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Private Label Cereal - US - July 2010

Despite recent evidence that the economy may slowly be coming out of a deep recession, consumers are still wary and have been more cautious with their spending. This has translated to opportunities for private label manufacturers, which offer products at lower prices than name-brand equivalents. In categories such as cereal, where prices can exceed $5 a box, private label is an attractive option. Of concern for name-brand manufacturers is that consumers who, in the down economy have opted for lower-cost alternatives such as those offered by store brands, will not return to name brands, even when the economy recovers. This is of particular concern for cereal companies, as consumers do not necessarily feel there is a significant product difference between name and private-label brands.

This report offers insights on the following:

  • insights into what is driving hot and cold cereal sales performance, as well as the influence of private label on these segments and their impact on name brands
  • an analysis of opportunities for private-label companies to grow their business by considering new markets and target audiences
  • a review on how various retail channels are faring with regard to name and store brand cereals and how the way consumers perceive food channels versus other outlet types can influence their shopping behavior
  • a comparison of consumers’ attitudes toward name brand and private-label cereal and how their perceptions of each are shaping their buying behavior
  • an analysis of how satisfied consumers are with their current cereal options and what they are looking for in terms of future improvements that may form the foundation for new sub-segments focused on functional benefits.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Cereal a large category but growth is slower
                      • Sales of all breakfast cereal vs. private-label breakfast cereal
                        • Private label cold cereal outselling hot cereal
                          • Food channels reverse negative trend
                            • Quaker is the dominant hot cereal name-brand manufacturer, Kellogg’s leads cold cereal
                              • New product introduction claims
                                • Name-brand and private label purchase behavior
                                  • Gender and pricing influence on store brand purchase
                                    • Cereal satisfaction and desired improvements
                                      • Race/Hispanic influence on private label vs. name-brand purchases
                                      • Insights and Opportunities

                                        • Overview
                                          • Drug stores can create healthy private label cereals
                                            • Cross-promote with related private label items
                                              • Develop cereals that tie in with local sports or colleges
                                                • Develop ethnic-driven products that appeal to Hispanics
                                                  • Develop promotion with container companies
                                                  • Inspire Insights

                                                      • Trend 1: The Re-Socialization of Food
                                                        • From communal to commodity
                                                          • Recreate the eating space
                                                            • Trend 2: Unconscious Decisions
                                                              • Coming to consciousness
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Cereal big but not getting any bigger
                                                                    • All breakfast cereal—sales and forecast
                                                                      • Figure 1: FDMx sales and forecast of breakfast cereal, at current prices, 2005-15
                                                                      • Figure 2: FDMx sales and forecast of breakfast cereal, at inflation-adjusted prices, 2005-15
                                                                    • Sales of all breakfast cereal vs. private-label breakfast cereal
                                                                      • Figure 3: FDMx sales of breakfast cereal, total vs. private label, 2005-10
                                                                    • Private label outgrowing brands
                                                                      • Figure 4: FDMx sales and forecast of private-label breakfast cereal, at current prices, 2005-15
                                                                      • Figure 5: FDMx sales of private-label breakfast cereal, at inflation-adjusted prices, 2005-15
                                                                  • Segment Performance—Overview

                                                                    • Key points
                                                                      • Private label cold cereal outselling hot cereal
                                                                        • Private label breakfast cereal sales, by segment
                                                                          • Figure 6: FDMx private label sales of breakfast cereal, by segment, 2009 and 2010
                                                                      • Segment Performance—Hot Cereal

                                                                        • Key points
                                                                          • Private label enjoying growth at the expense of name brands
                                                                            • Hot cereal sales
                                                                              • Figure 7: U.S. FDMx sales and forecast of hot cereal, total vs. private label, 2005-15
                                                                          • Segment Performance—Cold Cereal

                                                                            • Key points
                                                                              • Private label hits sales peak in 2010
                                                                                • Cold cereal sales
                                                                                  • Figure 8: U.S. FDMx sales and forecast of cold cereal, total vs. private label, 2005-15
                                                                              • Retail Channels

                                                                                • Key points
                                                                                  • Food channels reverse negative trend
                                                                                    • Channel sales and trends
                                                                                      • Figure 9: FDMx sales of private-label breakfast cereal, 2005-10
                                                                                      • Figure 10: Food and “other FDMx” stores’ sales share of FDMx sales of private-label breakfast cereal, 2005-10
                                                                                  • Retail Channels—Food Retailers

