Breakfast Cereal Market Size, Share & Trends Analysis Report By Product (RTE, Hot Cereal), By Distribution Channel (Supermarket, E-Commerce, Convenience Store), By Region, Vendor Landscape, And Segment Forecasts, 2018 - 2025

Industry Outlook

The global breakfast cereal market size was valued at USD 37.44 billion in 2016. It is projected to expand at a CAGR of 4.3% from 2017 to 2025. Growing popularity of on-the-go breakfasts, coupled with surging demand for organic cereals and rising health awareness among consumers, is one of the key trends accelerating market growth.

Increasing influence of westernization on food habits of the middle-class population is also contributing significantly towards the demand for breakfast cereals in Asia Pacific. Advancing food retail infrastructure along with rising awareness regarding the health benefits of consuming grain-based breakfasts is further supporting the growth of the market.

Breakfast cereals are available in different varieties, but the essential ingredient is grains. Commonly used grains include oats, rice, barley, wheat, and corn. Few hot cereals such as oatmeal do not comprise any other ingredient while other variants may include coloring agents, yeast, salts, minerals, vitamins, sweeteners, and food preservatives.

Palm oil is a vital ingredient utilized in the processing stage. Sweeteners used in the manufacturing of breakfast cereals include malt, which is obtained from barley, brown sugar, white sugar, and corn syrup. A few natural cereals are also sweetened with concentrated fruit juices. A large variety of flavors is often added, including cinnamon, chocolate, spices, and fruit flavors. Other types of ingredients incorporated to enhance the flavor include dried fruit, nuts, and marshmallows. Moreover, essential vitamins and minerals are also added to them to replace those nutrients that are lost during the process of cooking.

Emerging economies are witnessing a paradigm shift in the purchasing behavior and eating habits of customers. Rapid urbanization and growth of the middle-class population in these economies are resulting in changing lifestyle and growth in demand for on-the-go options of meals. As cereals are considered to offer numerous health benefits and are easy to prepare, they are witnessing augmented demand from consumers worldwide.

Demand for breakfast cereal is restrained by the huge availability of alternatives. Most consumers prefer consuming eggs, smoothies, frozen waffles, yogurt, sausage, puddings, and other traditional breakfasts, which are healthier and are made up of fresh ingredients. Moreover, easier availability of convenient low-cost and nutritious meal options is posing a threat to the demand for cereals. Few health-conscious consumers tend to prefer other breakfast alternatives on account of the presence of sugar as well as other food preservatives, which are added to improve the shelf life of these products.

Product Insights

Ready to eat (RTE) was the leading product segment in 2016, accounting for over 68.0% of the global revenue share. The segment consists of bars, cornflakes, cookies & biscuits, and others. Rising demand for on-the-go meal options is driving the consumption of breakfast cereal bars as well as biscuits. Moreover, increasing awareness regarding easy, fast, and inexpensive meal options offered by the RTE cereal category is boosting the overall market.

The market is also observing upswing in adoption of cereal bars among kids. Attractive packaging, effective advertising strategies, and improved taste are among the key factors fueling its demand. However, in recent times, the demand has slowed down on account of presence of high sugar and preservative contents in cereal bars. In May 2017, Kellogg’s Company reduced to sugar content in Rice Krispies and Frosties bars by 19%, ranging from 40 grams to 32.5 grams. The company also incorporated vitamin D into its snack bars to raise the nutritional value of the product.  

Hot cereals are expected to register the fastest growth during the forecast period. Rising adoption of nutritious meal options in breakfast is spurring the demand for multi-grain cereals including grains, seeds, and beans. Vast benefits of including these organic and whole grain-based cereals in the diet are further escalating the demand for hot cereals. Moreover, incorporation of exotic flavors into the product variants, resulting in innovative tastes, is anticipated to rev up the demand, especially among kids.

Distribution Channel Insights

Supermarket, convenience stores, E-commerce, and others are the major distribution channels reviewed in the report. In 2016, supermarket dominated the breakfast cereal market and is expected to maintain its dominance until 2025.

The number of supermarkets across the globe has witnessed a sharp rise in the last few years. Initially, their presence was concentrated in developed economies of North America and Europe, but now they have expanded their presence across Asia Pacific and the Middle East and Africa.

E-commerce is emerging as a prominent distribution channel in the global arena. The segment generates considerable revenue from developed economies of North America and Europe on account of widespread adoption of the internet and mobile phones. Online channels provide better access to branded merchandise and deliver a better shopping experience. They offer a richer and personalized shopping experience to the buyer. Online channels are attaining popularity among lifestyle users in developed regions.

Regional Insights

North America dominated the overall market in 2016, followed by Europe. Growing health concerns and increasing health issues such as diabetes, obesity, and digestive disorders are supplementing the growth of the region. Moreover, product & packaging innovations coupled with high adoption rate of new products in countries in the region are estimated to play a key role in increasing the demand for the product over the forecast period.

Manufacturers are introducing healthier variants to attract a huge consumer base. The Kellogg's Company; General Mills Inc.; Post Holding Inc.; Private Label; and Quaker Oats are among the major players operating in the U.S. market.

Rapidly growing economies in Asia Pacific are leading a widening base of the populace indulged in busy lifestyles. This, in turn, is stirring up the demand for convenience foods, which is working in favor of the regional market. Rising demand for natural nutritional products owing to increasing consumer awareness regarding healthy lifestyles is poised to trigger demand for breakfast cereals in APAC over the forecast period.

Breakfast Cereal Market Share Insights

Product reformulation, portion sizing, and consumer messaging are among the key areas of focus of the leading players. They are engaged in introducing innovative, fruit-flavored, and fiber-rich products, which contain reduced fat and oil content. In addition, market players are narrowing down their brand positioning strategies to consolidate their presence in regional markets. They are focusing on various region-specific breakfast habits to target their consumers and promote their brand.

The market is highly competitive. Key participants are engaged in forward and backward integration in the value chain. These include Marico Limited; B&G Foods Inc.; Bagrrys India Ltd.; Kellogg Company; General Mills, Inc.; Nestlé S.A.; and Pepsico, Inc.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global breakfast cereal market report on the basis of product, distribution channel, and region:

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • Hot Cereal

  • RTE

• Distribution Channel Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • Supermarket

  • Convenience Stores

  • E-Commerce

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • The U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Australia

  • Central & South America

    • Brazil

  • Middle East & Africa