Ready to Eat Cereals to Boost the Global Breakfast Cereals Market

Published On : Sep 10, 2014

The global breakfast cereals market is estimated to grow at 4.1% CAGR between the years 2013 and 2019. This market is primarily driven by a shift of focus towards healthy breakfast alternatives and changing breakfast habits especially in the Asian economies. Also, factors like changes in lifestyles and increasing per capita incomes in Asia fuel the breakfast cereals market.

Due to greater focus on on-the-go breakfast alternatives like cereal bars and traditional breakfast, the breakfast cereals market in the developed countries tends to reach a saturation point. The processed food market is driven by people’s higher need for convenience due to their busy and hectic lifestyles. And this in turn, increases the demand for breakfast cereals.

The current Asian breakfast trend is characterized by higher demand for packaged breakfast cereals as against the conventional type of breakfast. Greater health awareness is a significant factor that has globally increased the importance of healthy breakfast alternatives. Over the past few years, the per capita breakfast consumption has increased worldwide and the breakfast skipping trend has witnessed a decline.

Global Breakfast Cereals Market - Market Segmentation

The global breakfast cereals market is segmented on the basis of hot cereals and ready-to-eat (RTE) cereals. The type of breakfast cereal determines whether they are consumed in dry, hot or cold forms. Hot cereals need to be prepared before consumption and RTE cereals can be consumed directly since they are already prepared. The growth rate of hot cereals is expected to be higher in comparison to RTE cereals. Breakfast cereals are considered to be ideal in terms of calorific value and nutrition. The manufacturing of breakfast cereals entails processing of grains.

In 1985, Kellogg’s was the first to introduce cornflakes in the breakfast cereals market. Due to its health benefits, cornflakes became the favorite breakfast food in the US and gradually, this trend started spreading to the other parts of the world like Europe and the North America. The popularity of RTE cereals can be observed mainly in the countries of Europe and North America due to the fast paced hectic lifestyles of the people there. RTE cereals consumption in these countries comprises greater than 85% of the total breakfast cereals consumption.

It is estimated that the share of hot cereals in the breakfast cereals market will increase globally by the year 2019, due to the trend in the Asian economies of consuming hot breakfasts.

Factors Driving and Inhibiting the Growth of the Global Breakfast Cereals Market

The breakfast cereals markets in developing countries like India and China have high growth potential because of high population density. Rising demand for breakfast cereals in these markets can be owed to changes in food habits. Globally, the breakfast cereals market is led by Kellogg’s followed by PepsiCo and General Mills. The domination of these three players in the breakfast cereals market is on the rise due to economies of scale, established brands and greater emphasis on knowledge for innovation.

Increasing importance of healthy eating habits and healthy living prompts the key market players to launch new breakfast cereal products suiting the tastes and preferences of different age groups and their respective lifestyles.

Some of the major issues being faced by the global breakfast cereals market include input procurement issues due to concerns relating to environment standards. The procurement of palm oil is one such issue. Rising energy and commodity prices are also problems facing the breakfast cereals market.

This breakfast cereals market is also witnessing lower demand for breakfast cereals due to greater consumer preference for alternative breakfast items like toasts, fruits, eggs and cereal energy bars. There is high demand for whole-grain and gluten free cereals worldwide. Key players in the breakfast cereals market are trying to replace hydrogenated oils and fats with healthier options like fruits and fiber.

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