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Breakfast Cereals - UK - August 2011

For the purposes of this report, breakfast cereals are segmented into cold ready-to-eat (RTE) cereals and hot cereal products. The former group comprises any cereals that are served with cold milk, such as corn flakes or muesli and include ready-to-serve snack packs such as Rumblers and Kellogg’s To Go. The hot cereal group consists of porridge, oatmeal and instant hot oat products.

Cereal bars (eg Masterfoods’ Tracker) and other breakfast products (such as Kellogg’s Pop Tarts) are excluded from the scope of this report (cereal bars are covered in Cereal and Snack Bars - UK - February 2011), but reference to them is made in the light of continued developments in these areas.

Value figures throughout this report are at retail selling prices (rsp) unless stated otherwise. The UK breakfast cereal market sizes at constant 2011 prices are devised using Mintel’s food deflator.

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Forecast
                • Figure 1: UK retail value sales of breakfast cereals, 2006-16
              • Market factors
                • The breakfast occasion is hotly competed
                  • Cold winters drive hot
                    • Questions about healthiness of cereals raised by the media
                      • Cost pressures drive up prices
                        • Companies, brands and innovation
                          • Figure 2: Market share of breakfast cereals, by brand, 2010
                        • New healthy innovation in the children’s segment
                          • The presence of major players drives high ad spend
                            • The consumer
                              • Nine in ten adults eat breakfast cereals
                                • Sugar and fibre content are top choice factors
                                  • Figure 3: Factors taken into consideration when choosing breakfast cereal, June 2011
                                • Newness can engage half of cereal eaters
                                  • Figure 4: Attitudes towards breakfast cereals, June 2011
                                • Packaging sparks consumer interest
                                  • Figure 5: Agreement with the statement, “I would prefer my cereal to have less packaging”, June 2011
                                • What we think
                                • Issues in the Market

                                    • Do breakfast cereals need to improve their health image?
                                      • What impact are Ofcom’s regulations having on the market?
                                        • How can more men be attracted to porridge?
                                          • Is there further potential for more indulgent cereals?
                                          • Future Opportunities

                                              • Trend: Make it Mine
                                                • Trend: Many Mes
                                                • Internal Market Environment

                                                  • Key points
                                                    • Fibre enjoys strong appeal...
                                                      • Figure 6: Agreement with the statement “I try to include plenty of fibre in my diet these days”, by age group, 2010
                                                    • … although interest in many health considerations is decreasing
                                                      • Figure 7: Agreement with the statement “I am prepared to pay more for foods that don’t contain artificial additives”, 2006-10
                                                    • Average working hours in decline
                                                      • Figure 8: Trends in average working hours, per day, 2006-10
                                                    • Big freeze(s) benefit porridge
                                                      • Figure 9: Mean winter* temperatures, UK, 2006-10
                                                  • Broader Market Environment

                                                    • Key points
                                                      • Oat and wheat prices leap
                                                        • Figure 10: Weekly prices of cereals, England and Wales, January 2008-May 2011
                                                      • Milk prices dip under supermarket competition
                                                        • Figure 11: RPI for fresh milk, January 2008-April 2011
                                                      • Nutrient Profiling Model presents an ongoing challenge
                                                        • Demographic changes affect the market
                                                          • Figure 12: Projected trends in the UK population, by age group, 2011-16
                                                          • Figure 13: Consumer Confidence Index, monthly, January 2007-May 2011
                                                      • Competitive Context

                                                        • Key points
                                                          • Toast poses strong competition to cereals at breakfast
                                                            • Figure 14: Breakfast items eaten in the home, June 2011
                                                          • … and has the weight of the bread market behind it
                                                            • Figure 15: UK value sales of selected foods competing with breakfast cereals, 2006-10
                                                          • Fruit has limited but healthy appeal
                                                            • Younger consumers choose cooked breakfast
                                                              • Figure 16: Cooked breakfast consumption, by age group, June 2011
                                                            • Modern offerings have youth appeal
                                                              • Figure 17: Selected items eaten for breakfast at home, 16-24-year-olds, June 2011
                                                          • Strengths and Weaknesses

                                                            • Strengths
                                                              • Weaknesses
                                                              • Who’s Innovating?

