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Breakfast Cereals - UK - August 2012

“The breakfast cereals market has remained largely unchanged in terms of packaging for decades. Yet with almost eight in ten consumers interested in buying a cereal with resealable packaging there is considerable unmet demand for packaging solutions which will keep cereals fresher for longer. There is an opportunity for cereal manufacturers to implement a resealable feature which is functional, reliable and – most importantly – cost-effective to differentiate themselves from the rest of the market.”

– Emma Clifford, Senior Food Analyst

Some questions answered in this report include:

  • How is competition from other foods impacting upon the cold cereals market?
  • What key innovation trends are shaping the market?
  • Is the market responding adequately to consumers’ demand for healthier cereals?
  • How can packaging innovation tap into the demand for freshness?
  • How is social media impacting upon the breakfast cereals market?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: UK retail value sales forecast for breakfast cereals, 2007-17
            • Market factors
              • Ageing population presents challenges and opportunities
                • Figure 2: Trends in the age structure of the UK population, 2007-17
              • Milder temperatures dampen usage of hot cereals
                • Rising commodity inflation forces cereal makers to hike up prices
                  • Companies, brands and innovation
                    • Figure 3: Market share of breakfast cereals, by top ten brands, 2011
                  • Adspend
                    • The consumer
                      • Nine in ten adults eat breakfast cereals
                        • Figure 4: Usage of breakfast cereals (including porridge/oats), 2009-11
                      • Single-grain cereals and porridge are most popular
                        • Figure 5: Types of breakfast cereal eaten, June 2012
                      • Shoppers want cereals to appeal to the whole family
                        • Figure 6: Factors taken into consideration when choosing breakfast cereal, June 2012
                      • Older shoppers are ingredient-savvy
                        • Demand for better packaging options
                          • Figure 7: Attitudes towards cereals, June 2012
                        • The validity of health claims divides the nation
                          • Snacking creates more usage occasions
                            • Figure 8: Attitudes towards cereals, June 2012
                          • Under-35s are most adventurous with new flavours
                            • What we think
                            • Issues in the Market

                                • How is competition from other foods impacting upon the cold cereals market?
                                  • What key innovation trends are shaping the market?
                                    • Is the market responding adequately to consumers’ demand for healthier cereals?
                                      • How can packaging innovation tap into the demand for freshness?
                                        • How is social media impacting upon the breakfast cereals market?
                                        • Trend Application

                                            • Trend: Cool Vending
                                              • Trend: Hungry Planet
                                                • 2015 Trend: Old Gold
                                                • Market Drivers

                                                  • Key points
                                                    • The importance of fibre climbs with age
                                                      • Figure 9: Agreement with the statement ‘I try to include plenty of fibre in my diet these days’, by gender, age and socio-economic group, 2011
                                                    • With incomes under strain, healthy intentions are diminishing
                                                      • Figure 10: Agreement with the statements ‘I am prepared to pay more for foods that don’t contain artificial additives’ and ‘I consider my diet to be very healthy’, 2007-11
                                                      • Figure 11: Agreement with the statements ‘I am prepared to pay more for foods that don’t contain artificial additives’ and ‘I consider my diet to be very healthy’, by gender, age and socio-economic group, 2011
                                                    • Employment turns a corner in 2011
                                                      • Figure 12: Trends in average working hours, per day, 2007-11
                                                    • Ageing population presents challenges and opportunities
                                                      • Figure 13: Trends in the age structure of the UK population, 2007-17
                                                    • Families are a key target audience
                                                      • Figure 14: Forecast adult population trends, by lifestage, 2007-17
                                                    • Oat and wheat prices are up again in 2012
                                                      • Figure 15: Weekly prices of cereals, England and Wales, January 2009-May 2012
                                                    • Supermarket price wars cause milk prices to slip
                                                      • Figure 16: Index of RPI for fresh milk and monthly farmgate milk prices, January 2008-April 2012
                                                    • 2011 was an exceptionally mild year
                                                      • Figure 17: Mean winter* temperatures, UK, 2005/06-2011/12
                                                  • Strengths and Weaknesses in the Market

                                                    • Strengths
                                                      • Weaknesses
                                                      • Who’s Innovating?

