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Hot and Cold Cereal - US - October 2018

"The $10.4 billion cereal category continues to be plagued with struggles, largely an impact of falling cold cereal segment sales. Yet, the category still enjoys nearly universal participation, suggesting that any attrition is in consumption frequency or volume, not overall category participation. Frequency can be strengthened though, by accentuating the dichotomy and versatility of the category to demonstrate that a variety of cereals can be used across a number of occasions on a daily basis."
- Michael Averbook, Food & Drink Analyst

This Report looks at the following areas:

  • Hot cereal gains can’t offset cold struggles
  • Category penetration remains high while portions consumed drops
  • Everyday consumption is lacking
  • Consumers unreceptive to healthy initiatives 
  • Young adults, parents are the means to occasion expansion
  • Diverse category offers something for everyone, every mood 
  • Convenience of cereal outweighs any negatives for parents

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Hot cereal gains can’t offset cold struggles
            • Figure 1: Total US retail sales and forecast of hot and cold cereal, by segment, at current prices, 2013-23
          • Category penetration remains high while portions consumed drops
            • Figure 2: Breakfast cereals cold and hot – portions eaten in the last 7 days
          • Everyday consumption is lacking
            • Figure 3: Cereal consumption frequency – Any cereal, by myself or any other adults, August 2018
          • Consumers unreceptive to healthy initiatives
            • Figure 4: Cereal features interest, August 2018
          • The opportunities
            • Young adults, parents are the means to occasion expansion
              • Figure 5: Cereal behaviors, by age and parental status, August 2018
            • Diverse category offers something for everyone, every mood
              • Figure 6: Correspondence Analysis – Symmetrical map – Breakfast food associations, August 2018
            • Convenience of cereal outweighs any negatives for parents
              • Figure 7: Cereal attitudes, August 2018
            • What it means
            • The Market – What You Need to Know

              • Cereal sales plagued by cold segment
                • Hot cereal a bright spot
                  • Breakfast space continues to grow crowded
                    • Extending snacking
                      • Kids essential to success of cereal
                      • Market Size and Forecast

                        • Category on a consistent decline
                          • Figure 8: Total US retail sales and forecast of hot and cold cereal, at current prices, 2013-23
                          • Figure 9: Total US retail sales and forecast of hot and cold cereal, at current prices, 2013-23
                      • Market Breakdown

                        • Cold cereal woes overshadow hot cereal gains
                          • Figure 10: Total US market share of hot and cold cereal, by segment, at current prices, 2018
                          • Figure 11: Total US retail sales and forecast of hot and cold cereal, by segment, at current prices, 2013-23
                      • Market Perspective

                        • Breakfast space continues to get more crowded
                          • Figure 12: Breakfast foods consumed, by segmentation, April 2018
                        • Consumers look for fresh foods on store perimeter
                          • Figure 13: Grocery department associations – Healthy, authentic, fresh, tasty, time-saving, and a good value, October 2016
                        • Consumers cutting back on cereal
                          • Figure 14: Breakfast cereals cold and hot – Portions eaten in the last 7 days
                        • Protein lands high on list of important breakfast features
                          • Figure 15: Breakfast attributes, April 2018
                      • Market Factors

                        • The importance of snacking
                          • Figure 16: Snacking frequency, March 2017
                        • Sugar concerns for some
                          • Figure 17: Reasons for limiting sugar consumption, September 2016
                        • Households with children forecast to rebound
                          • Figure 18: Households, by presence of own children, 2007-17
                      • Key Players – What You Need to Know

                        • Big four dominate the category
                          • Despite sugar “revolt” sweetened cold cereals continue gains
                            • Hot cereals leverage all the right things
                              • Health positioning doesn’t resonate with cold cereals
                                • Trending overnight oats go commercial
                                • Company and Brand Sales of Hot and Cold Cereal

                                  • Category is top heavy
                                    • Kellogg sales slide
                                      • Figure 19: Special K TV advertisement: “Special K Powering You – Stomach Whirlwind”
                                      • Figure 20: Kashi online video: “Awesome Together”
                                    • General Mills maximizes indulgence for gains
                                      • PepsiCo rebound
                                        • Figure 21: Multi-outlet sales of hot and cold cereal, by leading companies, rolling 52 weeks 2017 and 2018
                                    • What’s Working?

