Cereal could be over with declining sales forcing rethink
WE HAVE become a society of cereal killers, turning our backs on our favourite traditional breakfast meal.
Cereals are dying off as people opt for convenience over Coco Pops or Weet-Bix.
Market research firm Euromonitor found millennials have been the major cereal killers, ditching the traditional sit-down breakfast in favour of portable snacks or smashed avocado at their favourite cafe.
Euromonitor predicts cereal will decline two per cent in volume and five per cent in sales during the next four years.
Cereal sales dropped five per cent between 2009 and 2014 and breakfast giants are being forced to reimagine cereal and create more convenient options.
THE RISE OF 'SNACKIFICATION'
A Euromonitor report said "snackification" was to blame for the decline in breakfast cereals.
There is a growing trend in people having a series of snacks during the day rather than three large meals.
"Several smaller but rapidly-growing categories are emerging to challenge breakfast cereals for share of the breakfast meal occasion," the Euromonitor report said.
"Products such as snack bars, Greek yoghurt and even biscuits offer a high protein, energising breakfast that can be consumed on-the-go."
Euromonitor reviewed cereal sales in the last year and discovered people were also choosing on-the-go options because they believed they were healthier.
"Due to a preference for these healthy and portable qualities, muesli and granola, which many consumers view as a natural breakfast option that can conveniently be eaten on-the-go, was the only category within breakfast cereals that witnessed growth in 2016," the report said.
"At the same time, food service outlets continue to expand their breakfast offerings, with new players, such as Taco Bell, offering breakfast for the first time in 2014 and McDonald's expanding its breakfast hours."
Retail analyst and managing director of Marketing Focus, Barry Urquhart, told news.com.au Australians were changing their eating habits.
"Particularly over the weekend, people are not going out to have breakfast, they're not going out for lunch, they're going out for brunch. The whole lifestyle is changing," he said.
"It's having a dramatic impact on how we eat and what we eat.
"The whole idea of a light breakfast and reasonable lunch is very foreign to many people."
Mr Urquhart said gone were the days where you would sit down with the family, brought together by cereal.
"It's a quaint memory of the past," he said.
Nestle nutrition manager Anne-Marie Mackintosh told news.com.au the decline in breakfast cereals was challenging the company to respond to consumer trends and provide more nutritious, convenient and value for money breakfast options.
"We believe that breakfast is the most important meal of the day," she said.
"There are many alternatives to cereal for breakfast, both at home, and increasingly, for people looking to eat breakfast outside their home, such as on the way to work.
"While breakfast cereal competes against a number of other choices, we know it delivers a complete meal, with affordable value and convenience."
WILL CEREAL MAKE A COMEBACK?
Mr Urquhart said cereal would never come back in fashion.
"Cereal is outdated and redundant and it needs to be repositioned in the mind of a consumer," he said.
"Breakfast is no longer tied to the clock."
Research firm IBISWorld said in a report cereal giants like Kellogg's and Nestle would need to create healthier and more convenient breakfast foods to help offset competition.
IBISWorld said the most important thing for the cereal industry now was adapting to change and product differentiation.
Kellogg's has launched a new product to appeal to those wanting breakfast on-the-go and released baked muesli breakfast biscuits, similar to the popular Brevita breakfast biscuits.
It has also launched gluten free versions of Corn Flakes and Special K.
According to the Australia Breakfast Cereal Manufacturers Forum, Australians are the third highest consumers of ready-to-eat breakfast cereals in the world, behind the UK and Ireland.
Australians purchase 185 million kilograms of cereal every year, which is about eight kilograms per person.
In May 2014 the Australian Bureau of Statistics found just over a third of Australians older than two years of age ate breakfast cereal.
Mr Urquhart said cereal companies would have to look at what else they could offer and cereal would only survive if it was paired with other products.
"A morning breakfast will probably have to consist of a coffee, muffin and cereal. It's a matter of grouping it together," he said.
Ms Mackintosh said Nestle was focusing on the positive health and nutrition benefits of cereal, such as wholegrains, fibre and calcium from milk.
"Some years ago Uncle Tobys put a set of 'guardrails' in place for the nutrition of our cereals, including the amount of wholegrain and fibre while limiting sodium and steadily redesigned our cereals to ensure every Uncle Tobys cereal meets these criteria," she said.
"Research shows that people who eat breakfast cereal regularly tend to have more nutritious diets overall, be slimmer, and have reduced risk of ill health such as diabetes and heart disease."
To keep up with health conscious consumers, Nestle released new products including Uncle Tobys Nature's Mix and O&G Bircher Muesli as well as granola and oatmeal.
"We want to encourage people back to breakfast cereal - compared to other options, breakfast cereal delivers a complete meal, with affordable value, in a convenient format. We're continuing to explore options to address what Australians want and need at breakfast," Ms Mackintosh said.
With health conscious people turning their backs on cereal because of reports of high sugar content, cereal giants are urging people to remember the benefits of eating it for breakfast.
A Nestle report said the wholegrain intake in Australia was below the recommendations in all age groups.
WHAT HAPPENED TO 'PESTER POWER'?
Mr Urquhart said once upon a time people bought the brands of Kellogg's and Sanitarium but there was now less loyalty and recognition of these brands.
"Brand recognition has weaned over the past five years. Once upon a time you would watch television and see 'Happy Little Vegemites' and that kind of marketing is not there today," he said.
"The marketing going on with breakfast cereal is happening in store and more about merchandising than marketing."
Mr Urquhart said a lack of marketing would damage the brands because it takes away "pester power".
Instead of children seeing an ad and pleading for that type of cereal, parents are making the choice.
"It is not a good thing when it comes to pester power," Mr Urquhart said.
"Children's influence on parents is worth $120 billion a year in Australia and breakfast cereal manufacturers aren't striking the chord."
News.com.au has contacted Kellogg's and Sanitarium for comment.