                                                                • Key points
                                                                  • Weetabix and Kellogg’s crack the NPM code with chocolate innovation
                                                                    • Kellogg’s ups efforts in NPD
                                                                      • Figure 18: New product development in the UK cereals market by top 20 companies, January 2008-May 2011*
                                                                    • … but Weetabix reduces the number of launches
                                                                      • Cereal gets chocoholic
                                                                        • Figure 19: New product development in the UK cereals market, top ten flavours, 2009 and 2010
                                                                      • Cold cereals dominate NPD
                                                                        • Figure 20: NPD in UK breakfast cereals, cold vs hot cereals, 2008-11
                                                                      • … as hot cereals enhance instant appeal
                                                                        • Own-label NPD on the up
                                                                          • Figure 21: New product development in the UK cereals market, by private-label, 2009-10
                                                                        • Porridge gets an urban makeover
                                                                        • Market Size and Forecast

                                                                          • Key points
                                                                            • Cereal sales plateau
                                                                              • Figure 22: UK retail value and volume sales for total breakfast cereals, 2006-16
                                                                            • Sales dip in 2010
                                                                              • Cold cereals in modest growth
                                                                                • Big freeze factor
                                                                                  • Figure 23: Hot cereal sales value vs mean winter temperature, 2006-10
                                                                                • The future of the market
                                                                                  • Breakfast cereal market forecast
                                                                                    • Figure 24: Value sales for total breakfast cereals, 2006-16
                                                                                  • Forecast methodology
                                                                                  • Segment Performance

                                                                                    • Key points
                                                                                      • Cold cereals
                                                                                        • Figure 25: UK retail value sales of cold and hot breakfast cereal, 2006-11
                                                                                      • Hot cereals
                                                                                        • Figure 26: Year-on-year % change in cold and hot breakfast cereal market values, 2007-11
                                                                                      • Cold cereal volume sales under pressure
                                                                                        • Figure 27: UK retail volume sales of cold and hot breakfast cereal, 2006-11
                                                                                    • Market Share

                                                                                      • Key points
                                                                                        • Special K is the biggest brand
                                                                                          • Figure 28: Market share of breakfast cereals, by brand, 2010
                                                                                          • Figure 29: Market share and sales value of breakfast cereals, by brand, 2008-10
                                                                                        • Porridge power
                                                                                          • Dorset’s solid sales
                                                                                            • Own-label plays a limited role in breakfast cereals
                                                                                            • Companies and Products

                                                                                                • Figure 30: Selected leading companies in the breakfast cereal market in the UK and their brands, 2011
                                                                                              • Kellogg’s
                                                                                                • Corn Flakes
                                                                                                  • Special K
                                                                                                      • Figure 31: New product development by Kellogg’s, January 2010-May 2011
                                                                                                    • Coco Pops
                                                                                                        • Figure 32: New product development by Kellogg’s, January 2010-May 2011
                                                                                                      • Weetabix
                                                                                                          • Figure 33: New product development by Weetabix, January 2010-May 2011
                                                                                                        • Alpen
                                                                                                            • Figure 34: New product development by Weetabix, January 2010-May 2011
                                                                                                          • Dorset Cereals
                                                                                                              • Figure 35: Key new product development by Dorset Cereals, January 2010-May 2011
                                                                                                            • Jordans
                                                                                                                • Figure 36: Key new product development by Jordans, January 2010-May 2011
                                                                                                              • Cereal Partners
                                                                                                                  • Figure 37: New product development by Cereal Partners, January 2010-May 2011
                                                                                                              • Brand Research