                                                        • Key points
                                                          • Cold cereals continue to dominate, but an uptick in hot cereals NPD
                                                            • Figure 18: New product development in the UK cereals market, by category, 2008-12
                                                          • Supermarkets up their game with own-label
                                                            • Figure 19: New product development in the UK cereals market, by private label, 2009-11
                                                          • Asda ramps up NPD in 2011
                                                            • Figure 20: New product development in the UK cereals market, by top 20 companies, 2009-12
                                                          • Kellogg’s ups the ante for kids’ cereals
                                                            • Oats get macho with the launch of Fuel
                                                              • Plain cereals hold their steady lead
                                                                • Figure 21: New product development in the UK cereals market, top ten flavours, 2009-11
                                                              • High-fibre launches leap ahead
                                                                • Figure 22: New product development in the UK cereals market, by top ten claims, 2011
                                                                • Figure 23: Change in share of claims in new product launches in the UK cereals market, 2009-11
                                                              • Convenience is a key area for NPD
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Volume sales predicted to slump in 2012
                                                                    • Figure 24: UK retail volume and value sales for total breakfast cereals, 2007-17
                                                                  • Slight decline expected in volume sales…
                                                                    • Figure 25: UK retail volume sales of cold and hot breakfast cereals, 2007-17
                                                                  • …but value continues to grow driven by price inflation
                                                                    • Figure 26: UK retail value sales of cold and hot breakfast cereals, 2007-17
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Volume sales of cold cereals tumble…
                                                                      • Figure 27: UK retail value and volume sales of cold breakfast cereals, 2007-17
                                                                    • …while hot cereals post healthy volume growth
                                                                      • Figure 28: UK retail value and volume sales of hot breakfast cereals, 2007-17
                                                                  • Market Share

                                                                    • Key points
                                                                      • Kellogg’s brands continue to lead the market
                                                                        • Figure 29: Market share of breakfast cereals, by top ten brands, 2011
                                                                      • Many classics have taken a hit
                                                                        • Figure 30: Market share and sales value of breakfast cereals, by brand, 2009-11
                                                                      • Increased competition, particularly in the kids’ cereals category
                                                                        • Oat So Simple sales have soared
                                                                          • Own-label grew ahead of the market in 2011
                                                                          • Companies and Products

                                                                              • Figure 31: Selected leading companies in the breakfast cereals market in the UK and their brands, 2012
                                                                            • Kellogg's
                                                                              • Background
                                                                                • Product range
                                                                                  • Product innovation
                                                                                    • Marketing
                                                                                      • Weetabix
                                                                                        • Background
                                                                                          • Product range
                                                                                            • Product innovation
                                                                                              • Marketing
                                                                                                • Cereal Partners UK
                                                                                                  • Background
                                                                                                    • Product range and innovation
                                                                                                      • Marketing
                                                                                                        • Quaker Oats
                                                                                                          • Background
                                                                                                            • Product range and innovation
                                                                                                              • Marketing
                                                                                                                • Dorset Cereals
                                                                                                                  • Background
                                                                                                                    • Product range and innovation
                                                                                                                      • Marketing
                                                                                                                        • Honey Monster Foods
                                                                                                                          • Background
                                                                                                                            • Product range and innovation
                                                                                                                              • Recent activity
                                                                                                                                • Jordans
                                                                                                                                  • Background
                                                                                                                                    • Product range
                                                                                                                                      • Marketing
                                                                                                                                      • Brand Communication and Promotion

                                                                                                                                        • Key points
                                                                                                                                          • Adspend falls by a sixth in 2011
                                                                                                                                            • Figure 32: Topline advertising expenditure in the UK cereals market, 2008-11
                                                                                                                                            • Figure 33: Advertising expenditure in the UK cereals market, by product sub-category, 2008-12
                                                                                                                                          • Kellogg’s continues to monopolise cereal advertising
                                                                                                                                            • Figure 34: Advertising expenditure in the UK cereals market, by top ten companies, 2008-11
                                                                                                                                            • Figure 35: Share of advertising expenditure in the UK cereals market, by top ten companies, 2008-11
                                                                                                                                          • TV advertising dominates
                                                                                                                                            • Figure 36: Advertising expenditure in the UK cereals market, by media type, 2008-11
                                                                                                                                            • Figure 37: Share of advertising expenditure in the UK cereals market, by media type, 2008-11
                                                                                                                                        • Channels to Market

