Breakfast Cereals - UK - August 2018

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Small upturn in sales of breakfast cereals
Value sales growth forecast but small dip expected in volume sales
Figure 1: UK retail value sales of breakfast cereals, 2013-23
Decline in RTE cereals halted
Strong sales performance for hot cereals
Big focus on sugar reduction
Breakfast eating habits have big influence
Growth of over-55s to benefit in-home breakfasts
Companies and brands
Own-label gaining ground in RTE cereals
Figure 2: Leading manufacturers’ shares in the UK RTE cereals market, by value, 2017/18**
PepsiCo retains top position in hot cereals
Figure 3: Leading manufacturers’ shares in the UK hot cereals market, by value, 2017/18*
Sugar reduction central to NPD
W.K. Kellogg hopes to tap into interest in plant-based foods
Protein launches a continuing theme
The consumer
Vast majority of people eat breakfast cereals
Figure 4: Usage of different types of breakfast cereals, June 2018
Plain cereal is the most popular individual type
Half of users eat cereal most days
Figure 5: Frequency of eating breakfast cereals, June 2018
Consumers are looking for less sugar in cereals
Figure 6: Attributes looked for on packaging when choosing breakfast cereals, June 2018
Strong interest in on-the-go and snack packs
Adding variety to cereal through pots of toppings
Figure 7: Interest in breakfast cereals products, June 2018
Cereals are an energy boost or guilt-free treat
Many people add extra ingredients to breakfast cereal
Figure 8: Behaviours and preferences related to breakfast cereals, June 2018
Breakfast cereals enjoy strong overall perceptions
Figure 9: Correspondence Analysis of qualities associated with different types of breakfast cereals, June 2018
What we think
ISSUES AND INSIGHTS 
Room to drive cereals as a snack and for out-of-home occasions
The facts
The implications
People’s love of toppings can help keep breakfast cereal interesting
The facts
The implications
Breakfast cereals are in good place to promote nutritional value of products
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Total breakfast cereals sales show small upturn in 2017
Value sales growth forecast but small dip expected in volume sales
Small increase in value sales of RTE cereals
Sugar-related concerns will hold back volume sales
Hot cereals segment goes from strength to strength
Sugar reduction a big focus in category
Eating breakfast out of home works against breakfast cereals
People skipping breakfast poses a threat to cereals
Growth of over-55s to benefit in-home breakfasts
Catering for on-the-go 25-44-year-olds
MARKET SIZE, SEGMENTATION AND FORECAST
Total breakfast cereals sales show small upturn in 2017
Figure 10: UK retail sales of breakfast cereals, by value and volume, 2013-23
Figure 11: UK retail value sales of breakfast cereals, 2013-23
RTE cereals show small increase in value sales in 2017
Figure 12: UK retail sales of RTE cereals, by value and volume, 2013-23
Figure 13: UK retail value sales of RTE cereals, 2013-23
Hot cereals segment goes from strength to strength
Figure 14: UK retail sales of hot cereals, by value and volume, 2013-23
Figure 15: UK retail value sales of hot cereals, 2013-23
Forecast methodology
MARKET DRIVERS
Breakfast cereals tasked with 20% sugar reduction by 2020
PHE sugar reduction targets
Initiatives from leading players
Push to cut sugar also coming from consumers
Figure 16: Top five factors deemed important when looking for healthy food, November 2017
PHE puts new focus on calorie consumption
Eating breakfast out of home works against breakfast cereals
Figure 17: Breakfast items typically eaten at home and out of home, May 2018
People skipping breakfast poses a threat to cereals
Population trends
Growth of over-55s to benefit in-home breakfasts
Catering for on-the-go 25-44-year-olds
Room for more healthy cereals for children
Figure 18: Trends in age structure of the UK population, 2012-22
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Own-label gains share in RTE cereals
PepsiCo retains top position in hot cereals
Sugar reduction central to NPD
W.K. Kellogg hopes to tap into interest in plant-based foods
