Breakfast Cereals - UK - February 2004

INTRODUCTION AND ABBREVIATIONS
Definitions
Consumer research
ACORN
 ABBREVIATIONS
EXECUTIVE SUMMARY
Demographic influences
Value recovery continues
The corn sector struggles
Top three manufacturers dominate
Heavily promoted category
Distribution
Consumer behaviour
Future trends
MARKET DRIVERS
Shifting demographics
Figure 1: Trends and projections in total UK population, by age group, 1998-2007
Fewer children a concern
An ageing market a positive sign
Young adults as snackers?
More people living alone
Figure 2: Number of households, by household size, 1998-2007
Skipping breakfast
Health concerns and trends
Nutrition focus – a double-edged sword?
Advertising to children – the debate continues
Organic
MARKET SIZE AND TRENDS
Slow, steady growth characterises market
Figure 3: UK retail volume and value sales of breakfast cereal, 1998-2003
Market has found growth avenue in hot cereal
Figure 4: UK retail volume and value sales of breakfast cereal, by type, 2001 and 2003
Hot eating leaps forward
MARKET SEGMENTATION
Value growth for RTE
Figure 5: UK retail volume and value sales of RTE cereal, 1998-2003
Figure 6: UK retail value sales of RTE cereal, by type and value, 2001 and 2003
Children’s goes from strength to strength
Wheat is still strong
Corn is struggling
Bran and health cereals – differing success
Muesli – small but strong
Strong growth in hot eating cereals
Figure 7: UK retail volume and value sales of hot cereal, 1998-2003
Figure 8: UK retail volume sales of hot cereal, by type, 2001 and 2003
THE SUPPLY STRUCTURE
Market supply
Figure 9: Total breakfast cereal market, by manufacturer shares, 2001 and 2003
The top four continue to grow
A mixed fortune for smaller manufacturers
RTE top-selling brands
Figure 10: The top-selling ready-to-eat breakfast cereals in the UK, by estimated brand shares, 2003
Weetabix is number one
Kellogg has six in the top ten
Nestlé’ strong in the children’s sector
Hot cereal brands
Figure 11: Hot breakfast cereal, brand shares, 2001 and 2003
 COMPANIES AND BRANDS
Figure 12: Brand map of the UK breakfast cereal market, by major companies, January 2004
Cereal Partners
NPD
Jordans
NPD
Kellogg
NPD
Quaker
NPD
Weetabix
NPD
 RETAILER BRAND (OWN-LABEL)
Dailycer
Morning Foods
NPD
 OTHER COMPANIES AND SMALLER BRANDS
Organic
 NEW PRODUCT BRIEFS
February 2004
January 2004
November 2003
October 2003
September 2003
August 2003
ADVERTISING AND PROMOTION
 ABOVE THE LINE
Advertising presents a barrier to entry
Expenditure reflects size and scale of the market
Figure 13: Main monitored media advertising expenditure on breakfast cereals, 1998-2003
Figure 14: Annual percentage change – total media spending and total sales, 1999-2003
Spend on hot eating produced results
Figure 15: Main monitored media advertising expenditure on breakfast cereals, by breakfast type, 1998-2003
 RTE CEREALS
Figure 16: Main monitored media advertising expenditure on RTE breakfast cereals, by selected brands, 2001 and 2003
Kellogg
Cereal Partners
Weetabix
Quaker
Other
 HOT CEREAL
Figure 17: Main monitored media advertising expenditure on hot breakfast cereals, by manufacturer and brand, 2001 and 2003
Quaker
Weetabix
 BELOW-THE-LINE ACTIVITY
Price-related promotions boost volumes
Figure 18: Price-related promotions in the breakfast cereal market, February 2002-January 2004
In-pack promotions generate appeal
Figure 19: In-pack promotions in the breakfast cereal market, February 2002-January 2004
On-pack promotions dominate
Figure 20: On-pack promotions in the breakfast cereal market, February 2002-January 2004
DISTRIBUTION
Multiple grocers span into convenience
Figure 21: UK retail distribution of breakfast cereal, 2001 and 2003
A change of focus
Other channels pose no threat to multiple dominance
THE CONSUMER
Pan-European comparison
Figure 22: Consumption of breakfast cereals, by country, 2003
Overall cereal consumption in GB
Figure 23: Consumption of breakfast cereals in GB, by age and gender, 2003
Figure 24: Consumption of breakfast cereals in GB, by income and working status, 2003
Figure 25: Consumption of breakfast cereals in GB, by region, 2003
Children’s market makes impact
Figure 26: Consumption of breakfast cereals in GB, by presence of children and household size, 2003
 WEIGHT OF USAGE
Frequency of consumption of cold breakfast cereal
Figure 27: Frequency of consuming cold breakfast cereals, 2003
Figure 28: Frequency of consuming cold breakfast cereals, by age and gender, 2003
Figure 29: Frequency of consuming cold breakfast cereals, by yearly income group and working status, 2003
Urbanites skip on breakfast cereal
Figure 30: Frequency of consuming cold breakfast cereals, by region, 2003
Figure 31: Frequency of consuming cold breakfast cereals, by presence of children and household size, 2003
Frequency of consuming hot breakfast cereals
Figure 32: Frequency of consuming hot breakfast cereals, by gender and age, 2003
Age weighs in heavily across other groups
Figure 33: Frequency of consuming hot breakfast cereals, by yearly income group and working status, 2003
Figure 34: Frequency of consuming hot breakfast cereal, by region, 2003
A market polarisation in household types
Figure 35: Frequency of consuming hot breakfast cereals, by presence of children and household size, 2003
 CHILDREN – BREAKFAST HABITS AND BREAKFAST CEREAL
Competition from other breakfast foods
Figure 36: Food regularly eaten for breakfast amongst children aged 7-10, 2003
Figure 37: Food regularly eaten for breakfast amongst youths aged 11-14, 2003
Trending away from cereal
A wider repertoire
How much cereal for kids?
