cereal aisle

US: Kellogg, General Mills look to cereal to attract health-conscious adults

Bowl by bowl, traditional ready-to-eat cereal is getting more nutritious and edging its way back into the healthful perimeter that more Americans are putting around their diets. Kellogg and General Mills, the industry giants, are making that a priority for their brands.

Kellogg, for example, plans to introduce new products infused with more nutrients to help bring back better-educated, higher-income adults to the traditional breakfast that so many of them enjoyed as kids. The new offerings include Raisin Bran with omega-3s and a multigrain version of Special K that will debut later this month in North America.

Lately, Kellogg also has been promoting the simple goodness of some of its classic cereals because of their grain content.

CEO John Bryant told analysts recently that kids and lower-income adults are still spooning up plenty of cereal, according to the Associated Press, but higher-income adults have been cutting back. “I don’t think they’re really that price-sensitive,” he said. “The real issue there is innovation.”

Bryant sees potential to extend other Kellogg brands in large part because of the success his company has had in stretching the Special K brand way beyond the cereal box to bars, shakes, crackers, chips, flatbread-breakfast sandwiches and even a weight-management system. At the same time, Kellogg will be gambling that the addition of extra “functional” nutrients such as omega-3s will appeal to aging boomers who haven’t been lured back to the breakfast foods of their childhood by the fact that they’re nearly all made from whole grains now.

That isn’t to shortchange the contributions whole grains have made to cereal nutrition. General Mills recently noted in its annual corporate-responsibility report that, thanks largely to whole grains, 68 percent of its US retail sales volume last fiscal year came from nutritionally improved products, a 4 percent gain over fiscal 2011 and a huge leap from just 16 percent of the company’s products when tracking began in 2005. Every Big G cereal now contains at least 10 grams per serving, up from at least 9 grams the year before.

General Mills also has been falling in line with the push by nutritionists and government agencies to reduce sodium content in its foods, making progress toward its goal stated in 2008 of trimming sodium by 20 percent on average in its top 10 product categories by 2015.

“We are on track to meet this ambitious, industry-leading sodium-reduction effort,” the company said in its report, according to Food Business News. “This effort affects a significant portion of our portfolio—products from snacks to soups to side dishes.” General Mills also noted major progress on its pledge to cut sugar content on cereals marketed to children.

True, the two breakfast giants also are competing on a new platform that they have co-created: dairy-based beverages that include extra nutrition, Breakfast To Go by Kellogg and BFast by General Mills. But with the nutritional improvement of its cereals, the two companies are keeping competition going in their traditional product arena as well.

Source: brandchannel.com, Food Business News

Related reading:

Redefining breakfast: two strategies that are breathing new life into a tired category

Boomers or bust: Is the $10bn US breakfast cereal market in a state of terminal decline?
On paper at least, boxed breakfast cereal ticks all the right boxes. It’s quick, great value for money, and nutritious – the perfect recession-proof food. Yet US consumption has dropped about 1% every year for the last decade as consumers have sought out more convenient – and often more expensive – alternatives, and ‘breakfast’ has switched from being one of three square meals a day to just another snacking occasion.

So should cereal manufacturers bow to the inevitable, cut prices and enter a margin-crushing race to the bottom as they seek to gain a bigger share of a shrinking market, or can they turn the tide?