Breakfast Cereals Market Strongly Driven by Rising Global Demand

The vendor landscape of the global breakfast cereals market includes companies such as PepsiCo., Kellogg Co., General Mills, Cereal Partners Worldwide, Post Holdings, and the Weetabix Food Company. The market players are introducing innovative flavors in breakfast cereals to cater to customers across different regions. The U.S. had been the pioneer market for breakfast cereals. However, during the forecast period, Asia Pacific is anticipated to emerge as the fastest growing breakfast cereals market, ahead of North America and Europe. In fact, North America and Europe are anticipated to register a decline in the demand for breakfast cereals whereas Asia Pacific is projected to account for around 13% of the overall market by the end of 2019.

As a result, the market players are narrowing down their strategies to expand in this region. The market players are focusing on region-specific breakfast habits to promote their products accordingly. For example, Chinese consumers prefer hot breakfasts containing rice. Hence, the manufacturers are introducing hot breakfast cereals to appeal to customers. “Though China remains a challenging market for these companies, the nation is anticipated to register a strong demand due to hectic lifestyles and an increase in number of young consumers preferring breakfast cereals over traditional Chinese breakfast,” cites a TMR analyst.

Asia Pacific Drives Demand for Hot Breakfast Cereals

Among the major types of breakfast cereals, ready-to-eat (RTE) breakfast cereals are more popular across North America and Europe. About 85% of the overall demand for breakfast cereals across these regions consists of RTE cereals. The busy lifestyles of consumers in these regions can be attributed to the growing demand for RTE cereals. However, Asia Pacific proves to be new ground for the breakfast cereals manufacturers as a majority of consumers prefer hot breakfast at the start of the day. Hence, the hot cereals segment is anticipated to register a positive growth in this region and is expected to hold 18% of the overall market by 2019.

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Sourcing of Palm Oil Emerges as a Big Threat for Cereal Manufacturers

Change in breakfast habits across the emerging economies has played a pivotal role in the growth of the global breakfast cereals market. The rise in the number of convenience stores in developing nations has increased the brand visibility of breakfast cereals, thereby contributing towards their sale. However, the availability of alternative breakfast options such as baked food products and inexpensive breakfast options from fast food chains might play spoilsport in the growth of the market. Furthermore, the sourcing of palm oil is developing into a big threat for the cereals manufacturers. The global breakfast cereals market has a significant opportunity to grow with the launch of new flavors by the key manufacturers.

The global breakfast cereals market is anticipated to expand at a CAGR of 4.10% during the period between 2013 and 2019. The overall market was valued at US$32.5 bn in 2012 and is expected to be worth US$43.2 bn by the end of 2019.

The information presented in this review is based on a Transparency Market Research report, titled “Breakfast Cereals Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019.”

Global breakfast cereals market has been segmented as:

Segmentation of the global breakfast cereals market by product type:

• Hot Cereals
• Ready to Eat Cereals

Major regions analyzed in this research report are:

• Europe
• North America
• Asia Pacific
• Rest of the World

Global Breakfast Cereals Market: Rising Preference for Convenience Foods to Boost Growth, states TMR

The global breakfast cereals market appears to be consolidated in terms of competition. An intense degree of rivalry exists between the key market players because of low switching costs and lack of diverse products. The top three companies, Cereal Partners, General Mills, and Kellogg’s, held 50 of the total market in2012 in terms of value, states a recent study by Transparency market Research (TMR).

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Several market players have been focusing on launching attractive products for widening their consumer pool. ConAgra Foods acquired Ralcorp in January 2013, whereas Post Holdings, a part of Ralcorp Holdings, became an independent company in 2011. After introducing products such as Honey Bunches, Great Grains Protein Blends, and Good Morenings that gained widespread popularity, Post Holdings rose to prominence in the U.S. market, accounting for a share of about 9% in 2012.

As the demand for breakfast cereals grows, the global market for breakfast cereals is expected to achieve revenue worth US$ 43.1 mn by the end of the forecast period, in terms of value. The market will grow at a steady rate, with a CAGR of 4.1%.

RTE Segment to Present Substantial Opportunities

Based on type, the global breakfast cereals market has been categorized into hot cereals and ready-to-eat (RTE) cereals. While the hot cereals segment is constantly expanding because of growing demand in Asia Pacific, the ready-to-eat cereals segment is expected to lead the market on a global scale. According to the findings of TMR, ready-to-eat products held about 85% of the total breakfast cereals market in North America and Europe. The RTE segment is projected to attain US$35.49 mn in these two regions by the end of 2019.

