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Big brands hope the sweet taste of nostalgia can boost sagging sales

Tim Nelson
April 09, 2018

Cereal sales are in the midst of a prolonged slump. Increased competition from lower-carbohydrate, higher-protein alternatives like Greek yogurt have contributed to an 11% slide over the past five years, with attempts to target these health-conscious eaters through breakfast grains not quite hitting the mark.

But if consumer trends for both new and existing products are any indication, the recipe for cereal success at Kellogg, General Mills, et al. hinges on embracing breakfast cereal’s sugary roots.

There’s a growing consensus that consumers of all ages who reach for cereal are less concerned with carb content than fun colors and a sugar rush. Market research from Mintel shows that 43% of adults admit to eating cereal as a snack at home, and a full 30% of them choose taste over any nutritional consideration. That might explain why sales of cereals marketed to kids fell 1% in 2017, compared to a 7% decrease for adult cereals that touted their health credentials.

Simply put, “taste is king,” as General Mills president of cereal (talk about a sweet job title) Dana McNabb told The Wall Street Journal. That realization has led McNabb and her team to push out indulgent offerings like Lucky Charms Frosted Flakes and Chocolate Peanut Butter Cheerios, the latter of which the Minneapolis-based cereal company heavily credits with boosting company-wide sales last year after its early Q4 launch.

Contrast that to what happened with Trix, which General Mills decided to relaunch in its original, artificially colored and flavored form after a healthier, all-natural take on the cartoonish classic inspired a consumer rebellion. “Trix is the best example of what happens when you do something the consumer doesn’t like,” Said McNabb, “they let us know.”

So how is this crop of health-unconscious cereal mounting a comeback in an world that’s otherwise ready to move on from processed food? The answer may have a lot to do with a shift in consumer perception that sees cereal not as part of a balanced breakfast, but as a guilty pleasure.

“Cereal is processed. It’s carbs. It’s not so healthy for breakfast, but it’s a permissible indulgence that seems not as bad as eating a traditional dessert,” said Mintel senior food analyst John Owen. That might explain why the rise of cereal cafes has coincided with the proliferation of other specialty (and highly Instagrammable) dessert offerings.

With big cereal companies focused on acquiring smaller brands in order to reach health-conscious consumers, expect them to further sweeten their offerings to keep pace with demand. To that end, Post is set to relaunch Oreo O’s for the first time since 2007, and Kellogg has swapped out low-sugar Frosted Flakes in favor of chocolate and cinnamon flavor profiles.

Of course, it’s possible that no amount of pandering to our basest tastes or feelings of nostalgia will bring cereal sales back to full profitability. But at least the next time you reach for Fruity Pebbles over Fiber One, you can take refuge in knowing that you’re far from alone in doing so.

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