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cereal_horiz.png Michael Browne

How sweet it isn’t: Cereal battles health perceptions

Retailers, suppliers seek to stem sales declines as the category faces pressure on multiple fronts

The pressure on supermarket center store categories is perhaps nowhere more evident than in the cereal aisle, where health concerns and the trend toward convenient, grab-and-go solutions have landed a one-two punch.

Although many cereal makers have taken steps to improve their ingredient profiles to satisfy today’s health-conscious consumers — and some efforts have shown signs of success — the category overall continues to erode.

According to research firm Mintel, total U.S. sales of hot and cold cereal have declined 9% since 2012 to an estimated $10.5 billion in 2017. Cold cereal, which makes up 87% percent of the market, has seen sales decline 11% in the last five years, with sales estimated at $9.1 billion in 2017.

Michael Browne

Cereal sales have plummeted in the past five years but still topped $9 billion in 2017.

The Mintel research found that 29% of consumers said they were eating less high-sugar cereals than they were a year ago, although taste remains important, the research found. Eighty percent of consumers said taste is the most important factor they consider when selecting a cold breakfast cereal, and 77% cited taste as the No. 1 factor when choosing a hot cereal.

Some retailers have taken a leadership position in helping consumers make healthier choices in the category. In November, West Sacramento, Calif.-based Raley’s, for example, remerchandised its cereal aisle to provide greater visibility to cereals with minimal added sugar content.

“Cereal is one of the worst offenders of added sugar,” said Yvette Waters, nutrition strategist and brand influencer at Raley’s, which has taken steps throughout the store to help consumers live healthier lifestyles. “Our efforts are to increase transparency and help customers make a more informed decision.”

More healthful options

Other retailers are approaching health and convenience concerns in the cereal aisle through the addition of more healthful options and portable items such as breakfast bars. Lakeland, Fla.-based Publix Super Markets, for example, has added several new hot cereals and granolas under its health-forward GreenWise brand in the past year, said Maria Brous, a spokeswoman at Publix.

The chain has introduced five varieties of GreenWise organic granola, eight varieties of GreenWise organic hot cereal and 10 varieties of organic GreenWise breakfast bars in the past year. The retailer offers 10 varieties of GreenWise brand cereals, which are available in both its traditional locations and in its GreenWise Market stores.

Publix Super Markets has added several new hot cereals and granolas under its health-forward GreenWise brand in the past year.

Consumers are increasingly looking for cleaner labels in the cereal aisle, including not only gluten-free but also grain-free options, according to Brous.

“The latest trends include customers looking toward cleaner labels, better choice, gluten-free and organic cereals,” she said. “We’ve seen an uptick in grain-free and non-GMO, which can be found in brands like One Degree and GreenWise. Even in our GreenWise granola, customers are seeking out the grain-free.”

Navigating the nutrition maze

Some retailers also seek to help their health-conscious consumers make more healthful choices through the use of in-store dietitians and store tours.

“You could spend a whole tour just in the cereal aisle sorting out all the confusing marketing messages,” said Jessica Miller, a dietitian and natural/organic and specialty foods buyer at Pyramid Foods, Rogersville, Mo., which offers store tours to shoppers seeking to “navigate the nutrition maze,” as she put it.

She suggests that consumers focus on cereals that offer a whole grain as the first ingredient and have 10 grams or less of sugar.

“When it comes to the box, ignore all marketing messages stamped on the outside,” she said. “They are not typically a good indicator of what is in the box.”

She also noted that the FDA’s new Nutrition Facts food label — slated to roll out by Jan. 1, 2020 — will help consumers better determine how much of the content in cereal is processed sugar versus naturally occurring sugar in the grain or dried fruit ingredients.

Miller said she recommends that shoppers focus on protein when shopping for breakfast foods.

“Add a boiled egg or top Greek yogurt with fruit,” she said. “The tactic of working in a nutrient rather than avoiding others is a positive approach. Typically, protein foods aren’t loaded with sugar, so this is an easy approach to limiting added sugars.”

At Raley’s, high-sugar cereals are placed on the bottom shelves away from the average shopper’s eye view.

Raley’s cites positive feedback

Raley’s said the changes it has made to its cereal merchandising have been well received.

The company remerchandised the cereal department (left) so that cereals that contain 25% or more of their total calories from added sugar are on the bottom shelves. This is meant to bring more awareness to those that have less added sugar and more fiber and other beneficial nutrients. The chain also rolled out a multimedia “sugar awareness” program that includes online messaging and shelf signage to help consumers choose lower-sugar items.

Yvette Waters, nutrition strategist and brand influencer at Raley’s, said customers have remarked that the new merchandising “takes the guesswork out of shopping.” She declined to reveal the impact of the changes on product sales.

Although having the high-sugar cereals on the lower shelves might appear to make them more visible to children, Waters said the higher placement of cereals with minimal levels of added sugar keeps those products at eye level with the consumers who are actually making the purchase.

“Thus far, we are already receiving positive feedback from our stores with families telling their children, ‘Okay, you can pick from this row up,’” she said.

Waters said Raley’s brought manufacturers in to discuss the planned changes early on and invited them to invest in promoting cereals with less added sugar.

“We have received positive feedback from the manufacturers, and will continue to track customer feedback and share our findings,” she said.

Express Lane

New and returning

The latest series of new cereals from Post includes a first-time collaboration with Cold Stone Creamery, a spin-off from Honey Bunches of Oats, the return of the original Honeycomb and new flavors from Pebbles cereal and Post Shredded Wheat.

Kashi for —and by — kids

Kashi by Kids is a new line of organic cereals co-created by children. The cereal company, owned by Kellogg, worked with kids ages 12-17— the Kashi Crew — to develop the breakfast cereal in flavors such as berry crumble, honey cinnamon and cocoa crisp flavors.

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