Cereal Sales Continued to Decline From $8.5 Billion Peak in 2011

BOSTON, MA--(Marketwired - Apr 19, 2016) - Ready-to-eat (RTE) breakfast cereals are seeing a continued and accelerating decline in sales, indicating a secular downtrend rather than a mere blip, as consumer eating habits continue to evolve, according to Lux Research.

The rate of growth of cereals began to slide in 2007, and the market has been shrinking overall since a 2011 peak of $8.5 billion, as a younger population embraces other alternatives. In 2014, when sales of breakfast cereals dropped for the fourth year in a row, yogurt sales exceeded $7 billion and snack bars topped $5.5 billion, revealing a generational shift.

"The need for greater convenience, changing social mores, and an increasingly mobile workforce are changing the definition of breakfast," said Joice Pranata, Lux Research Associate and lead author of the report titled, "Cereal Loses Crunch as Breakfast Alternatives Take Over."

"With the drive toward 'natural' and 'healthy' choices, there's also greater opportunity for experimentation with new breakfast alternatives," she added.

Lux Research analysts studied emerging breakfast alternatives as cereals continue their steady decline. Among their findings:

• Demographic shifts causing market upheaval. Fundamental demographic shifts are part of changes in consumer choices. Declining birth rates and later marriages in western economies have eroded the base of the population pyramid. However, half of the consumers in the 2-11 age group have shifted away from traditional breakfast cereals.
  
  
• Over 7,000 snack bars in market. The sheer number snack bars on the market reflects the scale of the competition traditional cereal makers face. Cereal bars, fruit bars, granola or muesli bars, and energy and nutrition bars offer numerous choices to consumers. Sales of these bars have more than tripled from $1.8 billion in 2003 to over $5.5 billion in 2014.
  
  
• Yogurt sales are spurred by health concerns. Yogurt consumption in the U.S. has soared over the past decade, rising at an average of 6.1% annually from 2004 to 2015. Yogurt's rise is driven by the nutritional platform it offers - as a source of protein and as a probiotic, with the ability to deliver other health functionalities such as vitamin K2 and omega-3 fatty acids.
  
  

The report, titled "Cereal Loses Crunch as Breakfast Alternatives Take Over," is part of the Lux Research Food and Nutrition Intelligence service.

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