10 Big Ideas

10 big ideas in… Cereal

Everything you need to know about the breakfast table right now.

20 June 2019
breakfastchildrenfood-to-gogut healthNPDsnackingsupermarkets

The cereal category has faced challenging times over the past few years, with take-home sales down and volume sales remaining stagnant, according to Kantar Worldpanel. But consumer behaviour suggests there is still opportunity in the breakfast to-go and convenience market, as we’re hungry for a cereal that will satisfy us for breakfast, as a snack and sometimes even for dinner too.

Here are the 10 big ideas in cereal right now, including what’s currently shaping the category and what might be around the corner.

1. On-the-go

Breakfast is the most mobile meal, but no brand has fully cracked an on-the-go solution. Breakfast drinks appeared to be the answer two or three years ago, but they’re now in decline. Instead, breakfast pots are popular, with on-pack nutritional traffic lights helping time-pressed consumers make quick decisions. Nestlé launched all-in-one solution Breakfast-To-Go pots in August 2018, while Kellogg’s Joyböl is a portable, just-add-water smoothie bowl with 10g of protein. Around 40% of the UK’s out-of-home breakfasts were consumed by 16- to 34-year olds (Kantar Worldpanel 2018), so the at-work ‘deskfast’ remains a significant prize to be won.

2. Expect the unexpected

Cereal brands are differentiating themselves by putting savoury ingredients and non-traditional grains in our cereal bowls. Kellogg’s launched its first vegetable cereal in January 2019, with a no-added-sugar carrot granola, and Blueberry Cheerios launched in April 2019 as a colourful, gluten-free upgrade on traditional Cheerios that turns the milk blue. General Mills are looking more long term by investing in unexpected ingredients: they have been working on utilising kernza, a wheatgrass that stores carbon as it grows and is a drought-resistant, perennial alternative to wheat. It’s been hampered by failed crops and is yet to launch commercially, but the project points to cereal manufacturers investing in alternative grains for the future.

3. Hold the milk

Adverts might glorify cold milk splashing over crisp cornflakes, but that’s not really how we eat it. Not anymore. A survey from The Grocer revealed that 85% of children and 60% of adults ate their cereal dry at least some of the time, and one in five children take it to school as a dry snack. There’s big potential for cereal brands embracing this grab-and-go approach, which is part of our wider obsession with snacking. In the US, Bear Naked created large granola clusters specifically for snacking and Cheerios launched a limited-edition Snack Mix with Shreddies, Cheerios and spiced pretzels. In the UK, snacking variations are more limited to bars or pots, and there is potential innovation in the dry cereal space.

4. Functional sweeteners

Sugar is a naughty word in the cereal aisle, so the next generation of health-conscious cereals includes natural sweeteners with nutritional benefits. Sweet ingredients must work twice as hard to make it into the box: concentrated fruit juices bring colour and natural sweetness; Troo Granola features prebiotic, high-fibre inulin; and Bear Alphabites kids cereal uses low-GI, calcium-rich coconut blossom nectar as a more virtuous alternative to processed sugar. We will see more diverse responses to the sugar problem arising, as brands innovate to develop sweet solutions without the hang-ups.

5. Next-level vegan

Own-label and branded cereals are both wooing the vegan market with plant-based products, but we’re yet to see a cereal that’s developed with alternative milk’s taste and nutritional content specifically in mind. PG Tips released a tea brewed for alternative milks in February 2018, which suggests there is flex in the market for this kind of product. Mintel estimated the vegan food market’s value at £740m in 2018, and it’s predicted to reach £1.1bn by 2023. Cereals might be fortified with vitamin B12 for plant-based consumers, but as the vegan food market continues to grow, consumers are looking for more sophisticated solutions.

6. Gut health

Whilst the government works to boost our fibre intake to 30g a day, cardboard-in-a-bowl breakfast cereals like All-Bran and Shredded Wheat have suffered significant sales drops. Mintel named digestive wellness as one of its core global consumer trends for the next three years, and Kellogg’s have rebranded All-Bran as part of its Happy Gut range to target this trend. Others are responding with a contemporary approach to gut-focused products, like Alpen’s Light Bars for high-fibre snacking, or Biotiful Dairy’s Kefir Quark as a high-protein yoghurt alternative. High-amylose wheat flour is also a promising new ingredient; as well as being good for your gut, it limits blood sugar levels spiking and can lower cholesterol. Breakfast is the most virtuous meal of the day, and the cereal brand that makes gut health appetising to modern palates is onto a winner.

7. Doing it for the kids

We’re demanding healthier cereals for our children, with less sugar, more ethical advertising and without the plastic toys. These trends are especially significant when children’s cereals dominate the category. Weetabix alone accounts for 11% of UK cereal sales (AC Nielsen 2018), and busy parents tend to stick to what their kids will eat. American cereal brand Kashi tried to engage kids further by creating cereals with five Gen Z influencers: Kashi by Kids includes healthier ingredients like chickpeas and red lentils in Honey Cinnamon or Cocoa Crisp flavours. The challenge for children’s cereal brands now is to reach health targets, whilst still appealing to the kids market.

8. Think positive

Future-facing cereal brands focus on the ingredients their product contains, rather than what they don’t. Low-fat or low-calorie claims are less convincing than added superfoods, an energy boost, organic or natural sugars. (Gluten-free and sugar-free are the main exceptions, as these ingredients are on consumers’ watch list.) However, health claims can’t do it all: a poll from The Grocer found that taste was most important when it came to purchasing cereals (79%), compared to healthy ingredients (43%) and low price (37%). Special K has moved away from the lady in the red swimsuit and its slimming messaging to create more of a lifestyle brand, and we expect to see more breakfast brands follow this move.

9. Midnight snacks

Cereal occupies an enviably liminal space in our eating routines; there aren’t many foods which so easily satisfy a breakfast, dinner or midnight snack craving. Weetabix captured this with their ‘Any-Which-Way-A-Bix’ campaign, celebrating the idiosyncrasies of how and when we eat our favourite cereal. Because of its historic association with health, cereal is generally seen as a more virtuous snack than bagged crisps or biscuits. A recent article in Stylist magazine revealed how many successful women happily eat cereal for dinner, as they don’t have the time or inclination to cook. Nightfood’s ‘sleep friendly’ ice cream has paved the way (and the Instagram hashtags) for sleep-targeted food, and there is significant opportunity for night-time cereal in the convenience and health markets.

10. Packaging

Fuelled by the anti-plastic consumer movement, cereals are innovating to develop smaller pack sizes and more convenient, ecological packaging. Consumers want to eat their cereal wherever and whenever they want, but single-use plastics are increasingly problematic for grab-and-go breakfast pots, bars and drinks, especially in high-end sectors. General Mills has set its ambition for 100% of packaging to be recyclable by 2030, organic brands are innovating with compostable packing using NatureFlex or Tipa bio-based film, and most recently Waitrose’s completely plastic-free store in Oxford had a range of cereals for refills. Sustainability is no longer a ‘nice to have,’ but a necessity.

Where next?

Cereal is one of the UK’s fastest growing exports, so as consumer tastes change in the UK, cereal brands should keep an eye on international markets too. Convenience is always king, but health, plant-based proteins and improved design will continue to be big ideas in the breakfast category this year, as well as cereals promising improved digestion, sleep or energy boosts appearing on the table too.

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