part of the breakfast ritual
- Consumption of cold breakfast cereals
- Figure 41: Consumption of cold breakfast cereals in the last 12 months, 2003-07
- Feeding the masses
- Figure 42: Consumption of cold breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07
- Retired and ABs have daily breakfast
- Hot breakfast cereals growing as manufacturers talk up the game
- Figure 43: Consumption of hot breakfast cereals in the last 12 months, 2003-07
- Figure 44: Consumption of hot breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07
- Consumers eat both hot and cold cereals
- Cereal bars are a different competitive set
- Figure 45: Consumption of cereal bars, cold breakfast cereals and hotbreakfast cereals in the last 12 months, 2003-07
- Cereal has a firm hold on the youth market
- Figure 46: 7-14-year-olds who eat cereal, 2003-07
- 13-14-year-olds: the key target group
- Figure 47: 7-14-year-olds who eat cereal, by demographic sub group, 2007
- Consumer 2 -- Usage Occasions
- Key points
- When do consumers eat cereals?
- Figure 48: Occasions when you eat cereals, November 2007
- Week usage dominates
- Snacking popular tabloid readers
- New product packaging will help differentiate product
- Appendix
- Advertising data
- Abbreviations
- Appendix -- Internal Market Environment
- Number of times a week people eat breakfast
- Figure 53: Number of times consumers eat breakast per week, January 200
- Figure 54: Agreement with selected lifestyle statements, by demographic sub group, 2007
- Figure 55: Agreement with selected lifestyle statements, by demographic sub group, 2007
- Figure 56: Agreement with selected lifestyle statements, by demographic sub group, 2007
- Figure 57: Agreement with selected lifestyle statements, by demographic sub group, 2007
- Figure 58: Agreement with selected lifestyle statements, by demographic sub group, 2007
- Figure 59: Agreement with selected lifestyle statements, 2003-07
- Appendix -- Market Sizes
- Figure 60: UK retail volume and value sales of breakfast cereal, by type, 2003-07
- Segment performance
- Appendix -- Brand Communication and Promotion
- Figure 61: Main monitored media spend by advertiser, 2003 - 07
- Figure 62: Main monitored media spend, by advertiser, 2003 - 07
- Appendix -- Consumer 1 -- Detailed Demographics
- Figure 63: Consumption of hot breakfast cereals in the last 12 months, by demographic sub group, 2007
- Figure 64: Consumption of cold breakfast cereals in the last 12 months, by demographic sub group, 2007
- Appendix -- Youth TGI
- Figure 65: Agreement with selected lifestyle statements on food, 7-10s, 2003-07
- Figure 66: Agreement with selected lifestyle statements on food, 11-14s, 2003-07
- Figure 67: Agreement with selected lifestyle statements on food, 7-10s, by gender, age, socio-economic group and region, 2007
- Figure 68: Agreement with selected lifestyle statements on food, 11-14s, by gender, age, socio-economic group and region, 2007
- Appendix -- Meal Occasions
- Figure 69: Meal occasions for eating breakfast cereal, November 2007
- Figure 70: Meal occasions for eating breakfast cereal, November 2007
- Appendix -- Factors Looked for When Choosing a Cereal
- Figure 71: Factors looked for when choosing a cereal, November 2007
- Figure 72: Factors looked for when selecting a cereal, November 2007
- Figure 73: Factors looked for when selecting a cereal, November 2007