Protein launches a continuing theme
Expanding choice of flavours
10% increase in 2017 advertising spending
Weetabix stands for quality and good value
Quaker Oats has strong association with health and wellbeing
Cheerios and Shreddies seen as fun brands
MARKET SHARE
Own-label gains share in RTE cereals
Figure 19: Leading brands’ sales and shares in the RTE cereals market, by value and volume, 2016/17 and 2017/18
Figure 20: Leading manufacturers’ sales and shares in the UK RTE cereals market, by value and volume. 2016/17-2017/18
PepsiCo retains top position in hot cereals
Figure 21: Leading brands’ sales and shares in the UK hot cereals market, by value and volume, 2016/17-2017/18
Figure 22: Leading manufacturers’ sales and shares in the UK hot cereals market, by value and volume, 2016/17-2017/18
LAUNCH ACTIVITY AND INNOVATION
Sugar reduction central to NPD
Kellogg’s cuts sugar in 2018
Nestlé Cereal Partners sets targets for end of 2018
L/N/R sugar claims leap ahead
Figure 23: Examples of breakfast cereal launches making no added sugar claims, 2018
Low/reduced sugar claims remain rare
Figure 24: Examples of breakfast cereal launches making low sugar claims, 2018
W.K. Kellogg range hopes to tap into interest in plant-based foods
Figure 25: Products from the new W.K. Kellogg breakfast cereals range, 2018
Protein launches are a continuing theme
Figure 26: Examples of breakfast cereal launches making high/added protein claims, 2017 and 2018
Free-from claims increase again in first half of 2018
Brands continue to dominate free-from launches
Figure 27: Examples of breakfast cereal launches making gluten-free claims, 2017 and 2018
Expanding choice of flavours
Established brands widen their ranges
Figure 28: Examples of new flavours in breakfast cereal launches, 2017 and 2018
New flavours range from dessert themes to vegetables
Figure 29: Examples of new flavours and ingredients in breakfast cereal launches, 2017 and 2018
Jordans launches Grin-ola - its first kids’ range
Figure 30: Examples of children’s breakfast cereal launches, 2017
Kellogg’s doubling vitamin D in its cereals
Breakfast drinks competing with cereals
Figure 31: Examples of breakfast drink launches, 2017 and 2018
ADVERTISING AND MARKETING ACTIVITY
10% increase in 2017 advertising spending
Figure 32: Total above-the line, online display and direct mail advertising expenditure on breakfast cereals, 2014-18
Kellogg’s increases advertising
‘Perfect bowl’ campaign for Kellogg’s Corn Flakes
Crunchy Nut focuses on unusual eating situations
Special K spotlights powering women every day
Marketing support for new W.K. Kellogg range focuses on ‘plant power’
Figure 33: Total above-the line, online display and direct mail advertising expenditure on breakfast cereals, 2014-18
Nestlé reduces spending on Shredded Wheat and Shreddies
Cheerios promotes nutritious breakfasts for kids
Shreddies strikes a humorous tone
Quaker Oats puts biggest focus on Oat So Simple
Weetabix increases adspend
‘Have you had your Weetabix?’ strapline returns
Alpen puts focus on authentic Alpine roots
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 34: Attitudes towards and usage of selected brands, June 2018
Key brand metrics
Figure 35: Key metrics for selected brands, June 2018
Brand attitudes: Weetabix and Kellogg’s Corn Flakes the most trusted brands
Figure 36: Attitudes, by brand, June 2018
Brand personality: Cheerios seen as the most fun brand
Figure 37: Brand personality – macro image, June 2018
Kellogg’s Corn Flakes and Quaker Oats deemed most traditional brands
Figure 38: Brand personality – micro image, June 2018
Brand analysis
Weetabix stands for quality and good value
Figure 39: User profile of Weetabix, June 2018
Quaker Oats has strongest association with health and wellbeing
Figure 40: User profile of Quaker Oats, June 2018
Kellogg’s Corn Flakes is widely seen as a traditional and accessible brand
Figure 41: User profile of Kellogg’s Corn Flakes, June 2018
Natural image is a key strength of Jordans
Figure 42: User profile of Jordans, June 2018
Perceptions of being healthy and natural are key strengths for Alpen
Figure 43: User profile of Alpen, June 2018
Cheerios seen most widely as a fun brand