                                                                                                                • Brand map
                                                                                                                    • Figure 38: Attitudes towards and usage of breakfast cereal brands, June 2011
                                                                                                                  • Brand attitudes
                                                                                                                    • Figure 39: Attitudes by breakfast cereal brand, June 2011
                                                                                                                  • Brand personality
                                                                                                                    • Figure 40: Breakfast cereal brand personality – macro image, June 2011
                                                                                                                    • Figure 41: Breakfast cereal brand personality – micro image, June 2011
                                                                                                                  • Correspondence analysis
                                                                                                                    • Brand experience
                                                                                                                      • Figure 42: Breakfast cereal brand usage, June 2011
                                                                                                                      • Figure 43: Satisfaction with various breakfast cereal brands, June 2011
                                                                                                                      • Figure 44: Consideration of breakfast cereal brands, June 2011
                                                                                                                      • Figure 45: Consumer perceptions of current breakfast cereal brand performance, June 2011
                                                                                                                      • Figure 46: Breakfast cereal brand recommendation – Net Promoter Score, June 2011
                                                                                                                    • Brand index
                                                                                                                      • Figure 47: Breakfast cereal brand index, June 2011
                                                                                                                      • Figure 48: Breakfast cereal brand index vs. recommendation, June 2011
                                                                                                                    • Target group analysis
                                                                                                                      • Figure 49: Target groups, June 2011
                                                                                                                      • Figure 50: Breakfast cereal brand usage, by target groups, June 2011
                                                                                                                    • Group One – The Conformists
                                                                                                                      • Group Two – Simply the Best
                                                                                                                        • Group Three – Shelf Stalkers
                                                                                                                          • Group Four – Habitual Shoppers
                                                                                                                            • Group Five – The Individualists
                                                                                                                            • Brand Communication and Promotion

                                                                                                                              • Key points
                                                                                                                                • Ad spend remains steady
                                                                                                                                  • Figure 51: Topline advertisement spend in the UK breakfast cereals market, 2006-10
                                                                                                                                • Kellogg’s dominates but Weetabix punches above its weight
                                                                                                                                  • Figure 52: Advertisement expenditure in the UK cereal market, by top 10 companies, January 2009-March 2011
                                                                                                                                • Ofcom rules hit TV and press
                                                                                                                                  • Figure 53: Advertisement expenditure in the UK cereal market, by media type, January 2009-March 2011
                                                                                                                              • Channels to Market

                                                                                                                                • Key point
                                                                                                                                  • The multiples dominate the cereal market
                                                                                                                                    • Figure 54: UK retail value sales of breakfast cereals, by outlet type, 2008-10
                                                                                                                                • Consumer – Breakfast Cereals Usage

                                                                                                                                  • Key points
                                                                                                                                    • Breakfast cereal has widespread appeal
                                                                                                                                      • Figure 55: Trends in frequency of using breakfast cereals, 2009-10
                                                                                                                                      • Figure 56: Frequency of use of breakfast cereals, men vs women, 2010
                                                                                                                                    • Families are the most likely to use cereals
                                                                                                                                      • Figure 57: Frequency of using breakfast cereals, by lifestage, 2010
                                                                                                                                      • Figure 58: Overall and heavy usage of breakfast cereals, by age of children in the household, 2010
                                                                                                                                      • Figure 59: Frequency of using breakfast cereals, by age group, 2010
                                                                                                                                  • Consumer – Types of Breakfast Cereal Eaten

                                                                                                                                    • Key points
                                                                                                                                      • Old favourites like cornflakes and porridge dominate consumption
                                                                                                                                          • Figure 60: Types of breakfast cereal eaten, June 2011
                                                                                                                                        • Wholegrain divides the age groups
                                                                                                                                          • Bran lags behind
                                                                                                                                            • Low-fat cereal consumption rises with affluence
                                                                                                                                              • Figure 61: Usage of low fat breakfast cereals, by gross annual household income, June 2011
                                                                                                                                          • Consumer – Choice Factors

