Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources and methodology
- Sales data
- Consumer survey data
- Advertising clips
- Abbreviations
- Terms
Executive Summary
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- Well-established market leaves little room for growth
- Competition for the food dollar
- Market drivers mostly positive
- Cold cereal controls market
- Supermarkets command majority of sales
- Kellogg and General Mills battle for top spot
- Brand focus: Kellogg’s Special K—the diet-friendly cereal
- Innovation driven by attitudes toward health, convenience and flavor
- Advertising and promotion of cereals
- The breakfast cereal consumer
- Frequency of usage
- Cereal for breakfast, lunch, dinner, and snacks
- Most important attributes: Taste, price, whole grains, familiar flavor, fiber, and sugar
- Reasons for eating cereal: Convenience, health, and value
- Attitudes toward price
- Attitudes towards trial and brand
- Kids’ and teens’ use of cereal
- Custom consumer groups: Moms and dads
Insights and Opportunities
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- Continued efforts to break out of the breakfast daypart
- Special K leads the way
- A focus on “enhancing” breakfast cereal
- Promoting customization
- Talking to married couples without children
Inspire Insights
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- An Inconvenient Fruit
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- Figure 1: Preference for local food, by household income, June 2009
- Mood from Food
- Purity
- Nostalgia
Market Size and Forecast
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- Growth difficult in saturated market
- Increasing usage per eater
- Raising prices
- Sales and forecast of market
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- Figure 2: Total U.S. breakfast cereal sales and forecast, at current prices, 2004-14
- Figure 3: Total U.S. breakfast cereal sales and forecast, at inflation-adjusted prices, 2004-14
Competitive Context
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- Myriad choices available
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- Figure 4: Types of breakfast foods eaten, February 2008-March 2009
- Convenience of cereal bars
- Nutritional content of yogurt
- The special treat
- Price sensitivity creates internal competition
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- Figure 5: Breakfast cereal purchase behavior, June 2009
- The foodservice battle for breakfast
Segment Performance
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- Overview
- Cold cereal dominates and provides growth
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- Figure 6: FDMx sales of breakfast cereal, by type and sugar content, 2007 and 2009
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- Figure 7: FDMx sales of breakfast cereal, segmented by type, 2004-09
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- Figure 8: Total U.S. sales and forecast of breakfast cereal at current prices, by segment, 2004-14
Segment Performance—Cold Cereal
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- Key points
- Medium-high sugar cereals successful by striking a balance for consumers
- Ramping up health perceptions
- Sales and forecast of cold cereal
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- Figure 9: Total U.S. sales and forecast of cold cereal, 2004-14
- Cold cereal sales by sugar content
- Low sugar cold cereal
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- Figure 10: FDMx sales and forecast of low sugar cold cereal, 2004-14
- Medium sugar cold cereal
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- Figure 11: FDMx sales and forecast of medium sugar cold cereal, 2004-14
- Medium-high sugar cold cereal
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- Figure 12: FDMx sales and forecast of medium-high sugar cold cereal, 2004-14
- High sugar cold cereal
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- Figure 13: FDMx sales and forecast of high sugar cold cereal, 2004-14
Segment Performance—Hot Cereal
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- Key points
- Trade down trend hurting segment performance
- Competition squeezing out hot cereals
- Sales and forecast of hot cereal
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- Figure 14: Total U.S. sales and forecast of hot cereal, 2004-14
Retail Channels
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- Key points
- Cereal is a supermarket staple
- Mass merchandiser/other growth rates very strong
- Sales of market, by channel
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- Figure 15: Total U.S. sales of breakfast cereal, by retail channel, 2007 and 2009
Retail Channels—Supermarket/Food Stores
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- Key points
- Supermarkets faced with challenges—implementing changes
- Supermarkets aggressive in promoting private label programs
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- Figure 16: Total U.S. sales of breakfast cereal at supermarkets/food stores, 2004-09
Retail Channels—Mass Merchandiser, Drug and Other
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- Key points
- Target hits the bull’s eye with tiered private label brands
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- Figure 17: Total U.S. sales of breakfast cereal at mass and other, 2004-09
Natural Channel Sales
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- Figure 18: Natural product supermarket retail sales of breakfast cereal, at current prices, 2007-09
