The end of cereal
Greek yogurt. Eggs. Fruit instead of Fruit Loops. How our new morning habits are shaking up the business of breakfast.
About a year ago, Carrie Havranek decided to stop feeding her twin boys cold breakfast cereal.
“I noticed they were requiring two bowls in order to feel full,” said Havranek, who lives in Easton, Pa., just north of Philadelphia. With her now- sevenyear-old boys sometimes complaining of hunger soon after they ate, she realized “cereal just wasn’t cutting it anymore.”
“I was mostly concerned about them eating too many refined sugars and not getting enough of a nutritional balance to last them through until lunch.”
Havranek began making eggs more often — “they’re faster to make in the morning than you might realize” — as well as quick meals with more protein, healthy fat and fibre to promote satiety: sprouted grain English muffins with peanut butter or Greek yogurt with oats and fruit.
“We aren’t totally weaned off cereal, but we definitely eat a lot less of it as a result of this experiment,” said Havranek, who chronicled her efforts in a blog post last spring.
Similar scenes have been playing out across Canada and the United States for several years now, and the cereal industry has been feeling the pain.
Canadian sales of cold or “ready to eat” cereal, long an enduring breakfast staple, served with milk, declined 17.9 per cent between 2010 and 2015, and are projected to fall another 8.6 per cent by 2020, according to Euromonitor International. The market research firm has predicted sales will fall to US$934.9 million in 2015 from US$1.23-billion in 2012.
Big cereal makers such as General Mills and Kellogg, facing growing consumer concerns about artificial colours and ingredients in sugary processed foods, have promised to eliminate them from their products and find natural ways to recreate the bright turquoises and electric yellows of classic rainbow-hued cereals such as Lucky Charms.
“With our consumers, it reached a tipping point in the last couple of years with the trend toward simpler food,” Jim Murphy, president of the cereal division at General Mills, wrote in a widely circulated company blog post last June.
“I remember the meeting where we all looked at each other and said, ‘ We’re just done with these, we’re going to do the whole line’ ( of cereals),” Murphy wrote in the blog post.
But in trying to craft more natural versions of products that a growing number of nutritionally savvy consumers are shunning, the foods giants could be missing the point.
People simply aren’t eating breakfast they way they used to, industry watchers have observed. Adults and kids alike are more likely to grab portable food, such as a smoothie or a breakfast bar, to eat on the way to school or work than they are to sit down with a bowl of cereal. When there is time to eat at home, more people are reaching for nutritionally dense foods — think eggs, whole grains and Greek yogurt.
It’s a move that’s reverberating through the economy as food manufacturers, restaurants and grocers move quickly to adapt to Canadians’ desire for more convenient but healthy foods to start the day.
“There are a lot of reasons for ( the cereal) decline,” said Frank Jiang, Canadian research analyst at Euromonitor, which has consulted with industry suppliers, manufacturers, distributors and retailers about the trend, as well as consumer surveys.
“The younger generation feels time- starved, so they will favour on- the- go items like breakfast sandwiches and wraps over breakfast cereal. And overall there is a health and wellness culture grow- ing in the consumer purchase journey,” Jiang said, one that favours natural and whole ingredients over artificial ones and preservatives.
As a result, he said, packaged foods companies are now trumpeting so- called “absence claims,” advertisi ng i ngredients that their products do not contain — artificial colours, flavours, or added sugars — while simultaneously touting any healthy ingredients.
“It’s about getting rid of the bad stuff, and having more of the good stuff in there, and a key theme is a ‘ clean’ label,” Jiang said, with simple ingredients that people can identify. “They want more of the super- foods, organic sources, ancient grains. These are two sides of the same story.”
Fiona Birch, founder of the Toronto- based digital and social media marketing agency Tonic Global, said average c onsumers are f ar more knowledgeable t han t hey used to be about artificial ingredients.
“It’s years of being told by Dr. Oz to eat breakfast and eat clean, and to avoid processed foods and sugar. People are educated now to look at what the very first ingredient is on a label.”
Canada’s shifting demographics also plays a role in declining cereal sales, said Sylvain Charlebois, a professor in food distribution and policy at the University of Guelph, with many new Canadians c oming f r om countries and traditions that do not eat cold cereal in the morning.
“Demographics are a significant factor when it comes to the breakfast segment,” Charlebois said. “You have a generation changing their consumer habits, you have multiculturalism in play, and you have our lifestyle, which is much different than it was 30 years ago — cereal with milk is not very portable.”
At the same time, sales of breakfast foods viewed as “real” and healthy have surged, Jiang said, and protein- rich breakfast food is on the rise.
Yogurt is the fastest growing in- home food item being consumed by Canadians, which has been the case for each year in the five years up to 2014, said Robert Carter, executive director at market research firm NPD Canada.
“That is because of Greek yogurt and its whole protein play,” he said. According to NPD, the household penetration of Greek yogurt rose to 29 per cent in 2014 from nine per cent in 2011.
