For years, the breakfast cereal industry has been criticised for manufacturing cereals with few nutritional benefits, gratuitous amounts of sugar and lots of artificial colours.
The critiques were not only targeted at the nutritional value of cereal but also at the category’s profitability.
There was a time when cereal went unchallenged as the most popular breakfast food. Recently, however, alternatives such as protein bars and Greek yoghurt have started to replace cereal in the average person’s diet.
Now, manufacturers are upgrading their products by offering healthier cereals with more convenient packaging. Breakfast cereals haven’t completely evolved yet, but a lot has changed on Aussie shelves.
Aglo’s shoppers visited different Coles and Woolworths across the country and photographed hundreds of cereal displays. These photos reveal some important industry trends, as well as consumer and market insights for this category.
Here are a few ways cereal manufacturers are bringing about positive change and improving profitability.
Breakfast cereal shelves used to display only products made of corn and sugar. Now, shoppers find cereal made of different seeds and grains, from oats to more unique varieties such as granola, chia and quinoa.
As a result, the range of cereals has expanded enormously and now offers a diverse product portfolio on the shelf.
Cereal manufacturers were slow to innovate at first. But since other breakfast foods have become more competitive, they’ve been pressured into investing heavily in consumer research and product development.
Brand managers understand many consumers have been shifting toward a healthier lifestyle, avoiding excess sugar and carbohydrate consumption. Many have made moves to upgrade their product formulas to include better quality, natural ingredients.
Even muesli, which is considered by many to be one of the healthier cereal options, is being influenced by this trend. We spoke to Inna Kiner, the creator of InnaMuse, about the nutritional quality of muesli. She says:
‘Health is the no. 1 reason I started making my own muesli, simply because everything on a supermarket shelf was sickly sweet. Today, I feel the options for an actually healthy granola are certainly improving, but a lot of products are still making false claims about how healthy they are, without being honest about how much sugar or added fat is in them‘.
These improvements have not only benefited consumers but also the category’s value, since shoppers are willing to pay higher prices for better products.
As far as packaging is concerned, the breakfast cereal category has evolved tremendously. The introduction of easy-open and on-the-go packaging has made cereals more attractive for time-poor consumers.
You’ll still see family-size boxes on the shelf, but now you’ll also find plenty of single portion, on-the-go and biodegradable options. These new packaging solutions have not only contributed to better perceptions of the category but also to its increased presence in many households.
Most brands have also made great efforts to improve their packaging designs, resulting in a more modern, premium look and feel in many cases.
InnaMuse has adopted packaging with the following features:
- Recyclable brown paper packaging
- A simple, easy to read and understand label
- Packaging lined with foil to ensure freshness
- Zip-lined package for easy re-seal
This kind of attention to design and function makes cereal a much more attractive snack and breakfast option for today’s consumers.
Products with added value create more opportunities to increase prices.
It’s pretty simple logic: when shoppers place greater value on brands and products, they’re willing to pay more. Manufacturers understand this very well, and they’re now profiting from product and packaging improvements.
It’s possible to see cereals in Coles and Woolworths ranging from 0.75 cents to 22 dollars a kilo. What’s more interesting is the cereals with added value have more shelf space than the basic versions.
This is a positive indication of a valuable category. The opposite has happened in the commoditised categories mentioned in our blog about the role of category captains.
If you want to see more market insights, category trends and consumer insights, sign up to Aglo Community Galleries. In minutes, you can visit hundreds of stores virtually and see for yourself what’s happening in your category.
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