                                                                                                                                            • Key points
                                                                                                                                              • Sugar is top concern
                                                                                                                                                  • Figure 62: Factors taken into consideration when choosing breakfast cereal, June 2011
                                                                                                                                                • Sugar level is the most common consideration
                                                                                                                                                  • Women are more health-led than men in cereal choices
                                                                                                                                                    • Men are more likely to prioritise brand
                                                                                                                                                      • Health considerations rise with wealth and age
                                                                                                                                                        • Figure 63: Importance of sugar, fibre and fat content as factors when choosing breakfast cereal, by selected socio-economic groups, June 2011
                                                                                                                                                      • Natural and organic are low priorities
                                                                                                                                                      • Consumer – Attitudes Towards Breakfast Cereals

                                                                                                                                                        • Key points
                                                                                                                                                          • Consumers are not wanting for choice…
                                                                                                                                                            • Figure 64: Attitudes towards breakfast Cereals, June 2011
                                                                                                                                                          • Packaging proves a sticking point
                                                                                                                                                            • Figure 65: Agreement with the statement, “I would prefer my cereal to have less packaging”, June 2011
                                                                                                                                                          • Own-label vs branded quality
                                                                                                                                                            • Figure 66: Agreement with the statement, “own-label cereals are no different from the branded ones”, June 2011
                                                                                                                                                          • Nutrition information an important feature
                                                                                                                                                            • Figure 67: Agreement with the statement “I check out nutritional information on cereals before I buy” by gender, June 2011
                                                                                                                                                          • Multipacks face challenges
                                                                                                                                                          • Consumer – Target Groups

                                                                                                                                                            • Key points
                                                                                                                                                                • Figure 68: Target groups based on attitudes towards breakfast cereals, June 2011
                                                                                                                                                              • Traditionalists (20%)
                                                                                                                                                                • Experimenters (26%)
                                                                                                                                                                  • Own-label Fans (26%)
                                                                                                                                                                    • Brand Buyers (28%)
                                                                                                                                                                    • Appendix – Internal Market Environment

                                                                                                                                                                        • Figure 69: Agreement with selected lifestyle statements on diet and health, 2006-10
                                                                                                                                                                        • Figure 70: Agreement with selected lifestyle statements on diet and health, by demographics, 2010
                                                                                                                                                                        • Figure 71: Trends in frequency of using breakfast cereals, 2009-10
                                                                                                                                                                        • Figure 72: Frequency of using breakfast cereals, by demographics, 2010
                                                                                                                                                                        • Figure 73: Trends in average working hours, 2006-10
                                                                                                                                                                        • Figure 74: Mean winter* temperatures, UK, 2005-10
                                                                                                                                                                        • Figure 75: Weekly prices of cereals, England and Wales, January 2008-May 2011
                                                                                                                                                                        • Figure 76: RPI for fresh milk, January 2008-April 2011
                                                                                                                                                                    • Appendix – Competitive Context

                                                                                                                                                                        • Figure 77: Most popular items eaten for breakfast in the home, by demographics, June 2011
                                                                                                                                                                        • Figure 78: Next most popular items eaten for breakfast in the home, by demographics, June 2011
                                                                                                                                                                        • Figure 79: Other items eaten for breakfast in the home, by demographics, June 2011
                                                                                                                                                                        • Figure 80: Most popular items eaten for breakfast out of the home, by demographics, June 2011
                                                                                                                                                                        • Figure 81: Next most items eaten for breakfast out of the home, by demographics, June 2011
                                                                                                                                                                        • Figure 82: Other items eaten for breakfast out of the home, by demographics, June 2011
                                                                                                                                                                        • Figure 83: Competing products with breakfast cereals, by sales value, UK, 2006-10
                                                                                                                                                                    • Appendix – Who’s Innovating?

