Cereal Manufacturers Desperate to Boost Sales

Cereal Aisle

Whether it’s awareness that there are healthier options, the cost, or the need to eat something on the go, Americans are turning away from breakfast cereal, and that’s got cereal manufacturers seeking fresh innovation to bring consumers back to their bowls and the breakfast table.

While some manufacturers are increasing the protein content of their products, General Mills is offering “loaded” versions of such mainstays as Cinnamon Toast Crunch, Cocoa Puffs, and Trix (enhanced with vanilla crème) paired with such purchase options as a metallic gold crown-shaped bowl, plush robe, and a 2-in-1 jade roller and spoon as part of a Get Rich With Me promotion, the company said.

In its second quarter earnings statement released in December, General Mills acknowledged net sales were down 2% despite the rise in consumer prices.

“Diets richer in protein and lower sugar have become more popular and the vast majority of cereal options don’t provide what consumers are looking for,” Braden Douglas of Crew Marketing told The Food Institute. “There are far more breakfast options today than there were 10 years ago, meaning there’s more competition for the breakfast day part biting into revenue.”

Registered dietitian Blanca Garcia had similar sentiments, noting:

“Parents are seeking healthier breakfast options and opting out of buying cereals.”

“Nowadays, parents have access to knowledge through their doctors, the WIC [Women, Infants and Children] program, and schools like Head Start that provide access to a registered dietitian, and of course, Dr. Google,” Garcia added, also noting there has been a steady rise in obesity in U.S. children.

“While consulting with parents, I often get asked which are the healthier cereals. Parents are now less likely to buy cereals based on their kids’ preferences for a colorful character on the box or sweetened cereals. Cereal manufacturers should start to target parents and their search for healthier options.”

Inflation Pinched Cereal Across the Board

Another key factor in sluggish cereal sales: inflation hit cereals hard. The Consumer Price Index put cereal prices up more than 14% last year.

A search for prices on the Albertson’s-owned Jewel-Osco website showed the cost of an 18-oz. box of Cocoa Puffs at $8.99 while a 13-oz. box of the loaded variety cost $8.49. An 18-oz. box of plain Cheerios was listed at $8.99.

Another part of the equation is time: with more people working from home, consumers have more time to prepare a balanced breakfast, while those pressed for time want something they can consume during a commute.

“Consumer behavior has been changing. Working and busy families are choosing more on-the-go products that are far easier to eat while moving than cereal,” Douglas said.

So, General Mills is turning to new products and advertising that doesn’t box in its products as just for breakfast, but as a go-to snack any time of the day.

Meanwhile, Cheerios is offering a Veggie Blend line. Reese’s is going for peanut butter puffs – no chocolate. Chocolate lovers can also try Cocoa Puffs Soft Baked Oat Bars as cereal manufacturers’ innovation ramps up while traditional cereal sales dip.