                                      • Sweet sales for sugary cereals
                                        • Figure 22: Multi-outlet sales of cold cereal, by select heavily sweetened brands, rolling 52 weeks 2017 and 2018
                                        • Figure 23: Cinnamon Toast Crunch online video: “Fruit and Cinnamon Snack Mix”
                                        • Figure 24: Purchase intent of select new heavily sweetened cold cereal brands
                                      • Free-from claims boost inherently healthy reputation
                                        • Figure 25: Multi-outlet sales of hot cereal, rolling 52 weeks 2017 and 2018
                                        • Figure 26: Healthy and natural scores, by hot and cold cereal, January 2017-August 2018
                                        • Figure 27: Multi-outlet sales of hot cereal, by select brands with health-focused products, rolling 52 weeks 2017 and 2018
                                      • Packaging shifts up the convenience ante for hot cereals
                                        • Figure 28: Launches of hot cereal, by convenience claims, September 2015-August 2018
                                        • Figure 29: Multi-outlet sales of hot cereal, by select brands with convenience-focused products, rolling 52 weeks 2017 and 2018
                                    • What’s Struggling?

                                      • Lightly sweetened, BFY cold cereals
                                        • Figure 30: Multi-outlet sales of cold cereal, by select lightly sweetened and BFY brands, rolling 52 weeks 2017 and 2018
                                        • Figure 31: Multi-outlet sales of cold cereal, rolling 52 weeks 2017 and 2018
                                      • Value doesn’t boost private labels
                                          • Figure 32: Purchase intent of select private label hot and cold cereal brands
                                          • Figure 33: Multi-outlet sales of hot and cold cereal, by private label brands, rolling 52 weeks 2017 and 2018
                                      • What’s Next?

                                        • Overnight oats
                                          • Figure 34: Quaker online video: “How to Make Quaker Overnight Oats”
                                        • Premiumization of granola
                                          • Figure 35: Launches of granola, by small batch, gourmet, and handcrafted claims, September 2015-August 2018
                                      • The Consumer – What You Need to Know

                                        • Widespread consumption, ties to breakfast don’t lead to daily consumption
                                          • Frequency is disproportionate among cereal types
                                            • Retain presence in breakfast, capitalize on snacking
                                              • Cereal is a permissible treat
                                                • Duality of the category requires nuanced approaches
                                                • Cereal Consumption and Frequency

                                                  • Cereal remains a pantry staple
                                                    • Figure 36: Cereal consumption, August 2018
                                                    • Figure 37: Cereal household consumption, August 2018
                                                  • iGens especially engaged with cold cereal
                                                    • Figure 38: Cereal consumption, August 2018
                                                  • Parents, larger households have broader repertoires of cereals
                                                    • Figure 39: Cereal consumption, by parental status, August 2018
                                                    • Figure 40: Cereal consumption, by household size, August 2018
                                                  • Despite strong breakfast consumption, few consumers eat cereal daily
                                                    • Figure 41: Cereal consumption frequency – At least once a week, by myself or any other adults, August 2018
                                                    • Figure 42: Cereal consumption frequency – At least once a week, by children aged 17 or younger, August 2018
                                                • Changes in Cereal Consumption

                                                  • Cereal consumption frequency remains mostly unchanged
                                                    • Figure 43: Cereal consumption changes, August 2018
                                                  • Breakfast still a catalyst for growth
                                                      • Figure 44: Reasons for increased consumption, August 2018
                                                    • Parents increasing cereal engagement though snacking, dessert, and nostalgia
                                                      • Figure 45: Reasons for increased consumption, by parental status, August 2018
                                                    • Category attrition triggered by BFY options
                                                      • Figure 46: Reasons for decreased consumption, August 2018
                                                  • Cereal Behaviors

                                                    • Breakfast drives consumption
                                                      • Figure 47: Cereal behaviors, August 2018
                                                    • Younger adults, parents use cereals for broader range of occasions
                                                      • Figure 48: Cereal behaviors, by age and parental status, August 2018
                                                    • More than half of Hispanic consumers snack on cereal
                                                      • Figure 49: Cereal behaviors – Eat cereal as a snack, by race and Hispanic origin, August 2018
                                                  • Cereal Attitudes