Figure 38: Cereal helpings in a normal week amongst youths aged 7-14, 2003
THE CONSUMER –ATTITUDES AND BEHAVIOUR
 CRITICAL CONSUMER FINDINGS
 OCCASIONS FOR EATING BREAKFAST CEREAL
Figure 39: Occasions for eating breakfast cereal, November 2003
Figure 40: Occasions for eating breakfast cereal (nets), November 2003
Snacking may be taking off
Figure 41: Occasions for eating RTE cereal, by gender, age and socio-economic status, November 2003
A burgeoning base of loyalty
Figure 42: Occasions for eating RTE cereal, by presence of children, lifestage and Mintel’s Special Groups, November 2003
Widespread snacking
Figure 43: Occasions for eating RTE cereal, by marital status, working status and household size, November 2003
Figure 44: Occasions for eating RTE cereal, by region and ACORN categories, November 2003
 ASSESSING ENTHUSIASM FOR BREAKFAST CEREALS
Figure 45: Number of occasions breakfast cereal eaten, November 2003
Single-occasion snackers could present opportunities
Figure 46: Single-occasion breakfast cereal eaters, November 2003
Cross-promotion opportunities?
Figure 47: Number of occasions breakfast cereal eaten, by gender, age and socio-economic status, November 2003
Using health messages and CRM could prove fruitful
Figure 48: Number of occasions breakfast cereal eaten, by lifestage, presence of children and Mintel’s Special Groups, November 2003
Diversity with the retired and part-time workers
Figure 49: Number of occasions breakfast cereal eaten, by working status and household size, November 2003
Figure 50: Number of occasions breakfast cereal eaten, by region and ACORN categories, November 2003
Figure 51: Number of occasions breakfast cereal eaten, by media usage, commercial TV viewing and supermarkets used, November 2003
 BREAKFAST CEREAL ATTITUDES AND PURCHASING BEHAVIOUR
Figure 52: Attitudes towards and purchasing habits for RTE cereals, November 2003
Conservative repertoires for older adults
Figure 53: Attitudes towards and purchasing habits for RTE cereals, by gender, age and socio-economic status, November 2003
Families would turn to multibuy offers
Figure 54: Attitudes towards and purchasing habits for RTE cereals, by lifestage, presence of children and Mintel’s Special Groups, November 2003
One-person households stick to their habits
Figure 55: Attitudes towards and purchasing habits for RTE cereals, by working status and household size, November 2003
Expanding ACORN group and expanding selection
Figure 56: Attitudes towards and purchasing habits for RTE cereals, by region and ACORN categories, November 2003
 TARGETING BREAKFAST CEREAL OCCASIONS
Breakfast routine or variety
Figure 57: Attitudes towards breakfast cereals, by eating occasions, November 2003
Snacking drives repertoires
 IDENTIFYING TARGETS
Overview
Figure 58: Identifying targets: breakfast cereal consumer groups, by gender, age and socio-economic status, November 2003
Brands resonate with older respondents
Figure 59: Identifying targets: breakfast cereal consumer groups, by lifestage, presence of children and Mintel’s Special Groups, November 2003
Figure 60: Identifying targets: breakfast cereal consumer groups, by working status and household size, November 2003
Healthy habits in the South and Scotland
Figure 61: Identifying targets: breakfast cereal consumer groups, by region and ACORN categories, November 2003
Figure 62: Identifying targets: Breakfast cereal consumer groups, by media usage, commercial TV viewing and supermarkets used, November 2003
Healthy cereal swappers look for product and time variety
Figure 63: Number of breakfast cereal eating occasions, by breakfast cereal consumer groups, November 2003
THE FUTURE
Children will dominate
Healthy older adults
Snacking needs more development
Redefinition of ‘health’
Carbohydrate and Atkins?
Lobbying groups will make themselves heard
Indulgence will continue
Smaller packages
FORECAST
Reaching a mature market
Figure 64: Forecast of UK volume and value sales of cereal, at current prices, 2003-07
Figure 65: Forecast of UK retail sales of cereal, at constant 2003 prices, 2003-07
Value-adding the name of the game
Slowdown in evidence even in value terms
Convenience products a must
The bad news – falling numbers of children
The good news – growing affluence helps trading up