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Breakfast Cereals - UK - February 2008

ISSUES IN THE MARKET
Definitions
Four key issues
INSIGHTS AND OPPORTUNITIES
Organic breakfast cereals are the biggest opportunity
Seasonal cereals
The No Breakfast Brigade
FAST FORWARD TRENDS
 CUSTOMIZATION
What’s it about?
What we’ve seen
Implications/what next?
 AUTHENTICITY
What’s it about?
What we’ve seen
Implications/What next?
MARKET IN BRIEF
Consumers are trading up
Breakfast is back
RTE cereals jump on the oat bandwagon
Cereal success
Prices are set to rise
Premiumisation to continue
INTERNAL MARKET ENVIRONMENT
Key points
The health revolution
Figure 1: Agreement with selected lifestyle statements, 2003-07
Health is the key driving force of sales and NPD
Skipping breakfast
The way to start the day
Figure 2: Agreement with selected lifestyle statements, 2003-07
BROADER MARKET ENVIRONMENT
Key points
FSA nutrient profiling and Ofcom Advertising Ban
Cereal prices
An ageing population
Figure 3: UK population changes, by age and socio-economic status, 2002-12
Going upmarket
COMPETITIVE CONTEXT
Key points
Toast and fruit are the key competitors
Figure 4: Product eaten at breakfast and frequency, December 2006
Figure 5: Product eaten at breakfast and frequency, December 2006
Bread
Yo‘go’urt
Fruit on top
Cereal bars are growing
Figure 6: Opportunities and threats in the competing markets, 2002-06
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Figure 7: UK launches of breakfast cereal products by health claim and year, 2003-07
Light and crispy
Gooey on the inside
Luxuriously healthy
Packed up and ready to go
Superfood: super appeal
The targeting strategy
Totally tropical taste
Big flavours
MARKET VALUE AND FORECAST
Key points
Consumers are trading up
Figure 8: UK retail sales of breakfast cereals, 2002-07
 THE FUTURE
Rising cereal prices
Increasing frequency of usage will be key
 FORECAST
Healthy growth set to continue
Figure 9: UK retail sales of breakfast cereals, 2002-12
Health to remain a crucial market driver
Demographic changes to promote growth
Figure 10: UK retail volume and value sales of RTE cereal, 2002-12
Figure 11: UK retail volume and value sales of hot cereal, 2002-12
Higher growth potential for hot cereals
Rising cereal prices
Factors used in the forecast
SEGMENT PERFORMANCE
Key points
The kings of breakfast cereals
Figure 12: UK retail volume and value sales of RTE cereal, 2002-07
Easy to eat the perfect proposition
A stable staple
Shape of the market
Figure 13: Value share of sub-sections of the RTE breakfast cereal market, 2007
I’ll have my favourite
Doing it for the kids
From reducing to naturally good
The oat effect drives naturally healthy
Minor organic
Cold oat-base cereals have stolen hot cereals’ thunder
Figure 14: UK retail volume and value sales of hot cereal, 2002-07
Own-label repercussions
Hot instant cereals are growing
Figure 15: UK retail volume sales of hot cereal, by type, 2003-07
MARKET SHARE
Key points
Branded successful
Very special K
Figure 16: The top-selling breakfast cereals in the UK, by estimated brand shares, 2006-07
The health effect
No compromise on favourites
Oatso successful
PRODUCT POSITIONING
The reign of traditional brands
Figure 17: Price per Kilo of RTE Brands from Selected Supermarkets, January 2008
The deflationary effect of own label
Figure 18: Price per Kilo of Hot-Cereal Brands from Selected Supermarkets, January 2008
COMPANIES AND PRODUCTS
Brand map of manufacturers and brands
Figure 19: Map of manufacturers and brands in the breakfast cereals market, 2008
 COMPANY PROFILES
Kellogg’s UK
Figure 20: Key developments in the Kelloggs portfolio, 2007
Cereal Partners UK (Nestlé)
The Weetabix Food Company
Quaker Oats Ltd
W. Jordans Ltd
Dorset Cereals Ltd
Mornflake Oats
Kallo Foods Ltd
Doves Farm Foods
Weight Watchers
Honey Monster Foods
BRAND ELEMENTS
 BRAND MAP
Figure 21: Attitudes and usage of breakfast cereal brands, January 2008
 WEETABIX
What the brand is trying to achieve
What the consumer thinks
Figure 22: Attitudes towards the Weetabix brand, January 2008
 KELLOGG’S SPECIAL K
What the brand is trying to achieve
What the consumer thinks
Figure 23: Attitudes towards the Kellogg’s Special K brand, January 2008
 ALPEN
What the brand is trying to achieve
What the consumer thinks
Figure 24: Attitudes towards the Alpen brand, January 2008
 JORDANS
What the brand is trying to achieve
What the consumer thinks
Figure 25: Attitudes towards the Jordans brand, January 2008
 CRUNCHY NUT CORN FLAKES
What the brand is trying to achieve
What the consumer thinks
Figure 26: Attitudes towards the Crunchy Nut Corn Flakes brand, January 2008
 SHREDDIES
What the brand is trying to achieve
What the consumer thinks
Figure 27: Attitudes towards the Shreddies brand, January 2008
 OATIBIX
What the brand is trying to achieve
What the consumer thinks
Figure 28: Attitudes towards the Shreddies brand, January 2008
 SCOTT’S PORRIDGE OATS
What the brand is trying to achieve
What the consumer thinks
Figure 29: Attitudes towards the Scott’s Porridge Oats brand, January 2008
 BRAND QUALITIES OF BREAKFAST CEREAL BRANDS
Weetabix and Scott’s Porridge Oats are the healthiest and most nutritious, but Crunchy Nut is the most fun, exciting and indulgent
Figure 30: Consumer usage of various breakfast cereal brands, January 2008
Experience of Breakfast Cereal brands
Weetabix the most popular
Figure 31: Consumer usage of various breakfast cereal brands, January 2008
Brand consideration for Breakfast Cereal brands
Retention dominated by Weetabix
Figure 32: Consideration of various breakfast cereal brands, January 2008
Brand momentum for breakfast cereal brands
Most brands in positive shape, and the healthiest and the least healthy lead the field!