                                                    • Consumers emphasize familiarity, taste in cereal choices
                                                      • Figure 50: Cereal attitudes, August 2018
                                                    • Experimental younger consumers are key targets for trial
                                                      • Figure 51: Cereal attitudes – Nostalgia and try new brands and flavors, by age, August 2018
                                                    • Convenience outweighs health concerns for most parents
                                                      • Figure 52: Cereal attitudes, August 2018
                                                  • Breakfast Food Associations

                                                    • Hot and cold cereal contrasts brings diverse strengths to category
                                                      • Figure 53: Correspondence analysis – Symmetrical map – Breakfast food associations, August 2018
                                                      • Figure 54: Breakfast food associations, August 2018
                                                    • Satiety, health of hot cereal stands out to older consumers
                                                      • Figure 55: Breakfast food associations – Hot cereal, nutritious, filling, and convenient, by age, August 2018
                                                    • Moms value taste and convenience of cold cereal
                                                      • Figure 56: Breakfast food associations – Hot cereal, nutritious and filling, by age, August 2018
                                                  • Cereal Features Interest

                                                    • Protein, low-sugar can encourage trial
                                                      • Figure 57: Cereal features interest, August 2018
                                                    • Mix of variety, healthy ingredients equal the strongest reach
                                                      • Figure 58: TURF analysis – Cereal features interest, August 2018
                                                    • Even those consumers eating cereal as a treat seek a balance
                                                      • Figure 59: Cereal attitudes – Healthy cereals and cereals as a treat, by cereal features interest, August 2018
                                                    • Mix of soft claims appeal more to younger consumers
                                                      • Figure 60: Cereal features interest, August 2018
                                                    • Parents interested in broader variety of features
                                                      • Figure 61: Cereal features interest, August 2018
                                                  • Appendix – Data Sources and Abbreviations

                                                    • Data sources
                                                      • Sales data
                                                        • Fan chart forecast
                                                          • Consumer survey data
                                                            • Consumer qualitative research
                                                              • TURF Methodology
                                                                • Abbreviations and terms
                                                                  • Abbreviations
                                                                    • Terms
                                                                    • Appendix – The Market

                                                                        • Figure 62: Total US retail sales and forecast of hot and cold cereal, at inflation-adjusted prices, 2013-23
                                                                        • Figure 63: Total US retail sales and forecast of hot and cold cereal, by segment, at current prices, 2013-23
                                                                        • Figure 64: Total US retail sales of hot and cold cereal, by segment, at current prices, 2016 and 2018
                                                                        • Figure 65: Total US retail sales and forecast of cold cereal, at current prices, 2013-23
                                                                        • Figure 66: Total US retail sales and forecast of cold cereal, at inflation-adjusted prices, 2013-23
                                                                        • Figure 67: Total US retail sales and forecast of hot cereal, at current prices, 2013-23
                                                                        • Figure 68: Total US retail sales and forecast of hot cereal, at inflation-adjusted prices, 2013-23
                                                                        • Figure 69: Total US retail sales of hot and cold cereal, by channel, at current prices, 2013-18
                                                                        • Figure 70: Total US retail sales of hot and cold cereal, by channel, at current prices, 2016 and 2018
                                                                        • Figure 71: US supermarket sales of hot and cold cereal, at current prices, 2013-18
                                                                        • Figure 72: US drugstore sales of hot and cold cereal, at current prices, 2013-18
                                                                        • Figure 73: US sales of hot and cold cereal through other retail channels, at current prices, 2013-18
                                                                    • Appendix – Key Players

                                                                        • Figure 74: Multi-outlet sales of cold cereal, by leading companies and brands, rolling 52 weeks 2017 and 2018
                                                                        • Figure 75: Multi-outlet sales of hot cereal, by leading companies and brands, rolling 52 weeks 2017 and 2018

                                                                    Hot and Cold Cereal - US - October 2018

                                                                    £3,435.47 (Excl.Tax)