Breakfast Cereals - UK - August 2012

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: UK retail value sales forecast for breakfast cereals, 2007-17
Market factors
Ageing population presents challenges and opportunities
Figure 2: Trends in the age structure of the UK population, 2007-17
Milder temperatures dampen usage of hot cereals
Rising commodity inflation forces cereal makers to hike up prices
Companies, brands and innovation
Figure 3: Market share of breakfast cereals, by top ten brands, 2011
Adspend
The consumer
Nine in ten adults eat breakfast cereals
Figure 4: Usage of breakfast cereals (including porridge/oats), 2009-11
Single-grain cereals and porridge are most popular
Figure 5: Types of breakfast cereal eaten, June 2012
Shoppers want cereals to appeal to the whole family
Figure 6: Factors taken into consideration when choosing breakfast cereal, June 2012
Older shoppers are ingredient-savvy
Demand for better packaging options
Figure 7: Attitudes towards cereals, June 2012
The validity of health claims divides the nation
Snacking creates more usage occasions
Figure 8: Attitudes towards cereals, June 2012
Under-35s are most adventurous with new flavours
What we think
ISSUES IN THE MARKET
How is competition from other foods impacting upon the cold cereals market?
What key innovation trends are shaping the market?
Is the market responding adequately to consumers’ demand for healthier cereals?
How can packaging innovation tap into the demand for freshness?
How is social media impacting upon the breakfast cereals market?
TREND APPLICATION
Trend: Cool Vending
Trend: Hungry Planet
2015 Trend: Old Gold
MARKET DRIVERS
Key points
The importance of fibre climbs with age
Figure 9: Agreement with the statement ‘I try to include plenty of fibre in my diet these days’, by gender, age and socio-economic group, 2011
With incomes under strain, healthy intentions are diminishing
Figure 10: Agreement with the statements ‘I am prepared to pay more for foods that don’t contain artificial additives’ and ‘I consider my diet to be very healthy’, 2007-11
Figure 11: Agreement with the statements ‘I am prepared to pay more for foods that don’t contain artificial additives’ and ‘I consider my diet to be very healthy’, by gender, age and socio-economic group, 2011
Employment turns a corner in 2011
Figure 12: Trends in average working hours, per day, 2007-11
Ageing population presents challenges and opportunities
Figure 13: Trends in the age structure of the UK population, 2007-17
Families are a key target audience
Figure 14: Forecast adult population trends, by lifestage, 2007-17
Oat and wheat prices are up again in 2012
Figure 15: Weekly prices of cereals, England and Wales, January 2009-May 2012
Supermarket price wars cause milk prices to slip
Figure 16: Index of RPI for fresh milk and monthly farmgate milk prices, January 2008-April 2012
2011 was an exceptionally mild year
Figure 17: Mean winter* temperatures, UK, 2005/06-2011/12
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Cold cereals continue to dominate, but an uptick in hot cereals NPD
Figure 18: New product development in the UK cereals market, by category, 2008-12
Supermarkets up their game with own-label
Figure 19: New product development in the UK cereals market, by private label, 2009-11
Asda ramps up NPD in 2011
Figure 20: New product development in the UK cereals market, by top 20 companies, 2009-12
Kellogg’s ups the ante for kids’ cereals
Oats get macho with the launch of Fuel
Plain cereals hold their steady lead
Figure 21: New product development in the UK cereals market, top ten flavours, 2009-11
High-fibre launches leap ahead
Figure 22: New product development in the UK cereals market, by top ten claims, 2011
Figure 23: Change in share of claims in new product launches in the UK cereals market, 2009-11
Convenience is a key area for NPD
MARKET SIZE AND FORECAST
Key points
Volume sales predicted to slump in 2012
Figure 24: UK retail volume and value sales for total breakfast cereals, 2007-17
Slight decline expected in volume sales…
Figure 25: UK retail volume sales of cold and hot breakfast cereals, 2007-17
…but value continues to grow driven by price inflation
Figure 26: UK retail value sales of cold and hot breakfast cereals, 2007-17
SEGMENT PERFORMANCE
Key points
Volume sales of cold cereals tumble…
Figure 27: UK retail value and volume sales of cold breakfast cereals, 2007-17
…while hot cereals post healthy volume growth
Figure 28: UK retail value and volume sales of hot breakfast cereals, 2007-17
MARKET SHARE
Key points
Kellogg’s brands continue to lead the market
Figure 29: Market share of breakfast cereals, by top ten brands, 2011
Many classics have taken a hit
Figure 30: Market share and sales value of breakfast cereals, by brand, 2009-11