Figure 33: Momentum of various breakfast cereal brands, January 2008
Brand satisfaction for breakfast cereal brands
Scott’s Porridge Oats demonstrates excellent satisfaction and pride.
Figure 34: Satisfaction of various breakfast cereal brands, January 2008
Brand commitment to Breakfast Cereal brands
SPO, Weetabix and CNC have the highest recommendation
Figure 35: Commitment to various breakfast cereal brands, January 2008
 ROUND UP
BRAND COMMUNICATION AND PROMOTION
Key points
Spending spree
Figure 36: Main monitored media spend on cereals, 2003-07*
Figure 37: Main monitored media spend, on cereals ready to eat and cereal requiring preparation, 2003-07*
 SEASONALITY
Figure 38: Monthly main monitored media spend on breakfast cereals, 2005-07
The mighty Kellogg’s
Figure 39: Main monitored media spend, by advertiser, 2003-07
Nominal spend
 CEREALS REQUIRING PREPARATION
CHANNELS TO MARKET
Key points
Figure 40: UK retail distribution of breakfast cereal, 2003-07
Multiple strengths
Acting independently
Multiple convenience
CONSUMER 1 – WHO – USAGE AND FREQUENCY?
Key points
Cold breakfast cereals are a key part of the breakfast ritual
Consumption of cold breakfast cereals
Figure 41: Consumption of cold breakfast cereals in the last 12 months, 2003-07
Feeding the masses
Figure 42: Consumption of cold breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07
Retired and ABs have daily breakfast
Hot breakfast cereals growing as manufacturers talk up the game
Figure 43: Consumption of hot breakfast cereals in the last 12 months, 2003-07
Figure 44: Consumption of hot breakfast cereals in the last 12 months, by gender, age and socio-economic status, 2003-07
Consumers eat both hot and cold cereals
Cereal bars are a different competitive set
Figure 45: Consumption of cereal bars, cold breakfast cereals and hot breakfast cereals in the last 12 months, 2003-07
Cereal has a firm hold on the youth market
Figure 46: 7-14-year-olds who eat cereal, 2003-07
13-14-year-olds: the key target group
Figure 47: 7-14-year-olds who eat cereal, by demographic sub group, 2007
CONSUMER 2 – USAGE OCCASIONS
Key points
When do consumers eat cereals?
Figure 48: Occasions when you eat cereals, November 2007
Week usage dominates
Snacking popular tabloid readers
New product packaging will help differentiate product
CONSUMER 3 – ATTITUDES AND MOTIVATIONS
Key points
The brand factor
Figure 49: Factors looked for when buying breakfast cereal, November 2007
Men choose by brand, women by health
Figure 50: Factors looked for when selecting cereals, by gender, November 2007
Growing the oat-based appeal to younger consumers
Figure 51: Factors looked for when selecting cereals, by variation from mean age, November 2007
Different age groups go healthy in different ways
Wholegrain for a healthy heart
Figure 52: Factors looked for when selecting cereals ‘rich in wholegrain’, by socio-economic status and age, November 2007
The organic effect
APPENDIX
Advertising data
Abbreviations
APPENDIX – INTERNAL MARKET ENVIRONMENT
Number of times a week people eat breakfast
Figure 53: Number of times consumers eat breakast per week, January 2007
Figure 54: Agreement with selected lifestyle statements, by demographic sub group, 2007
Figure 55: Agreement with selected lifestyle statements, by demographic sub group, 2007
Figure 56: Agreement with selected lifestyle statements, by demographic sub group, 2007
Figure 57: Agreement with selected lifestyle statements, by demographic sub group, 2007
Figure 58: Agreement with selected lifestyle statements, by demographic sub group, 2007
Figure 59: Agreement with selected lifestyle statements, 2003-07
APPENDIX – MARKET SIZES
Figure 60: UK retail volume and value sales of breakfast cereal, by type, 2003-07
Segment performance
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 61: Main monitored media spend by advertiser, 2003 - 07
Figure 62: Main monitored media spend, by advertiser, 2003 - 07
APPENDIX – CONSUMER 1 – DETAILED DEMOGRAPHICS
Figure 63: Consumption of hot breakfast cereals in the last 12 months, by demographic sub group, 2007
Figure 64: Consumption of cold breakfast cereals in the last 12 months, by demographic sub group, 2007
APPENDIX – YOUTH TGI
Figure 65: Agreement with selected lifestyle statements on food, 7-10s, 2003-07
Figure 66: Agreement with selected lifestyle statements on food, 11-14s, 2003-07
Figure 67: Agreement with selected lifestyle statements on food, 7-10s, by gender, age, socio-economic group and region, 2007
Figure 68: Agreement with selected lifestyle statements on food, 11-14s, by gender, age, socio-economic group and region, 2007
APPENDIX – MEAL OCCASIONS
Figure 69: Meal occasions for eating breakfast cereal, November 2007
Figure 70: Meal occasions for eating breakfast cereal, November 2007
APPENDIX – FACTORS LOOKED FOR WHEN CHOOSING A CEREAL
Figure 71: Factors looked for when choosing a cereal, November 2007
Figure 72: Factors looked for when selecting a cereal, November 2007
Figure 73: Factors looked for when selecting a cereal, November 2007

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