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Breakfast Cereals - UK - September 2015

"Overall average retail prices were rising between 2010 and 2013 but owing to the rise in popularity of the discount supermarkets and bargain stores there has been deflation in the market over the last two years. Consumers’ breakfast habits are changing, with a wider variety of foods available, providing enticement away from the traditional breakfast of cereal/porridge and toast."
- Amy Price, Senior Food & Drink Analyst

This report discusses the following key topics:

  • Catering to the more adventurous breakfast eater should help to stem the decline in sales
  • Interest in fortification and tummy health provides an incentive to NPD and communication around these issues 
  • A greater adoption of alternatives such as stevia could alleviate concerns on sugar
 

Sales of total breakfast cereals rose by 6.7% over 2010-15, with volumes falling by almost 6% over the five years to 431m kg.

Overall average retail prices were rising between 2010 and 2013 but owing to the rise in popularity of the discount supermarkets and bargain stores there has been deflation in the market over the last two years.

Consumers’ breakfast habits are changing, with a wider variety of foods available, providing enticement away from the traditional breakfast of cereal/porridge and toast.

The dangers of high-sugar diets attracted prolonged negative media coverage in 2014 and into 2015. 82% of UK adults see flavoured cereal as containing a lot of sugar, with these cereals being hit hard by the heightened concerns around sugar.

This report examines the UK retail market for breakfast cereals and excludes sales through foodservice channels.

For the purposes of this report, breakfast cereals are segmented into ready-to-eat (RTE) cereals and hot cereal products. The former comprises any cereals that are served without heating them, such as corn flakes or muesli and include ready-to-serve snack packs such as Rumblers and Kellogg’s To Go. The hot cereal segment consists of porridge, oatmeal and instant hot oat products.

Cereal bars (eg Nature Valley’s Crunchy) and other breakfast products (such as Kellogg’s Pop Tarts) are excluded from the scope of this report, but reference to them is made where relevant in the light of their role as competing products.

 

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
      • Executive Summary

        • The market
          • Figure 1: UK retail value sales of the total breakfast cereals market, 2010-20
        • Sugar debates affects the market
          • A desire for variety is changing the breakfast occasion
            • Companies, brands and innovation
              • Kellogg’s dominates RTE cereals
                • Quaker sees value growth in hot cereals
                  • Brands look to distinguish themselves through their image
                    • Cereals look to strengthen high-protein proposition
                      • The consumer
                        • More than eight in 10 adults eat cereals
                          • Figure 2: Usage of breakfast cereals, June 2015
                        • Porridge that helps gut health/digestion top of product enticements
                          • Figure 3: Interest in select breakfast cereal concepts, June 2015
                        • Fortification offers consumers a way to get nutrients into their diet
                          • Figure 4: Attitudes towards cold breakfast cereals, June 2015
                        • High sugar content of flavoured cereal is a likely barrier to entry
                          • Figure 5: Perceptions of select breakfast foods, June 2015
                      • Issues and Insights

                        • Catering to the more adventurous breakfast eater should help to stem the decline in sales
                          • The facts
                            • The implications
                              • Interest in fortification and tummy health provides an incentive to NPD and communication around these issues
                                • The facts
                                  • The implications
                                    • A greater adoption of alternatives such as stevia could alleviate concerns on sugar
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Sales slip in the cereals market
                                            • Cereals are expected to see value growth over 2015-20, though a drop in volumes
                                              • Sugar attracts negative attention
                                                • Increased incomes should help to support sales
                                                  • A desire for variety is changing the breakfast occasion
                                                  • Market Size and Forecast and Segment Performance

                                                    • Sales slip in the cereals market
                                                      • Figure 6: UK retail value and volume sales of the total breakfast cereals market, 2010-20
                                                      • Figure 7: UK retail value sales of the total breakfast cereals market, 2010-20
                                                    • RTE cereals to see drop in value and volume sales in 2015
                                                      • Figure 8: UK retail value and volume sales of the RTE breakfast cereals market, 2010-20
                                                      • Figure 9: UK retail value sales of the RTE breakfast cereals market, 2010-20
                                                    • Value and volume sales stall for hot cereals
                                                      • Figure 10: UK retail value and volume sales of the hot breakfast cereals market, 2010-20
                                                      • Figure 11: UK retail value sales of the hot breakfast cereals market, 2010-20
                                                  • Market Drivers

                                                    • Sugar debate continues to impact the market
                                                      • A desire for variety is changing the breakfast occasion
                                                        • Out of home poses a challenge
                                                          • Increased incomes should help to support sales
                                                            • The rise in children should provide a boost
                                                            • Key Players – What You Need to Know