- Figure 19: Natural product supermarket retail sales of breakfast cereal, at inflation adjusted prices, three years ending July 11, 2009*
- Implications
- Natural channel sales by segment
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- Figure 20: Natural product supermarket retail sales of breakfast cereal, by segment, 2007-09
- Brand sales
- Nature’s Path and Weetabix’s Barbara’s surge
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- Figure 21: Manufacturer brand natural supermarket sales of breakfast cereal*, 2007 and 2009
- Natural channel sales of organic cereal
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- Figure 22: Natural product supermarket retail sales of breakfast cereal*, by organic/non-organic, 2007-09
- Natural channel sales of gluten-free breakfast cereal
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- Figure 23: Natural product supermarket retail sales of breakfast cereals, by gluten-free, 2007-09
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Market Drivers
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- Higher prices
- Recession is good for cereal sales
- Perception of health benefits drives routine usage among adults
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- Figure 24: Routine use of cereal for breakfast, July 2009
- Figure 25: Reasons to eat cereal, routine users vs. non-routine users, July 2009
- Not skipping breakfast—“the most important meal of the day”
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- Figure 26: Kellogg’s Frosted Mini Wheats, More than just coffee, June 2009
- Population growth insufficient to drive meaningful gains
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- Figure 27: Population by age, focus on kids, 2009-14
- Long commutes and traffic delays
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- Figure 28: Average commuting times in select major U.S. cities, October 2006
- Making the commute earlier—impacting breakfast plans
- One in seven too busy for cereal
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- Figure 29: Factors impacting breakfast habits, by gender, June 2009
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- Figure 30: Factors impacting breakfast habits, by age, June 2009
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- Figure 31: Factors impacting breakfast habits, by presence of children, June 2009
Leading Companies
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- Brand leaders raise prices, decrease package sizes
- Private label sales flourish
- Company sales
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- Figure 32: FDMx sales of leading breakfast cereal companies, 2008 and 2009
Selected Brand Analysis—Low Sugar Cold Cereal
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- Key points
- Cheerios and Rice Krispies—classic kid brands dominate sales
- General Mills’ Fiber One gains while other fiber-rich cereals plummet
- Manufacturer and brand sales of low sugar cold cereal
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- Figure 33: Selected FDMx brand sales of low sugar cold cereal in the U.S., 2008 and 2009
Selected Brand Analysis—Medium Sugar Cold Cereal
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- Key points
- Kellogg’s Special K dominates via adult focus and flavor diversity
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- Figure 34: FDMx brand sales of medium sugar cold cereal in the U.S., 2008 and 2009
Selected Brand Analysis—Medium-high Sugar Cold Cereal
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- Key points
- General Mills’ MultiGrain Cheerios “healthy enough”
- Post Just Bunches brand off to a good start
- Manufacturer and brand sales of medium-high sugar cold cereal
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- Figure 35: FDMx brand sales of medium-high sugar cold cereal in the U.S., 2008 and 2009
Selected Brand Analysis—High Sugar Cold Cereal
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- Key points
- Kellogg’s gives kid-centric brands a healthier makeover
- General Mills focused on fun
- Manufacturer and brand sales of high sugar cold cereal
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- Figure 36: FDMx brand sales of high sugar cold cereal in the U.S., 2008 and 2009
Selected Brand Analysis—Hot Cereal
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- Key points
- Private label hot cereal stealing market share
- Manufacturer and brand sales of hot cereal
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- Figure 37: FDMx brand sales of hot cereal in the U.S., 2008 and 2009
Brand Qualities Case Study: Kellogg’s Special K
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- Alignment as a diet-friendly cereal
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- Figure 38: FDMx brand sales of leading diet* cereals in the U.S., 2008 and 2009
- Connecting with women
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- Figure 39: Special K Challenge, Bikini vs. You, May 2009
- Extending the brand
Innovation and Innovators
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- Health and wellness
- Convenience
- Flavor and fun
- Focused on fun
- Leading new product claims
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- Figure 40: Top 10 cereal product launches by product claim and year, 2004-09
Advertising and Promotion
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- Recession fuels need for more advertising to stave off private label
- Ad spend remains flat
