Breakfast cereals
With nine in ten (92%) consumers having eaten breakfast cereals in the past six months, they can comfortably be called a household staple in the UK, their popularity transcending all ages and socio-economic groups. Given the maturity of the market, product innovation is rife, making this a dynamic and highly competitive marketplace.
Valued at £1.6 billion, sales of breakfast cereals achieved growth of 4% in 2012, while volumes declined by 1%. This value/volume dichotomy reflects the pressure the market is facing from rising input costs.
Accounting for an estimated 85% of value sales in 2012, RTE cereals determine the fortunes of the overall market. The segment continues to see volumes falling, largely as a result of the growing competition from breakfast alternatives (eg breakfast biscuits, cereal bars, pastries) as well as due to consumers switching to porridge.
While volume sales of RTE cereals have declined for the fourth year running, sales of porridge are thriving. Indeed, the hot cereals segment has been the star performer within the breakfast cereals market, with value sales almost doubling between 2008 and 2013, reaching an estimated £241 million in 2013 or 15% of the overall market.
Though the strong value growth comes on the back of volume expansion, it has mainly been driven by rising prices fuelled by rising costs of ingredients. Recent innovation in higher-priced/lower-volume on-the-go formats, notably led by the Quaker Oat So Simple brand has also contributed.
While porridge has found a way to tap into the out of home breakfast occasion, the segment has also benefited from oats’ inherent health benefits, notably their cholesterol-lowering credentials, as well as their widely held associations with satiety – a factor which is of particular importance when it comes to buying breakfast cereals.
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