                                                              • Kellogg’s loses sales and reduces adspend
                                                                • Quaker bucks downward trend to see growth
                                                                  • Cereals look to strengthen high-protein proposition
                                                                    • Brands look to distinguish themselves through their image
                                                                    • Brand Research

                                                                      • What you need to know
                                                                        • Brand map
                                                                          • Figure 12: Attitudes towards and usage of selected brands, June 2015
                                                                        • Key brand metrics
                                                                          • Figure 13: Key metrics for selected brands, June 2015
                                                                        • Brand attitudes: Dorset Cereals promotes a more premium brand image
                                                                          • Figure 14: Attitudes, by brand, June 2015
                                                                        • Brand personality: Shredded Wheat’s healthy angle limits upbeat connotations
                                                                          • Figure 15: Brand personality – Macro image, June 2015
                                                                        • Frosties may find usage limited by association with being unhealthy
                                                                          • Figure 16: Brand personality – Micro image, June 2015
                                                                        • Brand analysis
                                                                          • Quaker Oat So Simple cements strong brand image with high recommendation
                                                                            • Figure 17: User profile of Quaker Oat so Simple, June 2015
                                                                          • Dorset Cereals encourages different perceptions to all other brands
                                                                            • Figure 18: User profile of Dorset Cereals, June 2015
                                                                          • Crunchy Nut leads on perceptions of taste
                                                                            • Figure 19: User profile of Crunchy Nut, June 2015
                                                                          • Special K maintains strong brand image among women
                                                                            • Figure 20: User profile of Special K, June 2015
                                                                          • Alpen could face increasing challenge from Dorset Cereals
                                                                            • Figure 21: User profile of Alpen, June 2015
                                                                          • Shredded Wheat has a more favourable image among older consumers
                                                                            • Figure 22: User profile of Shredded Wheat, June 2015
                                                                          • Cheerios’ family image may limit breadth of appeal
                                                                            • Figure 23: User profile of Cheerios, June 2015
                                                                          • Frosties scores highly on taste, but perceptions of unhealthiness may affect recommendation
                                                                            • Figure 24: User profile of Frosties, June 2015
                                                                        • Market Share

                                                                          • Kellogg’s continues to dominate RTE cereals, despite falling sales
                                                                            • Weetabix and Nestlé outperform Kellogg’s
                                                                              • Dorset Cereals and Mornnflake buck the category trend to see value growth
                                                                                • Figure 25: UK retail sales of leading brands in the RTE breakfast cereals market, by value, 2013/14 and 2014/15
                                                                                • Figure 26: UK retail sales of leading brands in the RTE breakfast cereals market, by volume, 2013/14 and 2014/15
                                                                                • Figure 27: UK retail sales of leading manufacturers in the RTE breakfast cereals market, by value and volume, 2013/14 and 2014/15
                                                                              • Quaker dominates hot cereals through its Oats So Simple brand
                                                                                • Weetabix sees a steep decline in value and volume sales
                                                                                  • Kellogg’s looks to cereal-branded porridge to boost sales
                                                                                    • Figure 28: UK retail sales of leading brands in the hot breakfast cereals market, by value and volume, 2013/14 and 2014/15
                                                                                    • Figure 29: UK retail sales of leading manufacturers in the hot breakfast cereals market, by value and volume, 2013/14 and 2014/15
                                                                                • Launch Activity and Innovation

                                                                                  • RTE cereals manufacturers have stepped up NPD following a recent slide
                                                                                    • Figure 30: Share of new product development in the UK cereals market, by sub-category, 2012-15*
                                                                                  • Low/no/reduced sugar claims remain niche
                                                                                    • Figure 31: Share of new product development in the UK cereals market, by the low/no/reduced sugar claim, 2012-15*
                                                                                  • Cereal brands look to tap into the gluten-free trend
                                                                                      • Figure 32: Share of new product development in the UK cereals market, by the gluten-free claim, 2012-15*
                                                                                    • Calling out protein content to appeal to health-conscious consumers
                                                                                      • Brands extend their brands into new areas
                                                                                        • Brands launch dry bircher muesli products
                                                                                          • One cup formats should appeal to the time-pressed
                                                                                          • Brand Communication and Promotion