                                                                                    • Key points
                                                                                      • Overall breakfast sales virtually unchanged
                                                                                        • Private label share slowly growing
                                                                                          • Food retailers’ sales
                                                                                            • Figure 11: Food retailers’ sales of breakfast cereal, total vs. private label, 2005-10
                                                                                        • Retail Channels—“Other” Retailers

                                                                                          • Key points
                                                                                            • Cereal sales growth leveling off
                                                                                              • Private label growth slowing down as well
                                                                                                • Other retailers’ sales
                                                                                                  • Figure 12: Other FDMx retailers’ sales of breakfast cereal, total vs. private label, 2005-10
                                                                                              • Brands vs. Private Label—Hot Cereal

                                                                                                • Key points
                                                                                                  • Quaker is the dominant name-brand manufacturer
                                                                                                    • Smaller manufacturers enjoying modest success
                                                                                                      • Figure 13: FDMx top brands and private label sales of hot cereal, 2009 and 2010
                                                                                                    • Top brands in terms of usage
                                                                                                      • Figure 14: Brands of hot cereal eaten in household, 2005-09
                                                                                                  • Brands vs. Private Label—Cold Cereal

                                                                                                    • Key points
                                                                                                      • General Mills edging closer to segment leader Kellogg’s
                                                                                                        • Figure 15: FDMx top brands and private label sales of cold cereal, 2009 and 2010
                                                                                                      • Cheerios is most popular brand in terms of consumption
                                                                                                        • Figure 16: Brands of cold cereal eaten in household, 2005-09
                                                                                                    • Innovation and Innovators—Brands vs. Private Label

                                                                                                      • Top claims for private label and name-brand cereal introductions
                                                                                                        • Figure 17: Trends in claims in non-PL cereal new product launches, 2005-10*
                                                                                                        • Figure 18: Trends in claims in PL cereal new product launches, 2005-10*
                                                                                                      • Hot cereal—branded
                                                                                                        • Hot cereal—private label
                                                                                                          • Cold cereal—branded
                                                                                                            • Cold cereal—private label
                                                                                                            • Advertising and Promotion

                                                                                                              • Social media emerging as marketing tool for cereal category
                                                                                                                • General Mills unveils retro boxes as part of marketing push
                                                                                                                • Store Brand vs. Name-brand Purchase

                                                                                                                  • Key points
                                                                                                                    • Incidence of purchase—store brand vs. name brand
                                                                                                                      • Figure 19: Purchase of store brand breakfast cereal in past month, hot vs. cold, by age, April 2010
                                                                                                                      • Figure 20: Purchase of store brand breakfast cereal in past month, hot vs. cold, by household income, April 2010
                                                                                                                      • Figure 21: Purchase of store brand breakfast cereal in past month, hot vs. cold, by presence and number of children, April 2010
                                                                                                                    • Purchase behavior—store brand vs. name brand
                                                                                                                      • Figure 22: Brand vs. store brand breakfast cereal purchase behavior, by age, April 2010
                                                                                                                      • Figure 23: Brand vs. store brand breakfast cereal purchase behavior, by household income, April 2010
                                                                                                                      • Figure 24: Brand vs. store brand breakfast cereal purchase behavior, by presence and number of children, April 2010
                                                                                                                    • Attitudes toward quality of store brand vs. name brand
                                                                                                                      • Figure 25: Attitudes toward quality of brand vs. store brand breakfast cereal, by age, April 2010
                                                                                                                      • Figure 26: Attitudes toward quality of brand vs. store brand breakfast cereal, by household income, April 2010
                                                                                                                      • Figure 27: Attitudes toward quality of brand vs. store brand breakfast cereal, by presence and number of children, April 2010
                                                                                                                  • Factors Influencing Breakfast Cereal Purchase