                                                                                                                                          • Key point
                                                                                                                                            • Multiples dominate the market
                                                                                                                                              • Figure 38: UK retail value sales of breakfast cereals, by outlet type, 2009-11
                                                                                                                                          • Brand Research

                                                                                                                                            • Brand map
                                                                                                                                                • Figure 39: Attitudes towards and usage of brands in the breakfast cereal sector, June 2012
                                                                                                                                              • Correspondence analysis
                                                                                                                                                • Brand attitudes
                                                                                                                                                  • Figure 40: Attitudes, by breakfast cereal brand, May 2012
                                                                                                                                                • Brand personality
                                                                                                                                                  • Figure 41: Breakfast cereal brand personality – macro image, May 2012
                                                                                                                                                  • Figure 42: Breakfast cereal brand personality – micro image, May 2012
                                                                                                                                                • Brand experience
                                                                                                                                                  • Figure 43: Breakfast cereals brand usage, May 2012
                                                                                                                                                  • Figure 44: Satisfaction with various breakfast cereal brands, May 2012
                                                                                                                                                  • Figure 45: Consideration of breakfast cereal brands, May 2012
                                                                                                                                                  • Figure 46: Consumer perceptions of current breakfast cereal brand performance, May 2012
                                                                                                                                                  • Figure 47: Breakfast cereal brand recommendation – Net Promoter Score, May 2012
                                                                                                                                                • Brand index
                                                                                                                                                  • Figure 48: Breakfast cereals brand index, May 2012
                                                                                                                                                  • Figure 49: Breakfast cereals brand index vs. recommendation, May 2012
                                                                                                                                                • Target group analysis
                                                                                                                                                  • Figure 50: Target groups, May 2012
                                                                                                                                                  • Figure 51: Breakfast cereal brand usage, by target groups, May 2012
                                                                                                                                                • Group One – Conformists
                                                                                                                                                  • Group Two – Simply the Best
                                                                                                                                                    • Group Three – Shelf Stalkers
                                                                                                                                                      • Group Four – Habitual Shoppers
                                                                                                                                                        • Group Five – Individualists
                                                                                                                                                        • The Consumer – Breakfast Cereal Usage

                                                                                                                                                          • Key points
                                                                                                                                                            • Consumption of breakfast cereals is high
                                                                                                                                                              • Figure 52: Usage of breakfast cereals (including porridge/oats), by frequency, 2011
                                                                                                                                                              • Figure 53: Trends in frequency of usage of breakfast cereals (including porridge/oats), 2009-11
                                                                                                                                                            • Usage peaks among women and 35-44s
                                                                                                                                                              • Figure 54: Frequency of usage of breakfast cereals (including porridge/oats), by gender, 2011
                                                                                                                                                            • Families eat the most cereal
                                                                                                                                                              • Figure 55: Frequency of usage of breakfast cereals (including porridge/oats), by lifestage and presence of children, 2011
                                                                                                                                                          • The Consumer – Types of Breakfast Cereal Eaten

                                                                                                                                                            • Key points
                                                                                                                                                              • Single-grain cereals are most popular
                                                                                                                                                                  • Figure 56: Types of breakfast cereal eaten, June 2012
                                                                                                                                                                • Porridge usage peaks among over-55s
                                                                                                                                                                  • Figure 57: Usage of porridge in the last 12 months, by gender, age and socio-economic group, June 2012
                                                                                                                                                                • Under-35s opt for multigrain, children’s and chocolate cereals
                                                                                                                                                                  • Figure 58: Usage of multigrain, children’s and chocolate cereals in the last 12 months, by gender, age and socio-economic group, June 2012
                                                                                                                                                                • Diet cereals are favoured by women and under-35s
                                                                                                                                                                • The Consumer – Choice Factors