                                                                                            • Adspend falls as Kellogg’s continues to cut back
                                                                                              • Nestlé increases investment in Shredded Wheat in 2015
                                                                                                • Quaker invests in TV support
                                                                                                  • Weetabix focuses on nutrition
                                                                                                    • Dorset Cereals promotes energy message
                                                                                                      • Figure 33: Recorded above-the-line, online display and direct mail total advertising expenditure on breakfast cereals, by top 10 advertisers (sorted by 2014), 2011-15*
                                                                                                    • Inability to advertise to children affects market
                                                                                                      • Figure 34: Recorded above-the-line, online display and direct mail total advertising expenditure on breakfast cereals, by media type (sorted by 2014), 2011-15*
                                                                                                    • Brands look to experiential campaigns
                                                                                                    • The Consumer – What You Need to Know

                                                                                                      • Usage stands at more than 80%
                                                                                                        • Opportunity to market tummy health for porridge
                                                                                                          • Sugar attracts negative attention
                                                                                                            • Fortification appeals to consumers looking for a fast track to nutrition
                                                                                                              • Customisation provides scope for NPD
                                                                                                                • A desire for variety poses a challenge to the market
                                                                                                                • Breakfast Cereals Usage

                                                                                                                  • More than eight in ten adults eat cereals
                                                                                                                    • Figure 35: Usage of breakfast cereals, June 2015
                                                                                                                  • Parents over-index across all types
                                                                                                                    • Figure 36: Usage of breakfast cereals, by parent of under-16s, June 2015
                                                                                                                  • Sizeable minority eat cereals every day
                                                                                                                    • Figure 37: Frequency of eating breakfast cereals, June 2015
                                                                                                                  • Almost half eat breakfast biscuits
                                                                                                                    • Figure 38: Frequency of eating breakfast biscuits, June 2015
                                                                                                                • Breakfast Cereal Enticements

                                                                                                                  • Porridge that helps gut health/digestion is top of product enticements
                                                                                                                    • Figure 39: Interest in select breakfast cereal concepts, June 2015
                                                                                                                  • Single serve packaging appeals to a sizeable minority
                                                                                                                    • Online poses an opportunity
                                                                                                                      • Interest in different grains
                                                                                                                      • Behaviour towards Breakfast Cereals

                                                                                                                        • Switching between breakfast foods threatens the cereals market
                                                                                                                          • Figure 40: Statements on breakfast cereals, June 2015
                                                                                                                        • Customisation is still important
                                                                                                                          • Switching to breakfast biscuits poses a concern
                                                                                                                          • Attitudes towards Cold Breakfast Cereals

                                                                                                                            • Fortification offers consumers a way to get nutrients into their diet
                                                                                                                              • Figure 41: Attitudes towards cold breakfast cereals, June 2015
                                                                                                                            • Openness to cereals as a meal beyond breakfast
                                                                                                                              • Almost one in four does not consider health
                                                                                                                              • Perceptions of Breakfast Foods

                                                                                                                                • High sugar content of flavoured cereal is a likely barrier to entry
                                                                                                                                  • Flavoured cereals are seen to be unhealthy by almost two thirds
                                                                                                                                    • Figure 42: Perceptions of select breakfast foods, June 2015
                                                                                                                                  • Fibre and protein content should be positives for breakfast cereals
                                                                                                                                    • Cereals/porridge lose out to eggs on protein claims
                                                                                                                                      • Around half of adults describe cereal and porridge as tasty
                                                                                                                                      • Appendix – Market Size and Forecast and Segment Performance

                                                                                                                                          • Figure 43: Best- and worst-case forecasts for the total UK breakfast cereals market, by value, 2015-20
                                                                                                                                          • Figure 44: Best- and worst-case forecasts for the total UK breakfast cereals market, by volume, 2015-20
                                                                                                                                          • Figure 45: UK retail volume sales of the total breakfast cereals market, 2010-20
                                                                                                                                          • Figure 46: Best- and worst-case forecasts for the RTE breakfast cereals market, by value, 2015-20
                                                                                                                                          • Figure 47: Best- and worst-case forecasts for the RTE breakfast cereals market, by volume, 2015-20
                                                                                                                                          • Figure 48: UK retail volume sales of the RTE breakfast cereals market, 2010-20
                                                                                                                                          • Figure 49: Best- and worst-case forecasts for the hot breakfast cereals market, by value, 2015-20
                                                                                                                                          • Figure 50: Best- and worst-case forecasts for the hot breakfast cereals market, by volume, 2015-20
                                                                                                                                          • Figure 51: UK retail volume sales of the hot breakfast cereals market, 2010-20

                                                                                                                                      Companies Covered

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                                                                                                                                      Breakfast Cereals - UK - September 2015

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