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The COVID-19 outbreak has surged interest in natural breakfast cereals, creating some exciting opportunities for manufacturers, particularly those who can offer consumers new healthy options without sacrificing taste.
Nov, 30
2022

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The COVID-19 outbreak has surged interest in natural breakfast cereals, creating some exciting opportunities for manufacturers, particularly those who can offer consumers new healthy options without sacrificing taste.

 

As their name suggests, Breakfast cereals are foods that are chosen for breakfast. The morning cereals are made using a variety of ingredients. They are refined seed grains, which are common in western nations. For maximum results, combine breakfast cereal with milk or curd. They are fat-free and healthy. Cereal ingredients are also a popular breakfast option since they are rich in fibre and nutrients, including vitamins, minerals, carbs, lipids, and proteins. The Breakfast Cereal market is growing in the food industry as people have busy schedules. Nowadays both men and women are working together and breakfast cereals help them to start an energetic day. The demand has also been increasing due to the growth of the retail infrastructures across the emerging economies. With COVID-19 lockdowns prompting an increase in at-home breakfast eating and a resurgence of cereals for breakfast, consumer demand witnessed a surge. For consumers’, taste remained the top priority when it comes to breakfast cereals, however, with the pandemic consumers started placing a greater emphasis on health.

As per a report titled, “Global Breakfast Cereal Market Outlook, 2027”, published by Actual Market Research, the market was valued at around USD 40 Billion in 2021 and it is anticipated to grow with a CAGR of more than 5% from 2022 to 2027. As a nutritious food for the first meal and as a component of a diet, morning cereal is becoming more and more in demand. According to the type of product, namely hot cereals and ready-to-eat cereals, the breakfast cereal market is split into two segments. Cereals that are served hot are referred to as hot cereals. In order to properly eat cereal, it must first be dipped into hot milk or partially cooked. While ready-to-eat cereals can be served without further preparation because, as the name suggests, they are already cooked, all you need to do is serve and eat. Ready to eat cereals are dominating the market as it is very convenient for anyone to just get the cereal on the plate and eat it, rather than preparing the breakfast. It has the majority market share of the Breakfast cereal market.

The breakfast cereal market is segmented based on ingredients into wheat, oats, rice, corn, barley, and others. This ingredient is turned into flour, combined with other ingredients, cooked, dried, and then moulded into various forms to make breakfast cereals. Due to its high carbohydrate content and inclusion of a few vitamins and minerals, wheat has the largest market share. The morning cereal market is divided into conventional and organic varieties depending on the product's nature. The market is now dominated by conventional sorts of items since they are widely accessible at several supermarkets and hypermarkets, convenience stores, and online. But nowadays, more people are paying attention to their health. They recently began utilising organic cereals. As organic cereal are produced without using any synthetic chemicals. So the organic cereals are growing with a higher CAGR in the forecasted period.

Further, the breakfast cereal market has five major regions and they are North America, Europe, Asia Pacific, South America and Middle East & Africa. North America is the most dominating region among them in the Breakfast Cereal Market with the majority of market share. The USA has a major contribution in the North America region. As it has the major share in that region. Also, the disposable income of countries’ people is high in the region. Asia Pacific has been showing growth in the market as it has the majority of the population of the world. According to OEC the largest exporter of prepared cereals in the worlds if Germany, followed by UK, Poland and France.

In North America region, breakfast cereals are considered essential foods with more than 60% of households saying they are a regular part of their grocery basket. However, times have never been more challenging for these core products as competition for the breakfast dollar has strengthened considerably over the past decade or so. Owing to the increasing consumption of functional foods and meal replacements, the North American breakfast cereal market is expected to be the largest during the upcoming timeframe. Vendors across the region attract new customers to expand their footprints in emerging markets by providing innovative products. This is likely to drive the market's growth at a notable CAGR during the forecast period. For instance, in 2020, Freshly Inc., the meal delivery service acquired by Nestle SA, launched a new product line for consumers to match their health and active lifestyles. Freshly Fit ready-to-eat meals are inspired by keto, paleo, and plant-based diet principles. The offerings include gluten-free, clean-label, and whole-food ingredients.