                                                                                                                    • Key points
                                                                                                                      • Impact of price on store brand purchase
                                                                                                                        • Figure 28: Impact of price on store brand breakfast cereal purchase, by gender, April 2010
                                                                                                                        • Figure 29: Impact of price on store brand breakfast cereal purchase, by age, April 2010
                                                                                                                        • Figure 30: Impact of price on store brand breakfast cereal purchase, by household income, April 2010
                                                                                                                        • Figure 31: Impact of price on store brand breakfast cereal purchase, by presence and number of children, April 2010
                                                                                                                        • Figure 32: Impact of price on store brand breakfast cereal purchase, by region, April 2010
                                                                                                                      • Factors influencing brand purchase by type of cereal bought
                                                                                                                        • Figure 33: Factors influencing brand purchase, by type of cereal bought, April 2010
                                                                                                                      • Impact of children on store brand breakfast cereal purchase
                                                                                                                        • Figure 34: Purchase of brand vs. store brand breakfast cereal for adults and/or children, by age, April 2010
                                                                                                                        • Figure 35: Purchase of brand vs. store brand breakfast cereal for adults and/or children, by number of children, April 2010
                                                                                                                    • Reasons For Not Buying Store Brand Breakfast Cereal

                                                                                                                      • Key points
                                                                                                                        • Age plays small role for non-buyers of private label cereal
                                                                                                                          • Figure 36: Reasons for not buying store brands of breakfast cereal, by age, April 2010
                                                                                                                          • Figure 37: Reasons for not buying store brands of breakfast cereal, by household income, April 2010
                                                                                                                          • Figure 38: Reasons for not buying store brands of breakfast cereal, by presence and number of children, April 2010
                                                                                                                          • Figure 39: Reasons for not buying store brands of breakfast cereal, by urban/rural status, April 2010
                                                                                                                      • Contentment with Cereal Brands, and Improvements Looked For

                                                                                                                        • Key points
                                                                                                                          • Interest in new cereal brands and role of retailer in store brand quality
                                                                                                                            • Figure 40: Interest in new cereal brands and role of retailer in store brand quality, by gender, April 2010
                                                                                                                            • Figure 41: Interest in new cereal brands and role of retailer in store brand quality, by age, April 2010
                                                                                                                            • Figure 42: Interest in new cereal brands and role of retailer in store brand quality, by number of people in household, April 2010
                                                                                                                            • Figure 43: Interest in new cereal brands and role of retailer in store brand quality, by presence and number of children, April 2010
                                                                                                                          • Improvements looked for in breakfast cereal
                                                                                                                            • Figure 44: Improvements looked for in breakfast cereal, by gender, April 2010
                                                                                                                            • Figure 45: Improvements looked for in breakfast cereal, by presence and number of children, April 2010
                                                                                                                            • Figure 46: Improvements looked for in breakfast cereal, by region, April 2010
                                                                                                                        • Impact of Race/Hispanic Origin

                                                                                                                          • Key points
                                                                                                                            • Store brand vs. name-brand purchase
                                                                                                                              • Figure 47: Purchase of store brand breakfast cereal in past month, hot vs. cold, by race/Hispanic origin, April 2010
                                                                                                                            • Purchase behavior—store brand vs. name brand
                                                                                                                              • Figure 48: Brand vs. store brand breakfast cereal purchase behavior, by race/Hispanic origin, April 2010
                                                                                                                            • Volume consumption of cold cereal by race/Hispanic origin
                                                                                                                              • Figure 49: Frequency of cold cereal consumption on weekly basis, by race/Hispanic origin, November 2008-December 2009
                                                                                                                            • Attitudes toward store brand vs. name brand
                                                                                                                              • Figure 50: Attitudes toward quality of brand vs. store brand breakfast cereal, by race/Hispanic origin, April 2010
                                                                                                                            • Factors influencing breakfast cereal purchase
                                                                                                                              • Figure 51: Impact of price on store brand breakfast cereal purchase, by race/Hispanic origin, April 2010
                                                                                                                              • Figure 52: Purchase of brand vs. store brand breakfast cereal for adults and/or children, by race/Hispanic origin, April 2010
                                                                                                                            • Reasons for not buying store brand breakfast cereal
                                                                                                                              • Figure 53: Reasons for not buying store brands of breakfast cereal, by race/Hispanic origin, April 2010
                                                                                                                            • Contentment with cereal brands, and improvements looked for
                                                                                                                              • Figure 54: Interest in new cereal brands and role of retailer in store brand quality, by race/Hispanic origin, April 2010
                                                                                                                            • Improvements looked for in breakfast cereal
                                                                                                                              • Figure 55: Improvements looked for in breakfast cereal, by race/Hispanic origin, April 2010
                                                                                                                            • Kids and teens
                                                                                                                              • Figure 56: Teen eating of hot/cold cereal brands and store brands, by race/Hispanic origin, November 2008-December 2009
                                                                                                                              • Figure 57: Kid eating of hot/cold cereal brands and store brands, by race/Hispanic origin, November 2008-December 2009
                                                                                                                          • Cluster Analysis

