NEW YORK – MediaPost.com reports that ready-to-eat cereal, after years of U.S. sales declines, are ready for a revival.
The news source writes that Kellogg Company CEO and President John Bryant said during the company's annual meeting on November 20 that while snacks now make up 45% of Kellogg's global business, cereal and other breakfast products still account for 35%.
In the United States, cereal trends are improving substantially, Bryant reported. "On our last conference call I was asked what success looks like for the U.S. cereal business…I said that all we need is to have a stable cereal business—which is true, but that's not our intention. Our intention is to grow our U.S. cereal business, and I think you'll see that we are making progress in that direction. 2014 was a very difficult year for U.S. cereal. 2015 [is seeing] significantly better trends."
The news source writes that Paul Norman, president, North America, at Kellogg, said sales of core cereal brands have been trending upward all year, which he attributed to cereal’s popularity among Millennials and consumer demand for convenient and healthy snacking options throughout the day. In fact, cereal consumption outside of breakfast continues to show robust growth; Bryant said that at least 30% of cereal consumption now takes place outside of breakfast, up from 20% several years ago.
"Kids are eating it as an after-school snack, and adults are eating it instead of a light dinner, or as a late evening snack," Bryant said. "It's incredibly versatile. Everybody eats their cereal in a different way. People add different fruits, soy milk, coconut milk, cow's milk...We're very excited about how this is unlocking future growth for the company, particularly in [developed] markets,” such as the United States.
The move to single-serve options is already underway, notes MediaPost.com, with Kellogg launching its To Go Breakfast Mix in resealable pouches that can fit in a car cup holder. Some brands are also being packaged in grab-and-go cups, such as Special K Protein, Special K Granola, Frosted Flakes with Energy Clusters and Froot Loops Bloopers, which Norman said is "the fastest-growing, most over-indexing" Kellogg cereal with Millennials.
Kellogg executives also talked about the importance of food transparency and clean labels. The company is “renovating” existing products by removing artificial ingredients, notes the news source. For example, Norman said Special K is a prime example that consumers care less about calories and dieting and are more concerned about what's in their food.
Bryant and Norman both emphasized major growth opportunities for the company (cereal and all categories) outside of traditional grocery outlets. "Dollar, drug, club, convenience—in those faster-growing channels, our portfolio across the country is growing faster than [their categories]," Norman said.
Read more on cereal sales in convenience stores in December’s NACS Magazine Category Close-Up.