Cereal Market Outlook

According to MarketLine reports, the world breakfast cereal industry was worth $28 billion in 2010 and the market growth is expected to increase by 4% per year between 2010 and 2015.

While there are hundreds of manufacturers producing thousands of varieties of cereal products, the industry is dominated by a few large multinational corporations such as General Mills, Quaker Foods, Nestle and Kelloggs.

Europe and the United States are the main consumers of ready to eat cereals. According to research from Global Industry Analysts, around 35% of the global population buys cereal products mostly because of the rising awareness of health benefits and because cereals can be used in an healthy diet. Also, cereal companies provide snack choice as an alternative to less-healthy options with more sugar.

Following the western eating habits, the Asian market increased demand for healthy cereals but it is still the European market that is the leader for bakery and cereals. Moreover, Business Insights research shows that the market is expected to record a 2.5% yearly growth to generate sales of $185 billion in 2013.

We understand that consumers’ eating habits are taking into account by companies. Manufacturers are limiting bad ingredients such as sugar, fat and sodium in their products for offering functional bakeries and healthier cereal products free of trans fats.

They propose products with nutritious ingredients including whole grains, and limiting the calorie count of products and selling calorie-counted portion packs.

There is a strong competition and they try to differentiate their products by creating different cereals at low prices and enlarging the offer. Product differentiation is highlighted by marketing targeting for example children with toys in boxes, mascots, cartoon appearances in commercials and games on the back of cereal boxes.

To focus on the market of healthy cereals, women are reached with strong campaigns showing the benefits of the products on their bodies but also on their mental well-being. The demand for a balanced and healthy lifestyle led manufacturers to produce more organic and specialty food products.