The $11 billion cereal category declined 5% from 2009-14 despite a high household penetration rate. The cold cereal segment, which represents 87% of category sales, continues to decline as a result of competition from other convenient, nutrient-rich foods, such as yogurt, fruit, and breakfast sandwiches. In contrast, interest in the health benefits of hot cereal, especially oatmeal, have led to a 6% increase in the segment from 2012-14. Packaging and product innovation, including snack-size packs, and protein- and fiber-rich cereals, aim to help turn around declining sales. Additionally, a focus on consumption occasions beyond breakfast, including as a snack or late night indulgence, present areas of opportunity for the category.

Mintel here provides a comprehensive analysis of the following factors that have the greatest potential to impact the category’s performance:

• Reasons for the declining cold cereal segment, including interest in hot cereal, and competition from foodservice options and other breakfast food options

• How the market is broadening and how future growth will hinge on growing interest in snacking/on-the-go eating, positive health perceptions of the hot cereal segment, and interest in products with better-for-you attributes (eg fiber, protein, superfoods)

• How both hot and cold cereal segments have been performing in recent years, and how they are expected to perform in the near term.

• Challenges to the market (including interest in health, and expansion of QSR/grab-and-go) and how manufacturers and retailers can position products to confront them

• Attitudes and behaviors of breakfast cereal consumers, including reasons for consuming more or less cereal, cereal preferences related to nutrition, function, packaging and more.

This report builds on the analysis presented in Mintel’s Breakfast Cereals – US, August 2013, as well as the February 2012, September 2009, and older reports of the same title, as well as Mintel’s Private Label Cereal – US, July 2010.

For the purposes of this report, Mintel has used the following definitions:

RTE (ready-to-eat) cold cereal is any cereal (eg, corn flakes, shredded wheat, toasted oat cereal) that is usually consumed dry or with dairy/non-dairy milk.

Hot cereal is defined as cereal that must be cooked (on the stovetop or in the microwave oven) before eating, including oatmeal, instant oatmeal, hot wheat, and other grain products.

Cereal bars and other breakfast products, such as Kellogg’s Pop-Tarts, are excluded from the scope of this report, but their importance to overall demand for breakfast cereal is discussed where appropriate.

Value figures throughout this report are at (rsp) retail selling prices excluding sales tax unless otherwise stated.

• Market Size and Forecast: Total retail sales based on Information Resources, Inc., InfoScan Reviews; US Census Bureau, Economic Census; Progressive Grocer's Consumer Expenditure Study

• Segment Performance: Total retail sales based on Information Resources, Inc., InfoScan Reviews; US Census Bureau, Economic Census; Progressive Grocer's Consumer Expenditure Study

• Retail Channels: Based on Information Resources, Inc., InfoScan Reviews; US Census Bureau, Economic Census; Progressive Grocer's Consumer Expenditure Study; except supermarket sales, which are based on Information Resources, Inc. InfoScan Reviews.

• Leading Companies and Brand Share: Based on MULO sales data from Information Resources, Inc. InfoScan Reviews. MULO is defined as Multi Outlet, representative of the following channels: total US Grocery, Mass, Total US Drug, Total Walmart, Dollar, Military, and Club

For the purposes of this report, Mintel commissioned exclusive consumer research through GMI to explore consumer consumption of/attitudes and behaviors toward hot and cold cereals. Mintel was responsible for the survey design, data analysis, and reporting. Fieldwork was conducted in May 2014 among a sample of 2,000 adults aged 18+ with access to the internet.

Mintel selects survey respondents by gender, age, household income, and region so that they are proportionally representative of the US adult population using the internet. Mintel also slightly over-samples, relative to the population, respondents that are Hispanic or Black to ensure an adequate representation of these groups in our survey results and to allow for more precise parameter estimates from our reported findings. Please note that Mintel surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in the survey results.

Mintel has also analyzed data from Experian Marketing Services, using the Simmons NCS (National Consumer Study), the Simmons NHCS (National Hispanic Consumer Study), the Simmons NCS Teen Study, and the Simmons NCS Kids Study.

The Experian Marketing Services, Simmons NCS/NHCS was carried out during January 2013-March 2014 and the results are based on the sample of 24,005 adults aged 18+, with results weighted to represent the US adult population. The Experian Marketing Services, Simmons NCS Teen Study was conducted during November 2012-December 2013 and based on a sample of 1,811 teenagers aged 12-17, with results weighted to represent the US teen population.

While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (White, Black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.

The following is a list of abbreviations used in this report:

Generations are discussed within this report, and they are defined as:

* also known as Generation Y or Echo Boomers

In order to provide an inflation-adjusted price value for markets, Mintel uses the CPI to deflate current prices. The CPI is defined as follows: