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Breakfast Cereals - UK - August 2011

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Forecast
Figure 1: UK retail value sales of breakfast cereals, 2006-16
Market factors
The breakfast occasion is hotly competed
Cold winters drive hot
Questions about healthiness of cereals raised by the media
Cost pressures drive up prices
Companies, brands and innovation
Figure 2: Market share of breakfast cereals, by brand, 2010
New healthy innovation in the children’s segment
The presence of major players drives high ad spend
The consumer
Nine in ten adults eat breakfast cereals
Sugar and fibre content are top choice factors
Figure 3: Factors taken into consideration when choosing breakfast cereal, June 2011
Newness can engage half of cereal eaters
Figure 4: Attitudes towards breakfast cereals, June 2011
Packaging sparks consumer interest
Figure 5: Agreement with the statement, “I would prefer my cereal to have less packaging”, June 2011
What we think
ISSUES IN THE MARKET
Do breakfast cereals need to improve their health image?
What impact are Ofcom’s regulations having on the market?
How can more men be attracted to porridge?
Is there further potential for more indulgent cereals?
FUTURE OPPORTUNITIES
Trend: Make it Mine
Trend: Many Mes
INTERNAL MARKET ENVIRONMENT
Key points
Fibre enjoys strong appeal...
Figure 6: Agreement with the statement “I try to include plenty of fibre in my diet these days”, by age group, 2010
… although interest in many health considerations is decreasing
Figure 7: Agreement with the statement “I am prepared to pay more for foods that don’t contain artificial additives”, 2006-10
Average working hours in decline
Figure 8: Trends in average working hours, per day, 2006-10
Big freeze(s) benefit porridge
Figure 9: Mean winter* temperatures, UK, 2006-10
BROADER MARKET ENVIRONMENT
Key points
Oat and wheat prices leap
Figure 10: Weekly prices of cereals, England and Wales, January 2008-May 2011
Milk prices dip under supermarket competition
Figure 11: RPI for fresh milk, January 2008-April 2011
Nutrient Profiling Model presents an ongoing challenge
Demographic changes affect the market
Figure 12: Projected trends in the UK population, by age group, 2011-16
Figure 13: Consumer Confidence Index, monthly, January 2007-May 2011
COMPETITIVE CONTEXT
Key points
Toast poses strong competition to cereals at breakfast
Figure 14: Breakfast items eaten in the home, June 2011
… and has the weight of the bread market behind it
Figure 15: UK value sales of selected foods competing with breakfast cereals, 2006-10
Fruit has limited but healthy appeal
Younger consumers choose cooked breakfast
Figure 16: Cooked breakfast consumption, by age group, June 2011
Modern offerings have youth appeal
Figure 17: Selected items eaten for breakfast at home, 16-24-year-olds, June 2011
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Weetabix and Kellogg’s crack the NPM code with chocolate innovation
Kellogg’s ups efforts in NPD
Figure 18: New product development in the UK cereals market by top 20 companies, January 2008-May 2011*
… but Weetabix reduces the number of launches
Cereal gets chocoholic
Figure 19: New product development in the UK cereals market, top ten flavours, 2009 and 2010
Cold cereals dominate NPD
Figure 20: NPD in UK breakfast cereals, cold vs hot cereals, 2008-11
… as hot cereals enhance instant appeal
Own-label NPD on the up
Figure 21: New product development in the UK cereals market, by private-label, 2009-10
Porridge gets an urban makeover
MARKET SIZE AND FORECAST
Key points
Cereal sales plateau
Figure 22: UK retail value and volume sales for total breakfast cereals, 2006-16
Sales dip in 2010
Cold cereals in modest growth
Big freeze factor
Figure 23: Hot cereal sales value vs mean winter temperature, 2006-10
The future of the market
Breakfast cereal market forecast
Figure 24: Value sales for total breakfast cereals, 2006-16
Forecast methodology
SEGMENT PERFORMANCE
Key points
Cold cereals
Figure 25: UK retail value sales of cold and hot breakfast cereal, 2006-11
Hot cereals
Figure 26: Year-on-year % change in cold and hot breakfast cereal market values, 2007-11
Cold cereal volume sales under pressure
Figure 27: UK retail volume sales of cold and hot breakfast cereal, 2006-11
MARKET SHARE
Key points
Special K is the biggest brand
Figure 28: Market share of breakfast cereals, by brand, 2010
Figure 29: Market share and sales value of breakfast cereals, by brand, 2008-10
Porridge power
Dorset’s solid sales
Own-label plays a limited role in breakfast cereals
COMPANIES AND PRODUCTS
Figure 30: Selected leading companies in the breakfast cereal market in the UK and their brands, 2011
Kellogg’s
Corn Flakes
Special K
Figure 31: New product development by Kellogg’s, January 2010-May 2011
Coco Pops
Figure 32: New product development by Kellogg’s, January 2010-May 2011
Weetabix
Figure 33: New product development by Weetabix, January 2010-May 2011
Alpen
Figure 34: New product development by Weetabix, January 2010-May 2011
Dorset Cereals
Figure 35: Key new product development by Dorset Cereals, January 2010-May 2011
Jordans
Figure 36: Key new product development by Jordans, January 2010-May 2011
