Cold cereal that’s cool
Companies thinking outside the box,
With sales that have turned soggy, cereal makers are trying to salvage the breakfast bowl’s bruised reputation.
General Mills reported on Wednesday that cereal sales were down 1% for the year, contributing to the negative swing that has been a persistent, broader industry trend.
But the company has a game plan for growth. This month it launched its first new cereal brand in more than a decade.
General Mills isn’t alone. Cereal makers are trying to stay ahead of shopper preferences as crunchy flakes and puffs increasingly move from bowls to snack bar and other untraditional forms. They’re getting a boost from restaurants that have started experimenting with new uses for both cereal and sweetened milk with fine-dining interpretations. And now comes a new tactic, trying to make cereal chic, which Kellogg ’s is aiming for with an upscale cereal cafe that opens next week in Times Square.
The goal: Expand the appeal of cereal beyond breakfast.
These innovations come at a crucial time. Cereal sales have been soggy the past four years, falling 2.4% since 2012, according to Nielsen. As customers’ lives have gotten busier and more reliant on grab-and-go food, cereal has been squeezed out of morning routines.
Then came an eye-popping report earlier this year from research firm Mintel that seemed to spell doom for Cap’n Crunch and friends: Nearly 40% of Millennials said they thought cereal was inconvenient because it requires too much cleanup.
“It’s really a lifestyle shift that happened about 15 years ago when the mornings became just that much more hectic,” says Jim Murphy, president of General Mills’ cereal division. “You kind of slowly lose a bowl a week over a long period of time.”
Traditional cereals are competing against rising preferences for heartier foods such as oats, yogurt and eggs. But there are signs the dip in sales is leveling off. In the most recent 52-week period, sales were down 0.7%, compared to decreases between 1% and 4.3% in the previous three years, according to Nielsen.
Cereal is still in 90% of households, but companies know their boxes need a drastic overhaul to remain there. General Mills has been making gradual changes, including phasing out artificial colors and flavors and launching varieties of gluten-free Cheerios.
The company’s newest cereal, Tiny Toast, is meant to appeal to the late teen/early young adult set that has grown out of kid cereals but hasn’t quite gotten on the Fiber One bandwagon.
It is “made with real fruit” — a big selling point for Millennials — and comes in thick, bite-size pieces easy for snacking. That checks off another Millennial sticking point: More Millennials, (82%) than adults overall (75%) believe cereal is a great snack, according to Mintel.
Kellogg ’s will capitalize on this too. At its cafe, the company is banking on lip-smacking menu items such as Froot Loops paired with mini marshmallows and passion fruit jam to help cereal play an even bigger role later in the day. The cafe will sling bowls of Rice Krispies and Corn Pops well past breakfast time, staying open from 7 a.m. to 11 p.m.
“Thirty percent of cereal is consumed outside of breakfast, so we do certainly see that as an opportunity,” says Noel Geoffroy, senior vice president of marketing and innovation for U.S. morning foods at Kellogg ’s.
Kellogg ’s has tried this before. In 2014, the company opened a week-long pop-up bar in New York to tout its cereals as good sources of grains and proteins. The new cafe is a permanent installation of that experiment, with a bigger emphasis on seasonal recipes and unexpected flavors — Special K will be served with Frosted Flakes, pistachios, lemon zest and thyme; Rice Krispies get a kick from green tea powder and fresh strawberries. Customers can choose between whole milk, skim milk, soy milk, plain yogurt and soft serve ice cream as a pairing.