On the other hand, the food and shopping habits of Europeans are evolving. As the population ages, many customers are becoming more worried about their health and nutrition, which is causing them to turn to ready-to-eat cereal instead of hearty eggs-and-meat breakfasts. A growing number of working women value the convenience as well. As they travel more, Europeans are acquiring more global tastes. Cereal sales are being boosted by two other significant shifts in Europe. All around Europe, supermarkets with their endless rows of shelves and vibrant point-of-purchase displays are mushrooming. Additionally, there is an increase in new commercial television channels where cereal producers can air advertisements. The demand for on-the-go food options is greatly influenced by rapid urbanisation and the expansion of the middle class.

The increasing trend toward processed food consumption in emerging nations throughout the area, which also denotes the rising use of breakfast cereal ingredients, is a major driver of market expansion. Health concerns around dietary patterns have evolved. People are choosing wholesome foods. As a result, the Asia-Pacific market has seen growth in the consumption of breakfast cereals. The market for morning cereal is expanding as a result of the strong expansion of convenience stores that support brand visibility. The consumer's equal preference for conventional breakfast meals, however, is causing the industry to stagnate and, as a result, limiting market expansion. Furthermore, the region's rising obesity problem is encouraging the population to switch to healthy breakfast consumption, with cereals leading the way, and rising product innovation by companies has further pushed customers to taste a wide range of products while eating a healthy breakfast.

Across the South America region, breakfast cereals are increasingly gaining acceptance among consumers, especially those in the upper and middle-upper income segments. This is largely due to the fact that more consumers are being exposed to American diets through increased holiday or business travel to the US, and they are becoming ever more aware of the benefits of healthy eating and living. On the other hand, consumption of breakfast cereals among lower-income earners is still very restricted, due to their high unit price. In addition, manufacturers have been actively launching a wide variety of cereal products to cater to the demands of their young consumers. Latest findings have revealed that chocolate-based cereals are very popular, especially in Brazil.

Further, growth is being driven by innovation in the health and wellness arena, with brands competing to deliver healthier, fortified, and natural breakfast cereals. While the Middle East region has a culturally entrenched set of menu items that have been historically consumed for breakfast, this seems to be slowly transitioning from traditional to modern, westernized dishes. As consumers become more budget-conscious, private label sales are increasing. Countries such as South Africa, Saudi Arabia, Morocco, Cameroon, and Israel have seen the increasing prominence of private label products across retail shelves.

The next segment in the Breakfast Cereal market is the distribution channel. The distribution channels through which the product is provided to the consumer are supermarkets & hypermarkets, convenience stores, e-commerce/online and others. Supermarket & Hypermarket has the highest share of the Breakfast Cereal market as the people do their shopping from it. Also, people purchase most of the groceries for months from supermarkets & hypermarkets, and, along with that, they also buy breakfast cereals. But with developments, most of the people in the world now have smart phones and they have been using online shopping, due to which e-commerce/online distribution channel the highest CAGR in had the forecast period.

Covid-19 Impacts:
A brand-new virus named COVID-19 made a splash in the spring of last year. Governments all around the world understood that this was not a virus that should be taken lightly as a result of the fact that it left many individuals around the world gravely ill and even resulted in a few deaths. Global lockdowns and quarantines were implemented in response by governments. Numerous companies in numerous markets were compelled to either entirely stop operations or drastically slow operations down, if only temporarily. For numerous markets, the outcome was terrible. The market for breakfast cereals was no different. It was challenging for many manufacturers to find the basic components required to construct a variety of breakfast cereals. As a result, the supply of these cereals for the final customer dramatically decreased, and their retail price significantly increased. However, throughout the forecast period, it is anticipated that growing consumer awareness of the health benefits offered by the same will drive market expansion.