Figure 44: User profile of Cheerios, June 2018
Special K seen widely as caring for health and wellbeing
Figure 45: User profile of Special K, June 2018
Shreddies’ strengths are being a fun, family brand
Figure 46: User profile of Shreddies, June 2018
THE CONSUMER – WHAT YOU NEED TO KNOW 
Vast majority of people eat breakfast cereals
Plain cereal is most popular individual type
Half of users eat cereal most days
Consumers are looking for less sugar in cereals
Other nutritional benefits also important
Strong interest in on-the-go and snack packs
Adding variety to cereal through pots of toppings
Cereals as an energy boost or guilt-free treat
Many people add extra ingredients to breakfast cereal
Breakfast cereals enjoy strong overall perceptions
USAGE OF BREAKFAST CEREALS
Vast majority of people eat breakfast cereals
Figure 47: Usage of breakfast cereals, by type, June 2018
Women more likely to eat porridge/oats than men
Plain cereal is the most popular individual type
Figure 48: Variants of breakfast cereals typically eaten, June 2018
Convenient formats are well established in porridge/oats
Figure 49: Formats of porridge/oats typically eaten, June 2018
FREQUENCY OF EATING BREAKFAST CEREALS
Half of users eat cereals most days
Figure 50: Frequency of eating breakfast cereals, June 2018
Porridge/oats eaten less frequently
ATTRIBUTES DEEMED IMPORTANT FOR BREAKFAST CEREALS
Consumers are looking for less sugar in cereals
NPD leaps ahead, fuelled by no added sugar claims
Figure 51: Attributes looked for on packaging when choosing breakfast cereals, June 2018
High fibre looked for by four in 10 eaters of cereals
Other nutritional benefits also important
INTEREST IN BREAKFAST CEREALS PRODUCTS
Strong interest in on-the-go and snack packs
Interest bodes well for cereals to stay on the menu for out-of-home breakfast
Figure 52: Interest in breakfast cereals products, June 2018
Adding variety to cereal through pots of toppings
More than a fifth are drawn to toppings
Scope to better leverage in-store positioning
Custom-made cereal interests 19%
BEHAVIOUR AND PREFERENCES
Breakfast cereals are seen widely as an energy boost and guilt-free treat
Low perception of cereals as snacks
Cereals enjoy a strong treat image
Figure 53: Behaviours and preferences related to breakfast cereals, June 2018
Many people add extras to breakfast cereal
Need for more excitement for the weekend
Speed is of the essence for much of the week
QUALITIES ASSOCIATED WITH BREAKFAST CEREALS
Breakfast cereals enjoy strong overall perceptions
Figure 54: Correspondence analysis of qualities associated with different types of breakfast cereals, June 2018
Muesli seen most widely as source of vitamins and minerals
Porridge seen as best for keeping you full for longer
Figure 55: Qualities associated with different types of breakfast cereals, June 2018
Methodology
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE, SEGMENTATION AND FORECAST
Figure 56: UK retail volume sales of breakfast cereals, 2013-23
Figure 57: Best- and worst-case forecast of total UK retail value sales of breakfast cereals, 2018-23
Figure 58: Best- and worst-case forecast of total UK retail volume sales of breakfast cereals, 2018-23
Figure 59: UK retail volume sales of RTE cereals, 2013-23
Figure 60: Best- and worst-case forecast of total UK retail value sales of RTE cereals, 2018-23
Figure 61: Best- and worst-case forecast of total UK retail volume sales of RTE cereals, 2018-23
Figure 62: UK retail volume sales of hot cereals, 2013-23
Figure 63: Best- and worst-case forecast of total UK retail value sales of hot cereals, 2018-23
Figure 64: Best- and worst-case forecast of total UK retail volume sales of hot cereals, 2018-23
Forecast methodology
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 65: New product launches in the UK breakfast cereals market, by claim (sorted by 2017), 2014-18
Figure 66: New product launches in the UK breakfast cereals market, by company (sorted by 2017), 2014-18
Figure 67: New product launches in the UK breakfast cereals market, by branded and private label, 2014-18
Figure 68: New product launches in the UK breakfast cereals market, by sub-category, 2014-18