                                                                                                                              • Satisfactories
                                                                                                                                • Demographics
                                                                                                                                  • Characteristics
                                                                                                                                    • Opportunity
                                                                                                                                      • Sacrificers
                                                                                                                                        • Demographics
                                                                                                                                          • Characteristics
                                                                                                                                            • Opportunity
                                                                                                                                              • Privatizers
                                                                                                                                                • Demographics
                                                                                                                                                  • Characteristics
                                                                                                                                                    • Opportunity
                                                                                                                                                      • Cluster characteristics
                                                                                                                                                        • Figure 58: Private label cereal clusters, April 2010
                                                                                                                                                        • Figure 59: Brand vs. store brand breakfast cereal purchase behavior, by private label cereal clusters, April 2010
                                                                                                                                                        • Figure 60: Attitudes toward quality of brand vs. store brand breakfast cereal, by private label cereal clusters, April 2010
                                                                                                                                                        • Figure 61: Brand vs. store brand breakfast cereal purchase behavior, by private label cereal clusters, April 2010
                                                                                                                                                        • Figure 62: Impact of price on store brand breakfast cereal purchase, by private label cereal clusters, April 2010
                                                                                                                                                        • Figure 63: Interest in new cereal brands and role of retailer in store brand quality, by private label cereal clusters, April 2010
                                                                                                                                                      • Cluster demographics
                                                                                                                                                        • Figure 64: Private label cereal clusters, by gender, April 2010
                                                                                                                                                        • Figure 65: Private label cereal clusters, by age, April 2010
                                                                                                                                                        • Figure 66: Private label cereal clusters, by household income, April 2010
                                                                                                                                                        • Figure 67: Private label cereal clusters, by race, April 2010
                                                                                                                                                        • Figure 68: Private label cereal clusters, by Hispanic origin, April 2010
                                                                                                                                                      • Cluster methodology
                                                                                                                                                      • Custom Consumer Groups

                                                                                                                                                          • Store brand cereal usage by food lifestyle segmentations
                                                                                                                                                            • Figure 69: Household usage of hot/cold cereal brands and store brands, by food lifestyle segmentation, November 2008-December 2009
                                                                                                                                                          • Store brand cereal usage by health and shopping attitudes
                                                                                                                                                            • Figure 70: Household usage of hot/cold cereal brands and store brands, by attitudes toward health and shopping, November 2008-December 2009
                                                                                                                                                        • Appendix—Frequency of Hot Cereal Consumption

                                                                                                                                                          • A fifth of households are heavy hot cereal users
                                                                                                                                                            • Figure 71: Frequency of hot cereal consumption on weekly basis, by household income, November 2008-December 2009
                                                                                                                                                        • Appendix: Trade Associations

                                                                                                                                                          • Appendix: Food Lifestyle Segmentation System

                                                                                                                                                              • Convenience and Ease
                                                                                                                                                                • Reformed Traditionals
                                                                                                                                                                  • Variety on a Budget
                                                                                                                                                                    • True Foodies
                                                                                                                                                                      • Weekend Cooks

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      • American Association of Cereal Chemists (AACC)
                                                                                                                                                                      • American Institute of Food Distribution
                                                                                                                                                                      • Bob's Red Mill Natural Foods
                                                                                                                                                                      • Domino's Pizza LLB
                                                                                                                                                                      • Facebook, Inc.
                                                                                                                                                                      • Food Marketing Institute
                                                                                                                                                                      • General Mills Inc
                                                                                                                                                                      • Grocery Manufacturers of America (GMA)
                                                                                                                                                                      • Kellogg Company
                                                                                                                                                                      • Organic Trade Association
                                                                                                                                                                      • PepsiCo Inc
                                                                                                                                                                      • Private Label Manufacturers Association (PLMA)
                                                                                                                                                                      • Quaker
                                                                                                                                                                      • Ralcorp Holdings Inc.
                                                                                                                                                                      • Supervalu Inc
                                                                                                                                                                      • Trader Joe's Company Inc
                                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                                      • Walgreen Co
                                                                                                                                                                      • Walmart Stores (USA)
                                                                                                                                                                      • Weight Watchers International Inc.

                                                                                                                                                                      Private Label Cereal - US - July 2010

                                                                                                                                                                      £3,199.84 (Excl.Tax)