Increased competition, particularly in the kids’ cereals category
Oat So Simple sales have soared
Own-label grew ahead of the market in 2011
COMPANIES AND PRODUCTS
Figure 31: Selected leading companies in the breakfast cereals market in the UK and their brands, 2012
Kellogg's
Background
Product range
Product innovation
Marketing
Weetabix
Background
Product range
Product innovation
Marketing
Cereal Partners UK
Background
Product range and innovation
Marketing
Quaker Oats
Background
Product range and innovation
Marketing
Dorset Cereals
Background
Product range and innovation
Marketing
Honey Monster Foods
Background
Product range and innovation
Recent activity
Jordans
Background
Product range
Marketing
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend falls by a sixth in 2011
Figure 32: Topline advertising expenditure in the UK cereals market, 2008-11
Figure 33: Advertising expenditure in the UK cereals market, by product sub-category, 2008-12
Kellogg’s continues to monopolise cereal advertising
Figure 34: Advertising expenditure in the UK cereals market, by top ten companies, 2008-11
Figure 35: Share of advertising expenditure in the UK cereals market, by top ten companies, 2008-11
TV advertising dominates
Figure 36: Advertising expenditure in the UK cereals market, by media type, 2008-11
Figure 37: Share of advertising expenditure in the UK cereals market, by media type, 2008-11
CHANNELS TO MARKET
Key point
Multiples dominate the market
Figure 38: UK retail value sales of breakfast cereals, by outlet type, 2009-11
BRAND RESEARCH
Brand map
Figure 39: Attitudes towards and usage of brands in the breakfast cereal sector, June 2012
Correspondence analysis
Brand attitudes
Figure 40: Attitudes, by breakfast cereal brand, May 2012
Brand personality
Figure 41: Breakfast cereal brand personality – macro image, May 2012
Figure 42: Breakfast cereal brand personality – micro image, May 2012
Brand experience
Figure 43: Breakfast cereals brand usage, May 2012
Figure 44: Satisfaction with various breakfast cereal brands, May 2012
Figure 45: Consideration of breakfast cereal brands, May 2012
Figure 46: Consumer perceptions of current breakfast cereal brand performance, May 2012
Figure 47: Breakfast cereal brand recommendation – Net Promoter Score, May 2012
Brand index
Figure 48: Breakfast cereals brand index, May 2012
Figure 49: Breakfast cereals brand index vs. recommendation, May 2012
Target group analysis
Figure 50: Target groups, May 2012
Figure 51: Breakfast cereal brand usage, by target groups, May 2012
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
THE CONSUMER – BREAKFAST CEREAL USAGE
Key points
Consumption of breakfast cereals is high
Figure 52: Usage of breakfast cereals (including porridge/oats), by frequency, 2011
Figure 53: Trends in frequency of usage of breakfast cereals (including porridge/oats), 2009-11
Usage peaks among women and 35-44s
Figure 54: Frequency of usage of breakfast cereals (including porridge/oats), by gender, 2011
Families eat the most cereal
Figure 55: Frequency of usage of breakfast cereals (including porridge/oats), by lifestage and presence of children, 2011
THE CONSUMER – TYPES OF BREAKFAST CEREAL EATEN
Key points
Single-grain cereals are most popular
Figure 56: Types of breakfast cereal eaten, June 2012
Porridge usage peaks among over-55s
Figure 57: Usage of porridge in the last 12 months, by gender, age and socio-economic group, June 2012
Under-35s opt for multigrain, children’s and chocolate cereals
Figure 58: Usage of multigrain, children’s and chocolate cereals in the last 12 months, by gender, age and socio-economic group, June 2012
Diet cereals are favoured by women and under-35s
THE CONSUMER – CHOICE FACTORS
Key points
Shoppers want cereals to please the whole family
Figure 59: Factors taken into consideration when choosing breakfast cereals, June 2012
Special offers attract price-savvy shoppers in their droves
Over-55s are most health-led
Figure 60: Consumers who consider fibre, sugar and wholegrain content when choosing breakfast cereals, by gender, age and socio-economic group, June 2012
Parents care the most about vitamin fortification
Men are more brand-oriented
THE CONSUMER – ATTITUDES TOWARDS CEREALS
Key points
Strong demand for resealable packaging
Figure 61: Attitudes towards cereals, June 2012
Low-sugar variants spark majority interest
Under-35s want an energy boost
Consumers are divided over trusting the health benefits of cereals
Own-label is gaining trust
Figure 62: Agreement with the statement ‘Own-label cereal is just as good as branded‘, June 2012
Nearly half of cereal eaters want variety
Vitamin D is an issue in the public eye
The perceived inconvenience of porridge is a barrier for three in ten
THE CONSUMER – FURTHER ATTITUDES TOWARDS CEREALS