It has been a meteoric rise for the protein- and calciumrich dairy product, which accounted for less than one per cent of the U. S. yogurt market in 2007 and now takes in more than half of all dollar sales in the category, according to Food Navigator.
Big cereal makers have taken notice. Much like the carbonated drink giants who have diversified into coffee, water and juice to balance out declining sales of soda pop, cereal companies have been trying to reclaim their morning glory in ways that go beyond simply making healthy improvements to classic cereals.
Greek yogurt is an ingredient in a number of breakfast bars from Kellogg and General Mills, and in the U.S ., Quaker Oats has added a new protein category to its lineup of granola bar staples, as well as a new single- serve cereal- aisle product: a cup of cereal with dried yogurt that becomes creamy when milk is added.
The big food companies are also jumping on the to- go bandwagon. Kellogg introduced a line of frozen breakfast sandwiches in 2013, as did Nestlé SA, with its Bistro line. General Mills and Kellogg have both debuted snack bars with added protein.
The confluence of trends has allowed good old- fashioned eggs—easy, inexpensive and now regarded again as a healthy dietary choice after decades of being wrongly associated with high cholesterol — to reclaim the throne of the ideal breakfast food.
“People are learning that eggs are fantastic and so nutritious and they are really filling,” said Sarah Remmer, a registered dietitian based in Calgary, who has three children under the age of five.
“That is what people are looking for — filling, nutritious food with more fat and more protein,” Remmer said. “Fat is satiating and protein is satiating and eggs have both.”
She, too, rarely feeds her children cold cereal.
“Cereal is seemingly convenient, but it doesn’t keep kids full for very long. The fibre content isn’t great and there isn’t a lot of protein or fat.”
As anti- obesity advocates pr each the importance of protein in the morning meal for satiety, blood sugar stability and energy, egg consumption is on the rise, reflected as every big food- service establishment across Canada has added eggs to its morning menu.
“People are time- pressed at breakfast time, so they are looking for a quick conven- ient solution and they are going to restaurants more often, because it is so much more convenient to go through the drive- through,” market researcher Carter said.
“Breakfast sandwich sales growth has just been phenomenal — in wraps, burritos and sandwiches,” he added. Breakfast sandwich sales in Canada rose by 60 million sandwiches to 482 million for the year ending August 2015, according to NPD. That’s up from 360 million sold in 2011, and NPD expects breakfast sandwich sales to surpass the half-billion mark this year.
“It’s the protein, it’s a convenience factor — you are already going through to get coffee,” Carter said, adding people have been told repeatedly that eating breakfast is i mportant for overall health.
“Canadians consume over three billion cups of coffee annually ( at quickservice restaurants), so adding on a breakfast sandwich is a very simple way to grab breakfast.”
Restaurants have been getting into the morning meal trend.
Beyond McDonald’s, whose launch of all- day breakfast in the U. S. this year was due in part to high demand for the enduring popularity of its Egg McMuffin sandwich, Starbucks and Tim Hortons have expanded their range of protein- rich morning offerings, including English muffin, bagel and wrap sandwiches with eggs and sausage. Breakfast is the fastest- growing business in food service, Carter said.
That could be because breakfast t rends and t he movement to eating fresher foods are migrating into all parts of the day, according to Charlebois.
“We talk about the breakfast segment but I’m not so sure that breakfast exists anymore — people can eat breakfast from one in the morning until noon,” he said. “And you are seeing more and more restaurants offering all- day breakfast.”
The broader consumer shift towards eating “real” fresh food has been tracked by grocery retailers for years as more and more people avoid the salt, sugar and preservative- laden goods in the centre aisles of grocery stores.
“As such, it will have a great impact on store design in the future,” Charlebois said, citing Loblaw Cos. Ltd.’ s move to put fresh food into some Shoppers Drug Mart stores. “Grocers will have to figure out a way to repurpose the centre of the store.”
It’s a shift embraced by Loblaw, whose executive chairman, Galen Weston, has said the retailer is responding to consumers’ desire for fresh food and readyto- go meals.
“There are c at e gori e s where the consumers are changing behaviour, not because the promotional environment has changed, but we believe because their shopping habits are changing,” he told a conference call with shareholders in May.
“A number of those sort of the big traditional categories in the centre of the store, customers are shifting away from, and where are they going? They’re going to fresh, and we don’t see that shifting back in any meaningful way at this point.”
As to cereal makers’ efforts to try to recoup sales by making their classic products healthier, Remmer is not so sure the changes will necessarily help.
“It’s a step in the right direction, but I don’t think it is going to render the food that much better,” she said. “It’s off the mark. People are more interested now in whole foods — that’s what’s trendy right now, and that’s fantastic.”
The younger generation feels time-starved, so they will favour on-the-go items like breakfast sandwiches and wraps over breakfast cereal. And overall there is a health and wellness culture growing.
— Frank Jiang, analyst at Euromonitor