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- Figure 41: Top cereal advertisers*, 2007 and 2008
- The traditional route: Targeting kids with cartoon fun
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- Figure 42: General Mills Cereals, Measuring Up, August 2008
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- Figure 43: General Mills Lucky Charms, Mini Lucky Charms, June 2009
- Bridging the gap: One brand targeting both kids and adults
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- Figure 44: General Mills Honey Nut Cheerios, Bee Happy Bee Healthy, February 2009
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- Figure 45: General Mills Honey Nut Cheerios, Buzz Saves the Day, May 2009
Consumption
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- Key points
- Household usage
- Cold cereal
- Hot cereal—household usage
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- Figure 47: Household use of cereal, hot and cold, by age and presence of children, February 2008-March 2009
- Frequency of use per week
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- Figure 48: Weekly portions of cereal eaten, by age, race/Hispanic origin, and presence of children, February 2008-March 2009
Brand Usage
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- Brand usage
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- Figure 49: Leading brands of cold cereal used, February 2008-March 2009
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- Figure 50: Leading brands of cold cereal used, by household size, February 2008-March 2009
- Hot cereal
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- Figure 51: Leading brands of hot cereal used, February 2008-March 2009
Breakfast, Lunch, Dinner and Snacks
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- Key points
- How cereal is used
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- Figure 52: How cereal is used, by gender, June 2009
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- Figure 53: How cereal is used, by age, June 2009
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- Figure 54: How cereal is used, by presence of children, June 2009
Most Important Attributes of Cereal
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- Key points
- Cereal attributes that influence purchase
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- Figure 55: Important attributes of cereal, by age, June 2009
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- Figure 56: Important attributes of cereal*, by household income, June 2009
Reasons Why Cereal is Eaten
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- Key points
- Reasons for eating cereal
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- Figure 57: Reasons for eating cereal, by age, June 2009
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- Figure 58: Reasons for eating cereal, by household income, June 2009
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- Figure 59: Reasons for eating cereal, by presence of children, June 2009
- Figure 60: Reasons for eating cereal, by gender, June 2009
Purchasing Behavior
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- Key points
- Sampling, couponing, and trading down
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- Figure 61: Cereal purchasing and eating behaviors, by gender, June 2009
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- Figure 62: Purchasing and eating behaviors, by age, June 2009
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- Figure 63: Purchasing and eating behaviors, by household income, June 2009
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- Figure 64: Purchasing and eating behaviors, by presence of children, June 2009
Attitudes Towards Cereal
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- Key points
- Women, younger, and higher-income demos keen on variety
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- Figure 65: Attitudes towards cereal, by age, June 2009
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- Figure 66: Attitudes towards cereal, by household income, June 2009
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- Figure 67: Attitudes towards cereal, by presence of children, June 2009
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- Figure 68: Attitudes towards cereal, by gender, June 2009
Interest in Artificial Sweetener
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- Older, wealthier consumers seeking artificial sweeteners
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- Figure 69: Interest in artificial sweetener, by age, June 2009
- Figure 70: Interest in artificial sweetener, by household income, June 2009
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- Figure 71: Interest in artificial sweetener, by presence of children, June 2009
Impact of Race/Hispanic Origin
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- Key points
- Household usage
- Cold cereal
- Hot cereal
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- Figure 72: Household use of cereal, hot and cold, by race/Hispanic origin, February 2008-March 2009
- Reasons for eating cereal
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- Figure 73: Reasons for eating cereal, by race/Hispanic origin, June 2009
- Purchasing and eating behaviors
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- Figure 74: Purchasing and eating behaviors, by race/Hispanic origin, June 2009
Kids’ and Teens’ Use of Breakfast Cereal
