Breakfast Cereals Market Report - Market Research Reports

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Breakfast Cereals Market Report

Description:

Breakfast cereals form an important and well-established grocery sector, with over 90% household penetration. In 2000, 414,000 tonnes of breakfast cereals were sold in the UK, at a retail value of £1.1bn. The market can be segmented into ready-to-eat (RTE) cereals (cold cereals) and hot cereals. The latter sector includes both traditional porridge oats and the newer `instant' varieties. Breakfast cereals can also be classified by category of product, i.e. staples, children's, health, adult indulgence and muesli. The two largest sectors are staples and children's cereals, which together accounted for an estimated 63% of RTE cereal sales by value in 2000. Between 1996 and 2000, the value of the UK breakfast cereals market remained static overall, as a result of increased competition from alternative breakfast foods, such as croissants, pastries and cereal bars, and intense price-cutting initiatives by the leading multiple grocers. The leading cereal manufacturers have been diversifying into convenience and snacking products targeting breakfast `skippers' and `deskfasters', i.e. those who prefer to eat breakfast at the office. In the RTE sector, the main growth has come from niche products, such as organic cereals and adult indulgence products, while growth in the hot cereals sector is being driven by `instant', microwaveable varieties, which have attracted new users. Sales of organic cereals grew dramatically in 2000, as the products became more mainstream and well-known manufacturers entered the market. Weetabix, for example, launched its Nature's Own range of wheat biscuits and malted wheat squares, while The Enjoy Organic Company, backed by RHM, introduced a range of five organic versions of mainstream cereals. Own labels have also grown in importance, with new suppliers launching better-quality cereals. Key Note forecasts that the breakfast cereals market will see some growth over the medium term, but at a slow rate, because of the maturity of the products and increased retail competition. New product developments will continue the current trend towards snacking and convenience, with a greater emphasis on healthy cereals in the future. In percentage terms, however, the largest growth will come from hot cereals - especially the `instant' varieties, which have greater potential because of their relative infancy.

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