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Shoppers want cereals to please the whole family
                                                                                                                                                                        • Figure 59: Factors taken into consideration when choosing breakfast cereals, June 2012
                                                                                                                                                                      • Special offers attract price-savvy shoppers in their droves
                                                                                                                                                                        • Over-55s are most health-led
                                                                                                                                                                          • Figure 60: Consumers who consider fibre, sugar and wholegrain content when choosing breakfast cereals, by gender, age and socio-economic group, June 2012
                                                                                                                                                                        • Parents care the most about vitamin fortification
                                                                                                                                                                          • Men are more brand-oriented
                                                                                                                                                                          • The Consumer – Attitudes Towards Cereals

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Strong demand for resealable packaging
                                                                                                                                                                                  • Figure 61: Attitudes towards cereals, June 2012
                                                                                                                                                                                • Low-sugar variants spark majority interest
                                                                                                                                                                                  • Under-35s want an energy boost
                                                                                                                                                                                    • Consumers are divided over trusting the health benefits of cereals
                                                                                                                                                                                      • Own-label is gaining trust
                                                                                                                                                                                        • Figure 62: Agreement with the statement ‘Own-label cereal is just as good as branded‘, June 2012
                                                                                                                                                                                      • Nearly half of cereal eaters want variety
                                                                                                                                                                                        • Vitamin D is an issue in the public eye
                                                                                                                                                                                          • The perceived inconvenience of porridge is a barrier for three in ten
                                                                                                                                                                                          • The Consumer – Further Attitudes Towards Cereals

                                                                                                                                                                                            • Key points
                                                                                                                                                                                              • Usage of cereals is not restricted to breakfast time
                                                                                                                                                                                                  • Figure 63: Further attitudes towards cereals, June 2012
                                                                                                                                                                                                • Over-55s are most likely to add extra toppings
                                                                                                                                                                                                  • Under-35s are most experimental with flavours
                                                                                                                                                                                                    • One in five eat cereals with hot milk
                                                                                                                                                                                                      • A quarter of parents want more healthy kids’ cereals
                                                                                                                                                                                                        • Under-25s often eat breakfast out of the home
                                                                                                                                                                                                        • The Consumer – Target Groups

                                                                                                                                                                                                          • Key points
                                                                                                                                                                                                            • Four target groups
                                                                                                                                                                                                              • Figure 64: Target groups based on attitudes towards breakfast cereals, June 2011
                                                                                                                                                                                                            • Enthusiasts (27%)
                                                                                                                                                                                                              • Brand Buyers (24%)
                                                                                                                                                                                                                • Traditionalists (22%)
                                                                                                                                                                                                                  • Own-Label Fans (27%)
                                                                                                                                                                                                                  • Appendix – Market Drivers

                                                                                                                                                                                                                      • Figure 65: Agreement with selected lifestyle statements on diet and health, by demographics, 2011
                                                                                                                                                                                                                  • Appendix – Brand Research

                                                                                                                                                                                                                      • Figure 66: Brand usage, May 2012
                                                                                                                                                                                                                      • Figure 67: Brand commitment, May 2012
                                                                                                                                                                                                                      • Figure 68: Brand momentum, May 2012
                                                                                                                                                                                                                      • Figure 69: Brand diversity, May 2012
                                                                                                                                                                                                                      • Figure 70: Brand satisfaction, May 2012
                                                                                                                                                                                                                      • Figure 71: Brand recommendation, May 2012
                                                                                                                                                                                                                      • Figure 72: Brand attitude, May 2012
                                                                                                                                                                                                                      • Figure 73: Brand image – macro image, May 2012
                                                                                                                                                                                                                      • Figure 74: Brand image – micro image, May 2012
                                                                                                                                                                                                                      • Figure 75: Profile of target groups, by demographics, May 2012
                                                                                                                                                                                                                      • Figure 76: Psychographic segmentation, by target groups, May 2012
                                                                                                                                                                                                                      • Figure 77: Brand usage, by target group, May 2012
                                                                                                                                                                                                                    • Brand index
                                                                                                                                                                                                                      • Figure 78: Brand index, May 2012
                                                                                                                                                                                                                  • Appendix – The Consumer – Breakfast Cereals Usage

                                                                                                                                                                                                                      • Figure 79: Frequency of usage of breakfast cereals (including porridge/oats), by demographics, 2011
                                                                                                                                                                                                                  • Appendix – The Consumer – Types of Breakfast Cereals Eaten