Based on geography, the U.S. has been exhibiting increased demand, accounting for the leading share in North America. Other geographical segments studied in the report include Asia Pacific, Europe, and Rest of the World. The large population base of Asia Pacific, changing lifestyles, rising per capita income of the people, together with a tendency to follow Western diets, is driving the market for breakfast cereals in the Asia Pacific. The constant increase in the number of convenience stores in countries such as India, Japan, and China is another reason behind the expansion in this region. As an increasing number of women do not find time to cook because of their professional pursuits, the need for a healthy, instantaneous breakfast has arisen. Breakfast cereals, being a viable option, have therefore been increasingly adopted, aiding market expansion. Besides the countries of Asia Pacific, Brazil and Russia will also emerge with great potential, as breakfast cereals grow more popular.

Rising Preference for Convenience Foods to Drive Growth

The increasing rate of urbanization and the consequent emergence of convenience stores, growing preference for convenience foods as the number of working women increases, have been the key growth drivers of the global breakfast cereals market.

Limited access to palm oil, an ingredient used in the production of breakfast cereals, has been one of the key factors restraining growth. Moreover, the availability of a wide range of alternatives such as eggs, toast, and other traditional breakfast dishes is likely to obstruct the growth of the breakfast cereals market. However, the market will witness significant opportunities on account on the rising popularity of RTE products worldwide.

The information presented in this review is based on a Transparency Market Research report, titled, “Breakfast Cereals Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2013 - 2019”.

Key Segments of Global Breakfast Cereals Market

Segmentation of the global breakfast cereals market by product type:

• Hot Cereals
• Ready to Eat Cereals

Major regions analyzed in this research report are:

• Europe
• North America
• Asia Pacific
• Rest of the World

Breakfast Cereals Market is Expected to Rise from US$36.7 bn in 2015 to US$43.2 bn in 2019

The global breakfast cereals market is consolidated with the top three players – Kellogg’s, General Mills, and CP – accounting for 50% of the market in 2012. The threat of substitutes is extremely high for existing companies from breakfast options such as fruits, toast, and eggs. There exists low product differentiation and a negligible switching cost, increasing the intensity of rivalry among players. The threat of new entrants will likely be low as existing players have a strong foothold and global presence, states Transparency Market Research in its new study. As such, new players will find developing a unique brand image a challenge when entering the market. Supermarkets, hypermarkets, and other retail stores are key buyers of breakfast cereals and the bargaining power is low to medium, varying from region to region.

According to the report, the global breakfast cereals market is expected to rise from US$36.7 bn in 2015 to US$43.2 bn in 2019. On the basis of product, the ready to eat (RTE) cereals segment is anticipated to lead and will be worth US$35.39 bn by 2019. By geography, North America will continue to retain its leading position and account for 33% of the market by 2019. The U.S. is the key market for breakfast cereals in North America and is expected to be worth US$9.50 bn by 2019.

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Growing Number of Convenience Stores to Aid Growth of Breakfast Cereals Market

The growing number of convenience stores is one of the key contributors boosting the sales of breakfast cereals as people prefer shopping for household utilities and foodstuff under one roof. In addition to this, convenience stores provide more visibility to food brands. The breakfast cereals market is also benefitting from the high demand from emerging economies in Asia Pacific. As consumers in these countries are switching from traditional breakfast items to wholesome breakfasts owing to increasing health consciousness, the breakfast cereals market is expected to grow tremendously.

Opting for Traditional and Snack Breakfasts to Remain a Hurdle for Market

Palm oil, which is essential for the production of breakfast cereals is specific only to a few limited areas as its plantation requires a particular type of climate. Around 90% of palm oil plantations are found in countries such as Malaysia and Indonesia. This is creating a problem in the procurement of palm oil and becoming a hurdle for the global breakfast cereals market. “Another factor hampering the growth of the market is the busy lifestyles of people compelling them to opt for snack breakfasts to save time,” states a TMR analyst. In addition to this, most countries have their own traditional breakfasts. For instance, congee is the traditional breakfast item in China, whereas bread and other flour-based foods are preferred in India. These alternatives remain a hurdle for the breakfast cereals industry.

New Taste and Flavors in Breakfast Cereals to Create Opportunities in Breakfast Cereals Market

Most manufacturers of breakfast cereals are targeting children and the younger population base to help drive sales. Other age groups offer growth opportunities to players operating in the global breakfast cereals market. In addition to this, products with new tastes and flavors will widen the scope of the market. Companies such as Kellogg’s have targeted the growing number of women consumers in Asia and thus, launched a Special K range of cereals.

This information is based on the findings of a report published by Transparency Market Research, titled “Breakfast Cereals Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019.”

The global breakfast cereals market is segmented as follows:

Product type:

• Hot Cereals
• Ready to Eat Cereals

Regions:

• Europe
• North America
• Asia Pacific
• Rest of the World