Hey all, we’re back.
Apologies for the delay in getting the final installment of UnbelievaBOWL: The Current State of Cereal to you – but the blog life isn’t easy. SBA’s been busy over the last few weeks. In fact, how about a shameless plug for the awesome project that took the cereal team out of the grocery aisles?
Check out what we’ve been up to in this AdWeek article.
Awesome, right? But now – back to the regularly scheduled breakfast broadcast.
The best part of eating cereal is always that last, final slurp of milk that empties the bowl, right?
Well – consider this to be the final slurp.
Over the last few weeks, we’ve spent some time really digging into breakfast – specifically, cereal. In the first installment of the series, we learned that although overall sales are slowing, gluten free, non-GMO, organic and/or cereals containing ancient grains are on the rise. Consumer preference is shifting and in UnbelievaBOWL: The Current State of Cereal – Part Two, we learned that the Smith Brothers teams’ preferences reflect that trend – with new BFY cereal options overtaking taking traditional cereal brands in an agency-wide taste test.
Ultimately though, the truth of the cereal aisle lies in the sales figures. According to a report by Mintel, cereal sales in 2014 were $11 billion, with cold cereal representing 87% or $9.6 billion. And although the market is shrinking, that’s still a pretty big figure. Cereals sold within natural channels, while on the rise, only topped at $121 million in 2013.
So it looks like, although our own agency testers prefer the BFY cereals, the general public is still spending most of its cereal dollars on classics from General Mills, Kellogg’s and Post. In fact, data from IRI shows that Honey Nut Cheerios (General Mills), Frosted Flakes (Kellogg’s) and Honey Bunches of Oats (Post) were the top three cereal brands sold in the United States in 2014.
But even these legacy brands are noticing changing consumer perceptions – and are taking steps to make themselves appear a little healthier.
For example, when you check out the Honey Nut Cheerios’ website the first message you’ll see is a reminder to “Bee Happy. Bee Healthy.” and a pretty quick callout of the cereal’s vitamins, minerals, grains and health benefits. And while the brand doesn’t quite make the same heart health claims as its plain older brother, Cheerios, it doesn’t necessarily make an effort to distance itself from that message either.
And those heart-healthy original Cheerios are GMO-free, which is great. But it’s really only because, according to General Mills, genetically modified oats just aren’t available. Other Cheerio varieties, like Honey Nut Cheerios, contain other grains or sugars that may be grown from genetically modified seed.
As a leader in the space – Honey Nut Cheerios is working hard to highlight its benefits, putting health-focused messaging at the forefront of its branded identity and hoping to shine under the halo of the much healthier Cheerios brand. However, as the best-selling cereal in the country, it’s not willing to do much to alter its recipe in favor of real health benefits. A fair amount of sugar – 9 grams per ¾ cup serving – makes Honey Nut Cheerios taste great, but does so at the expense of many of the brand’s overall perceived healthfulness.
Casting away from the most popular cereal in the country, the hunt continues for a mainstream healthy cereal option.
Special K, a Kellogg’s brand, could really be seen as the biggest success. In addition to relatively healthy ingredients – the brand has gone beyond the kitchen table and has owned the message of a healthy lifestyle across all of its advertising, challenging its consumers to rise up and meet the Special K Challenge.
As a cornerstone to the challenge, it’s critical to continue to eat Special K products throughout the day – and as a leader in this healthy-lifestyle cereal space, Special K has leveraged the power of its brand and innovated, creating an entire product line of healthy options – from breakfast cereals and smoothies to snack chips and brownies.
But unlike Honey Nut Cheerios, the health benefits of Special K are actually pretty real – and coupled with the brand’s lifestyle messaging, there is an overall identity that’s honest and honestly good. With or without a full line of healthy products, that combo is something for which all cereal manufacturers should strive.
So, as we begin to really swirl around the bottom of the cereal bowl – what does it all mean?
It’s likely going to continue to be a difficult road for cereal manufacturers. For too long traditional cereal brands have relied on cartoon characters and bright colored boxes. They’re going to have to make a shift and figure out exactly how to win back consumers. They’re going to need to re-investigate exactly why people enjoy cereal – and why others just don’t. It’s not going to be enough to reintroduce, repackage or reposition the same old cereals. They’re going to have to look critically, and potentially consider real change.
But it’s going to be an uphill battle. We’ve got more ready-to-eat breakfast options than ever before and are increasingly likely to consider taking our dollars to fast food restaurants or coffee shops. We’re better educated and won’t swallow the same sugary, artificially flavored breakfasts forever.
But these challenges in CPG are exciting. They’re what motivate not only product innovation and manufacturing changes, but also agencies like ours who take these new products to market.
At Smith Brothers, we’re happy to be finishing our breakfast and are ready to get started tackling whatever challenges tomorrow morning brings.