Key points
Usage of cereals is not restricted to breakfast time
Figure 63: Further attitudes towards cereals, June 2012
Over-55s are most likely to add extra toppings
Under-35s are most experimental with flavours
One in five eat cereals with hot milk
A quarter of parents want more healthy kids’ cereals
Under-25s often eat breakfast out of the home
THE CONSUMER – TARGET GROUPS
Key points
Four target groups
Figure 64: Target groups based on attitudes towards breakfast cereals, June 2011
Enthusiasts (27%)
Brand Buyers (24%)
Traditionalists (22%)
Own-Label Fans (27%)
APPENDIX – MARKET DRIVERS
Figure 65: Agreement with selected lifestyle statements on diet and health, by demographics, 2011
APPENDIX – BRAND RESEARCH
Figure 66: Brand usage, May 2012
Figure 67: Brand commitment, May 2012
Figure 68: Brand momentum, May 2012
Figure 69: Brand diversity, May 2012
Figure 70: Brand satisfaction, May 2012
Figure 71: Brand recommendation, May 2012
Figure 72: Brand attitude, May 2012
Figure 73: Brand image – macro image, May 2012
Figure 74: Brand image – micro image, May 2012
Figure 75: Profile of target groups, by demographics, May 2012
Figure 76: Psychographic segmentation, by target groups, May 2012
Figure 77: Brand usage, by target group, May 2012
Brand index
Figure 78: Brand index, May 2012
APPENDIX – THE CONSUMER – BREAKFAST CEREALS USAGE
Figure 79: Frequency of usage of breakfast cereals (including porridge/oats), by demographics, 2011
APPENDIX – THE CONSUMER – TYPES OF BREAKFAST CEREALS EATEN
Figure 80: Most popular types of breakfast cereal eaten, by demographics, June 2012
Figure 81: Next most popular types of breakfast cereal eaten, by demographics, June 2012
APPENDIX – THE CONSUMER – CHOICE FACTORS
Figure 82: Most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
Figure 83: Next most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
Figure 84: Other factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
Figure 85: Most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
Figure 86: Next most popular factors taken into consideration when choosing breakfast cereal, by demographics, June 2012
APPENDIX – ATTITUDES TOWARDS BREAKFAST CEREALS
Figure 87: Agreement with the statements ‘Porridge is inconvenient to prepare’ and ‘I should be getting more Vitamin D in my diet’, by demographics, June 2012
Figure 88: Agreement with the statements ‘I trust the health benefits breakfast cereals promise’ and ‘I would buy a cereal with resealable packaging’, by demographics, June 2012
Figure 89: Agreement with the statements ‘I would prefer more convenient packaging in cereals’ and ‘I would like to see more healthier, chocolate-flavoured cereals’, by demographics, June 2012
Figure 90: Agreement with the statements ‘I prefer porridge to cold cereal as it's more filling’ and ‘I'd be interested in buying low-sugar versions of my favourite brands’, by demographics, June 2012
Figure 91: Agreement with the statements ‘I get bored eating the same breakfast day in day out’ and ‘Own-label cereal is just as good as branded’, by demographics, June 2012
Figure 92: Agreement with the statements ‘I’d like to see more packaging that would keep my cereal fresher for longer’ and ‘I buy breakfast that gives me an energy boost’, by demographics, June 2012
Figure 93: Attitudes towards cereals, by most popular types of breakfast cereal eaten, June 2012
Figure 94: Attitudes towards cereals, by next most popular types of breakfast cereal eaten, June 2012
APPENDIX – FURTHER ATTITUDES TOWARDS BREAKFAST CEREALS
Figure 95: Most popular attitudes towards cereals, by demographics, June 2012
Figure 96: Next most popular attitudes towards cereals, by demographics, June 2012
Figure 97: Other attitudes towards cereals, by demographics, June 2012
Figure 98: Attitudes towards cereals, by most popular types of breakfast cereal eaten, June 2012
Figure 99: Attitudes towards cereals, by next most popular types of breakfast cereal eaten, June 2012
APPENDIX – THE CONSUMER – TARGET GROUPS
Figure 100: Target groups, by demographics, June 2012
Figure 101: Attitudes towards cereals, by target groups, June 2012
Figure 102: Types of breakfast cereal eaten, by target groups, June 2012
Figure 103: Number of different types of cereal in the home at any one time, by target groups, June 2012
Figure 104: Factors taken into consideration when choosing breakfast cereal, by target groups, June 2012
Figure 105: Factors taken into consideration when choosing breakfast cereal, by target groups, June 2012
Figure 106: Attitudes towards cereals, by target groups, June 2012
Figure 107: Grocery shopping habits, by target groups, June 2012
Figure 108: Attitude towards health and healthy lifestyles, by target groups, June 2012
Figure 109: Cooking and eating habits, by target groups, June 2012