Cereal Partners
Figure 37: New product development by Cereal Partners, January 2010-May 2011
BRAND RESEARCH
Brand map
Figure 38: Attitudes towards and usage of breakfast cereal brands, June 2011
Brand attitudes
Figure 39: Attitudes by breakfast cereal brand, June 2011
Brand personality
Figure 40: Breakfast cereal brand personality – macro image, June 2011
Figure 41: Breakfast cereal brand personality – micro image, June 2011
Correspondence analysis
Brand experience
Figure 42: Breakfast cereal brand usage, June 2011
Figure 43: Satisfaction with various breakfast cereal brands, June 2011
Figure 44: Consideration of breakfast cereal brands, June 2011
Figure 45: Consumer perceptions of current breakfast cereal brand performance, June 2011
Figure 46: Breakfast cereal brand recommendation – Net Promoter Score, June 2011
Brand index
Figure 47: Breakfast cereal brand index, June 2011
Figure 48: Breakfast cereal brand index vs. recommendation, June 2011
Target group analysis
Figure 49: Target groups, June 2011
Figure 50: Breakfast cereal brand usage, by target groups, June 2011
Group One – The Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – The Individualists
BRAND COMMUNICATION AND PROMOTION
Key points
Ad spend remains steady
Figure 51: Topline advertisement spend in the UK breakfast cereals market, 2006-10
Kellogg’s dominates but Weetabix punches above its weight
Figure 52: Advertisement expenditure in the UK cereal market, by top 10 companies, January 2009-March 2011
Ofcom rules hit TV and press
Figure 53: Advertisement expenditure in the UK cereal market, by media type, January 2009-March 2011
CHANNELS TO MARKET
Key point
The multiples dominate the cereal market
Figure 54: UK retail value sales of breakfast cereals, by outlet type, 2008-10
CONSUMER – BREAKFAST CEREALS USAGE
Key points
Breakfast cereal has widespread appeal
Figure 55: Trends in frequency of using breakfast cereals, 2009-10
Figure 56: Frequency of use of breakfast cereals, men vs women, 2010
Families are the most likely to use cereals
Figure 57: Frequency of using breakfast cereals, by lifestage, 2010
Figure 58: Overall and heavy usage of breakfast cereals, by age of children in the household, 2010
Figure 59: Frequency of using breakfast cereals, by age group, 2010
CONSUMER – TYPES OF BREAKFAST CEREAL EATEN
Key points
Old favourites like cornflakes and porridge dominate consumption
Figure 60: Types of breakfast cereal eaten, June 2011
Wholegrain divides the age groups
Bran lags behind
Low-fat cereal consumption rises with affluence
Figure 61: Usage of low fat breakfast cereals, by gross annual household income, June 2011
CONSUMER – CHOICE FACTORS
Key points
Sugar is top concern
Figure 62: Factors taken into consideration when choosing breakfast cereal, June 2011
Sugar level is the most common consideration
Women are more health-led than men in cereal choices
Men are more likely to prioritise brand
Health considerations rise with wealth and age
Figure 63: Importance of sugar, fibre and fat content as factors when choosing breakfast cereal, by selected socio-economic groups, June 2011
Natural and organic are low priorities
CONSUMER – ATTITUDES TOWARDS BREAKFAST CEREALS
Key points
Consumers are not wanting for choice…
Figure 64: Attitudes towards breakfast Cereals, June 2011
Packaging proves a sticking point
Figure 65: Agreement with the statement, “I would prefer my cereal to have less packaging”, June 2011
Own-label vs branded quality
Figure 66: Agreement with the statement, “own-label cereals are no different from the branded ones”, June 2011
Nutrition information an important feature
Figure 67: Agreement with the statement “I check out nutritional information on cereals before I buy” by gender, June 2011
Multipacks face challenges
CONSUMER – TARGET GROUPS
Key points
Figure 68: Target groups based on attitudes towards breakfast cereals, June 2011
Traditionalists (20%)
Experimenters (26%)
Own-label Fans (26%)
Brand Buyers (28%)
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 69: Agreement with selected lifestyle statements on diet and health, 2006-10
Figure 70: Agreement with selected lifestyle statements on diet and health, by demographics, 2010
Figure 71: Trends in frequency of using breakfast cereals, 2009-10
Figure 72: Frequency of using breakfast cereals, by demographics, 2010
Figure 73: Trends in average working hours, 2006-10
Figure 74: Mean winter* temperatures, UK, 2005-10
Figure 75: Weekly prices of cereals, England and Wales, January 2008-May 2011
Figure 76: RPI for fresh milk, January 2008-April 2011
APPENDIX – COMPETITIVE CONTEXT
Figure 77: Most popular items eaten for breakfast in the home, by demographics, June 2011
Figure 78: Next most popular items eaten for breakfast in the home, by demographics, June 2011
Figure 79: Other items eaten for breakfast in the home, by demographics, June 2011
Figure 80: Most popular items eaten for breakfast out of the home, by demographics, June 2011
Figure 81: Next most items eaten for breakfast out of the home, by demographics, June 2011
Figure 82: Other items eaten for breakfast out of the home, by demographics, June 2011
Figure 83: Competing products with breakfast cereals, by sales value, UK, 2006-10
APPENDIX – WHO’S INNOVATING?