                                                                                                                                                                        • Figure 84: New product development in the UK cereals market by top 20 companies, January 2008-May 2011*
                                                                                                                                                                        • Figure 85: New product development in the UK cereals market, by flavour, 2009 and 2010
                                                                                                                                                                        • Figure 86: New product development in the UK cereals market by sub-category, January 2008-May 2011
                                                                                                                                                                        • Figure 87: New product development in the UK cereals market by private label, January 2008-May 2011
                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                        • Figure 88: Forecast of value sales for total breakfast cereals, 2006-16
                                                                                                                                                                        • Figure 89: UK retail value and volume sales for total breakfast cereals, 2006-16
                                                                                                                                                                        • Figure 90: Additional best case/worst case table for breakfast cereals, 2011/16
                                                                                                                                                                        • Figure 91: Forecast of UK retail sales of cold cereals, by value, 2006-16
                                                                                                                                                                        • Figure 92: Value sales for cold breakfast cereals, 2006-16
                                                                                                                                                                        • Figure 93: Forecast of UK retail sales of hot cereals, by value, 2006-16
                                                                                                                                                                        • Figure 94: Value sales for hot breakfast cereals, 2006-16
                                                                                                                                                                    • Appendix – Market Share

                                                                                                                                                                        • Figure 95: Market share and sales value of breakfast cereals, by brand, 2008-10
                                                                                                                                                                    • Appendix – Segment Performance

                                                                                                                                                                        • Figure 96: UK retail value sales of cold and hot breakfast cereal, 2006-11
                                                                                                                                                                        • Figure 97: UK retail volume sales of cold and hot breakfast cereal, 2006-11
                                                                                                                                                                    • Appendix – Brand Research

                                                                                                                                                                        • Figure 98: Brand usage, June 2011
                                                                                                                                                                        • Figure 99: Brand commitment, June 2011
                                                                                                                                                                        • Figure 100: Brand diversity, June 2011
                                                                                                                                                                        • Figure 101: Brand satisfaction, June 2011
                                                                                                                                                                        • Figure 102: Brand recommendation, June 2011
                                                                                                                                                                        • Figure 103: Brand attitudes, June 2011
                                                                                                                                                                        • Figure 104: Brand image – macro image, June 2011
                                                                                                                                                                        • Figure 105: Brand image – micro image, June 2011
                                                                                                                                                                        • Figure 106: Profile of target groups, by demographics, June 2011
                                                                                                                                                                        • Figure 107: Psychographic segmentation, by target group, June 2011
                                                                                                                                                                        • Figure 108: Brand usage, by target group, June 2011
                                                                                                                                                                        • Figure 109: Brand index, June 2011
                                                                                                                                                                    • Appendix – Brand Communication and Promotion

                                                                                                                                                                        • Figure 110: Topline advertising expenditure in the UK cereal market, January 2006-March 2011
                                                                                                                                                                        • Figure 111: Advertising expenditure in the UK cereal market, by product sub-category, January 2009-March 2011
                                                                                                                                                                        • Figure 112: Advertising expenditure in the UK cereal market, by media type, January 2009-March 2011
                                                                                                                                                                        • Figure 113: Advertising expenditure in the UK cereal market, by top 10 companies, January 2009-March 2011
                                                                                                                                                                    • Appendix – Channels to Market

                                                                                                                                                                        • Figure 114: UK retail value sales of breakfast cereals, by outlet type, 2008-10
                                                                                                                                                                    • Appendix – Consumer – Breakfast Cereals Usage

                                                                                                                                                                        • Figure 115: Frequency using breakfast cereals, by demographics, 2010
                                                                                                                                                                    • Appendix – Consumer – Choice Factors

                                                                                                                                                                        • Figure 116: Most popular important factors when choosing breakfast cereal, by demographics, June 2011
                                                                                                                                                                        • Figure 117: Next most popular important factors when choosing breakfast cereal, by demographics, June 2011
                                                                                                                                                                        • Figure 118: Other important factors when choosing breakfast cereal, by demographics, June 2011
                                                                                                                                                                    • Appendix – Consumer – Types of Breakfast Cereal