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- Key points
- Near-universal penetration among children for cold cereal
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- Figure 75: Incidence of kids’ consumption of cereal, by gender and age, October 2007-December 2008
- Availability of favorite brands in home
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- Figure 76: Prevalence of child’s favorite cereal in home, October 2007-December 2008
- Penetration declines as kids become tweens and teens
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- Figure 77: Incidence of teens’ consumption of cereal, by gender and age, October 2007-December 2008
- Getting to decide on brands
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- Figure 78: Incidence of teens’ ability to decide which brands of cereal to buy, October 2007-December 2008
Custom Consumer Groups: Moms and dads
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- Key points
- How parents use cereal
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- Figure 79: Cereal as a snack for kids, by moms and dads, June 2009
- Parental attitudes and behaviors towards cereal
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- Figure 80: Attitudes towards cereal, by moms and dads, June 2009
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- Figure 81: Purchasing and eating behaviors, by moms and dads, June 2009
- What’s important to parents when buying cereal for kids
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- Figure 82: Important attributes when buying cereal for kids, by moms and dads, January 2009
- An emerging market in premium-priced low-sugar cereal for kids
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- Figure 83: Important attributes when buying cereal for kids, by household income, January 2009
Cluster Analysis
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- Cerealites
- Watchers
- Varieties
- Cluster characteristics
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- Figure 84: Cereal clusters, June 2009
- Figure 85: Most important attributes of cereal*, by clusters, June 2009
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- Figure 86: Reasons for eating cereal, by clusters, June 2009
- Figure 87: How cereal is eaten (by daypart, and by dairy product used) by clusters, June 2009
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- Figure 88: Attitudes towards cereal, by clusters, June 2009
- Figure 89: Opinions about cereal, by clusters, June 2009
- Cluster demographics
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- Figure 90: Cereal clusters, by gender, June 2009
- Figure 91: Cereal clusters, by age, June 2009
- Figure 92: Cereal clusters, by household income, June 2009
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- Figure 93: Cereal clusters, by race, June 2009
- Figure 94: Cereal clusters, by Hispanic origin, June 2009
- Cluster methodology
IRI/Builders Panel Data
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- Cold cereal
- Consumer insights on key purchase measures—cold cereal
- Brand map
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- Figure 95: Brand map, selected brands of cold cereal, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 96: Key purchase measures for the top brands of cold cereal, by household penetration, 2008*
- Hot cereal
- Consumer insights on key purchase measures—hot cereal
- Brand map
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- Figure 97: Brand map, selected brands of hot cereal, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 98: Key purchase measures for the top brands of hot cereal, by household penetration, 2008*
Appendix: Other Useful Consumer Tables
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- Figure 99: Factors impacting breakfast habits, by household income, June 2009
- Important attributes of cereal
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- Figure 100: Important attributes of cereal, by gender, June 2009
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- Figure 101: Important attributes of cereal, by presence of children, June 2009
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- Figure 102: Important attributes of cereal, by race/Hispanic origin, June 2009
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- Figure 103: Attitudes towards cereal, by race/Hispanic origin, June 2009
- Important attributes when buying cereal for kids
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- Figure 104: Important attributes when buying cereal for kids, by race/Hispanic origin, January 2009
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Appendix: Penetration of Cereal by Mosaic Classification
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- Cold cereal
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- Figure 105: Incidence of household consumption of cold cereal, by mosaic, February 2008-March 2009
- Hot cereal
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- Figure 106: Incidence of household consumption of hot cereal, by mosaic, February 2008-March 2009
- Mosaic definitions
Appendix: Personal Consumption Among Online Respondents
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- Figure 107: Personal usage and purchase of breakfast cereal, by age and presence of children, June 2009
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Appendix: New QSR Breakfast Offerings
Appendix: IRI/Builders Panel Data Definitions
Appendix: Trade Associations
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