Figure 84: New product development in the UK cereals market by top 20 companies, January 2008-May 2011*
Figure 85: New product development in the UK cereals market, by flavour, 2009 and 2010
Figure 86: New product development in the UK cereals market by sub-category, January 2008-May 2011
Figure 87: New product development in the UK cereals market by private label, January 2008-May 2011
APPENDIX – MARKET SIZE AND FORECAST
Figure 88: Forecast of value sales for total breakfast cereals, 2006-16
Figure 89: UK retail value and volume sales for total breakfast cereals, 2006-16
Figure 90: Additional best case/worst case table for breakfast cereals, 2011/16
Figure 91: Forecast of UK retail sales of cold cereals, by value, 2006-16
Figure 92: Value sales for cold breakfast cereals, 2006-16
Figure 93: Forecast of UK retail sales of hot cereals, by value, 2006-16
Figure 94: Value sales for hot breakfast cereals, 2006-16
APPENDIX – MARKET SHARE
Figure 95: Market share and sales value of breakfast cereals, by brand, 2008-10
APPENDIX – SEGMENT PERFORMANCE
Figure 96: UK retail value sales of cold and hot breakfast cereal, 2006-11
Figure 97: UK retail volume sales of cold and hot breakfast cereal, 2006-11
APPENDIX – BRAND RESEARCH
Figure 98: Brand usage, June 2011
Figure 99: Brand commitment, June 2011
Figure 100: Brand diversity, June 2011
Figure 101: Brand satisfaction, June 2011
Figure 102: Brand recommendation, June 2011
Figure 103: Brand attitudes, June 2011
Figure 104: Brand image – macro image, June 2011
Figure 105: Brand image – micro image, June 2011
Figure 106: Profile of target groups, by demographics, June 2011
Figure 107: Psychographic segmentation, by target group, June 2011
Figure 108: Brand usage, by target group, June 2011
Figure 109: Brand index, June 2011
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 110: Topline advertising expenditure in the UK cereal market, January 2006-March 2011
Figure 111: Advertising expenditure in the UK cereal market, by product sub-category, January 2009-March 2011
Figure 112: Advertising expenditure in the UK cereal market, by media type, January 2009-March 2011
Figure 113: Advertising expenditure in the UK cereal market, by top 10 companies, January 2009-March 2011
APPENDIX – CHANNELS TO MARKET
Figure 114: UK retail value sales of breakfast cereals, by outlet type, 2008-10
APPENDIX – CONSUMER – BREAKFAST CEREALS USAGE
Figure 115: Frequency using breakfast cereals, by demographics, 2010
APPENDIX – CONSUMER – CHOICE FACTORS
Figure 116: Most popular important factors when choosing breakfast cereal, by demographics, June 2011
Figure 117: Next most popular important factors when choosing breakfast cereal, by demographics, June 2011
Figure 118: Other important factors when choosing breakfast cereal, by demographics, June 2011
APPENDIX – CONSUMER – TYPES OF BREAKFAST CEREAL
Figure 119: Most popular types of breakfast cereal eaten, by demographics, June 2011
Figure 120: Next most popular types of breakfast cereal eaten, by demographics, June 2011
APPENDIX – CONSUMER – ATTITUDES TOWARDS BREAKFAST CEREALS
Figure 121: Agreement with the statements ‘I get bored of eating the same cereal every day’ and ‘Own-label cereals are no different from the branded ones’, by demographics, June 2011
Figure 122: Agreement with the statements ‘I only buy branded cereal (eg Kellogg’s Corn Flakes)’ and ‘I often don’t have time for breakfast at home’, by demographics, June 2011
Figure 123: Agreement with the statements ‘I give my children dry breakfast cereal as a snack’ and ‘I tend to eat my breakfast cereal with fresh fruit or yogurt’, by demographics, June 2011
Figure 124: Agreement with the statements ‘I use breakfast cereals as an ingredient in cooking/baking’ and ‘I use breakfast cereals as a dessert topping’, by demographics, June 2011
Figure 125: Agreement with the statements ‘I have eaten the same cereal since I was young’ and ‘I think there is enough choice in the breakfast cereal aisle’, by demographics, June 2011
Figure 126: Agreement with the statements ‘There is enough choice for me to always find the cereal I want’ and ‘I often like to try out new cereals’, by demographics, June 2011
Figure 127: Agreement with the statements ‘I would prefer my cereal to have less packaging’ and ‘I check out nutritional information on cereals before I buy’, by demographics, June 2011
Figure 128: Agreement with the statement ‘Individual multipack cereal boxes are too small’, by demographics, June 2011
APPENDIX – CONSUMER – TARGET GROUPS
Figure 129: Target groups, by demographics, June 2011

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