Rabobank Report: Cereal Killers – Five Trends Revolutionizing American Breakfast Breakfast Cereal Makers Need to ‘Think beyond the Bowl’ to Remain Relevant Business Wire NEW YORK -- April 23, 2013 Rabobank has published a new report on the U.S. morning eating occasion, particularly the breakfast cereal market, examining factors that are contributing to a decline in breakfast cereal consumption, and leading consumers to turn away from the cereal bowl in favor of other breakfast options. Rabobank also explores various strategies by breakfast cereal companies to inject new growth into the category. In the report, titled “Cereal Killers: Five Trends Revolutionizing the American Breakfast,” Nicholas Fereday, Global Senior Analyst with Rabobank’s Food & Agribusiness Research and Advisory group, asks, “Is breakfast cereal, an American staple once characterized by strong innovation and competitive brand marketing, failing to meet the challenges of the 21^st century consumer landscape? Flat sales and declining volumes over the past decade indicate consumers are tiring of boxed cereals, lured away by more contemporary, aspirational, and convenient morning eating options in other grocery aisles or restaurants.” Five Trends Revolutionizing the American Breakfast Rabobank identifies five trends – “cereal killers” – that are changing U.S. consumers’ breakfast habits: 1) “I’ll take that to go.” Breakfast is the new eating-out occasion. 2) “Snackfast.” Consistent with trends across all eating occasions, the rising culture of snacking is transforming breakfast into “snackfast” as consumer seek convenience and portability. 3) Beware of Greeks bearing yogurt! Protein is the latest superfood promising satiety and weight management. 4) The nutrition challenge. As politicians and pundits weigh in on what to eat, the cereal industry struggles to find the balance between regulation and self-regulation without alienating consumers. Consumers today are more interested in the nutritional profile of food than in past eras, and the cereal category has two hot-button issues – added sugars and marketing to children – which attract critics. 5) Boomers or bust? With declining birth rates, the growth of a key cereal-eating demographic, children, is slowing. Who will be left to munch on cereal in the future? If millennials are a lost cause, is it a case of Boomers or bust? Thinking Beyond the Bowl: Strategies to Regain Market Share and Sales Rabobank says that despite the trends reshaping the American breakfast meal, it sees continued strong potential in the U.S. breakfast cereal market. Fereday offers several strategies for breakfast cereal companies to grow their U.S. business and take advantage of trends currently undercutting their market. Innovation Among the possible strategies cereal companies have to lure in breakfast skippers are innovation and targeted marketing that emphasizes the importance of breakfast as the most important meal: *Renew the focus on innovation: Make bigger and better bets to generate new brand platforms, such as Kraft has done with Mio, Oscar Mayer Selects and Velveeta Skillets. *Spend more on food ingredients relative to advertising budgets, learning from the success of fast growing companies such as Clif Bar & Company, Chipotle Mexican Grill, Inc., and Whole Foods Markets, Inc., that food does not have to be a least-cost formulation. Reboot the Consumer Message The breakfast cereal category pioneered marketing in the age of mass media, but Rabobank says it is struggling to find its voice and target customers in today’s age of multimedia and fragmented retail channels. Equally, many current consumer food trends do not necessarily play well to cereal’s core strengths, as consumers move away from highly processed foods. Nevertheless, Rabobank believes breakfast cereals remain a highly relevant platform for delivering many health and wellness positives, but that manufacturers need to reboot their message to consumers regarding the relevance of their product. Fereday concludes, “Despite the numerous health positives associated with breakfast cereal, some companies already appear to be exiting through the snack aisle. We are not predicting the end of this $10 billion market, rather, we believe that breakfast cereals can aspire to more than single-digit growth and erosion of market share. To turn the tide, we suggest a renewed focus on innovation, a rebooting of the message to consumers, and, for children’s cereal, an embrace of what you are, even if that means new positioning in a different grocery aisle.” The Rabobank report on the trends revolutionizing the U.S. breakfast cereal category is available to media upon request. Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.rabobank.com/f&a For a social media-ready version of this press release: http://rabobank-food-agribusiness-research.pressdoc.com Follow us on Twitter: @rabofoodagri Contact: Rabobank Lynne Burns, 212-808-2581 firstname.lastname@example.org
Rabobank Report: Cereal Killers – Five Trends Revolutionizing American Breakfast
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