                                                                                                                                                                        • Figure 119: Most popular types of breakfast cereal eaten, by demographics, June 2011
                                                                                                                                                                        • Figure 120: Next most popular types of breakfast cereal eaten, by demographics, June 2011
                                                                                                                                                                    • Appendix – Consumer – Attitudes Towards Breakfast Cereals

                                                                                                                                                                        • Figure 121: Agreement with the statements ‘I get bored of eating the same cereal every day’ and ‘Own-label cereals are no different from the branded ones’, by demographics, June 2011
                                                                                                                                                                        • Figure 122: Agreement with the statements ‘I only buy branded cereal (eg Kellogg’s Corn Flakes)’ and ‘I often don’t have time for breakfast at home’, by demographics, June 2011
                                                                                                                                                                        • Figure 123: Agreement with the statements ‘I give my children dry breakfast cereal as a snack’ and ‘I tend to eat my breakfast cereal with fresh fruit or yogurt’, by demographics, June 2011
                                                                                                                                                                        • Figure 124: Agreement with the statements ‘I use breakfast cereals as an ingredient in cooking/baking’ and ‘I use breakfast cereals as a dessert topping’, by demographics, June 2011
                                                                                                                                                                        • Figure 125: Agreement with the statements ‘I have eaten the same cereal since I was young’ and ‘I think there is enough choice in the breakfast cereal aisle’, by demographics, June 2011
                                                                                                                                                                        • Figure 126: Agreement with the statements ‘There is enough choice for me to always find the cereal I want’ and ‘I often like to try out new cereals’, by demographics, June 2011
                                                                                                                                                                        • Figure 127: Agreement with the statements ‘I would prefer my cereal to have less packaging’ and ‘I check out nutritional information on cereals before I buy’, by demographics, June 2011
                                                                                                                                                                        • Figure 128: Agreement with the statement ‘Individual multipack cereal boxes are too small’, by demographics, June 2011
                                                                                                                                                                    • Appendix – Consumer – Target Groups

                                                                                                                                                                        • Figure 129: Target groups, by demographics, June 2011

                                                                                                                                                                    Companies Covered

                                                                                                                                                                    • Advertising Standards Authority
                                                                                                                                                                    • Asda Group Ltd
                                                                                                                                                                    • Associated British Foods Plc
                                                                                                                                                                    • Bank of England
                                                                                                                                                                    • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                    • Cereal Partners Worldwide
                                                                                                                                                                    • Co-operative Group
                                                                                                                                                                    • Department for Environment, Food & Rural Affairs
                                                                                                                                                                    • Domino's Pizza UK & IRL, plc
                                                                                                                                                                    • Food Standards Agency
                                                                                                                                                                    • General Mills Inc
                                                                                                                                                                    • Government Actuary's Department (GAD)
                                                                                                                                                                    • Honey Monster Foods
                                                                                                                                                                    • J. Sainsbury
                                                                                                                                                                    • Kallo Foods Ltd
                                                                                                                                                                    • Kantar Media
                                                                                                                                                                    • Kellogg Company of GB Limited
                                                                                                                                                                    • Kraft Foods UK
                                                                                                                                                                    • Marks & Spencer
                                                                                                                                                                    • Nature's Path Foods Inc
                                                                                                                                                                    • Nestlé UK Ltd
                                                                                                                                                                    • New Covent Garden Food Co
                                                                                                                                                                    • Ofcom
                                                                                                                                                                    • Office for National Statistics
                                                                                                                                                                    • PizzaExpress Limited
                                                                                                                                                                    • Premier Foods plc
                                                                                                                                                                    • Soil Association
                                                                                                                                                                    • Tesco Plc
                                                                                                                                                                    • The Woodland Trust
                                                                                                                                                                    • W Jordans (Cereals) Ltd
                                                                                                                                                                    • Waitrose Ltd
                                                                                                                                                                    • Weetabix Ltd.
                                                                                                                                                                    • Wm Morrison Supermarkets

                                                                                                                                                                    Breakfast Cereals - UK - August 2011

                                                                                                                                                                    £1,750.00 (Excl.Tax)