                                                                                                                                                                                                                      • Figure 80: Most popular types of breakfast cereal eaten, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 81: Next most popular types of breakfast cereal eaten, by demographics, June 2012
                                                                                                                                                                                                                  • Appendix – The Consumer – Choice Factors

                                                                                                                                                                                                                      • Figure 82: Most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 83: Next most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 84: Other factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 85: Most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 86: Next most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
                                                                                                                                                                                                                  • Appendix – Attitudes towards Breakfast Cereals

                                                                                                                                                                                                                      • Figure 87: Agreement with the statements ‘Porridge is inconvenient to prepare’ and ‘I should be getting more Vitamin D in my diet’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 88: Agreement with the statements ‘I trust the health benefits breakfast cereals promise’ and ‘I would buy a cereal with resealable packaging’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 89: Agreement with the statements ‘I would prefer more convenient packaging in cereals’ and ‘I would like to see more healthier, chocolate-flavoured cereals’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 90: Agreement with the statements ‘I prefer porridge to cold cereal as it's more filling’ and ‘I'd be interested in buying low-sugar versions of my favourite brands’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 91: Agreement with the statements ‘I get bored eating the same breakfast day in day out’ and ‘Own-label cereal is just as good as branded’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 92: Agreement with the statements ‘I’d like to see more packaging that would keep my cereal fresher for longer’ and ‘I buy breakfast that gives me an energy boost’, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 93: Attitudes towards cereals, by most popular types of breakfast cereal eaten, June 2012
                                                                                                                                                                                                                      • Figure 94: Attitudes towards cereals, by next most popular types of breakfast cereal eaten, June 2012
                                                                                                                                                                                                                  • Appendix – Further Attitudes towards Breakfast Cereals

                                                                                                                                                                                                                      • Figure 95: Most popular attitudes towards cereals, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 96: Next most popular attitudes towards cereals, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 97: Other attitudes towards cereals, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 98: Attitudes towards cereals, by most popular types of breakfast cereal eaten, June 2012
                                                                                                                                                                                                                      • Figure 99: Attitudes towards cereals, by next most popular types of breakfast cereal eaten, June 2012
                                                                                                                                                                                                                  • Appendix – The Consumer – Target Groups

                                                                                                                                                                                                                      • Figure 100: Target groups, by demographics, June 2012
                                                                                                                                                                                                                      • Figure 101: Attitudes towards cereals, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 102: Types of breakfast cereal eaten, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 103: Number of different types of cereal in the home at any one time, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 104: Factors taken into consideration when choosing breakfast cereal, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 105: Factors taken into consideration when choosing breakfast cereal, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 106: Attitudes towards cereals, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 107: Grocery shopping habits, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 108: Attitude towards health and healthy lifestyles, by target groups, June 2012
                                                                                                                                                                                                                      • Figure 109: Cooking and eating habits, by target groups, June 2012

                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                                                                  • Associated British Foods Plc
                                                                                                                                                                                                                  • Bright Food Co Ltd
                                                                                                                                                                                                                  • Cereal Partners Worldwide
                                                                                                                                                                                                                  • Dorset Cereals
                                                                                                                                                                                                                  • Doves Farm Foods Ltd
                                                                                                                                                                                                                  • General Mills Inc
                                                                                                                                                                                                                  • Glisten PLC
                                                                                                                                                                                                                  • Honey Monster Foods
                                                                                                                                                                                                                  • Kallo Foods Ltd
                                                                                                                                                                                                                  • Kellogg Company of GB Limited
                                                                                                                                                                                                                  • Nestlé UK Ltd
                                                                                                                                                                                                                  • Pepsi-Cola UK
                                                                                                                                                                                                                  • Quaker
                                                                                                                                                                                                                  • Rude Health
                                                                                                                                                                                                                  • W Jordans (Cereals) Ltd
                                                                                                                                                                                                                  • Weetabix Ltd.

                                                                                                                                                                                                                  Breakfast Cereals - UK - August 2012

                                                                                                                                                                                                                  US $2,583.33 (Excl.Tax)