A type of processed food breakfast cereals is generally known for being consumed as the first meal of the day even though they are featured under the all-day-breakfast option offered by numerous food and beverage establishments throughout the world. They are typically consumed with hot or cold milk with or without fruits. They are manufactured from grains Viz. corn, oats, rice, and wheat. This category of processed food is generally classified as two types which are namely, ready-to-eat cereals such as corn flakes, puffed oats, puffed rice, and shredded wheat, and other types like hot cereals, gluten-free cereals, among others.
Prepared Foods Obtained by the Swelling or Roasting of Cereals or Cereal Products, E.G. Corn Flakes; Cereals (Other Than Maize "Corn") in Grain Form or in the Form of Flakes or Other Worked Grains (Except Flour, Groats and Meal), Pre-Cooked or Otherwise Prepared, N.E.S. (Export)
In Thousands of Dollars
Source: International Trade Centre
The rising trend in consuming low calorie and low carbohydrates and high fiber food, lifestyle changes increasing nutrition considerations of a growing pool of newer generations of customers in emerging economies, growing preference for more transparency in food sourcing and labeling, convenience, changing food habits are a few of the major drivers which are anticipated promote breakfast cereal market growth. Also, region-specific brand localization, marketing initiatives as well as other strategic moves are some investments which market players have been continuously engaged to promote their products and increase their brand value. Organizations are increasingly updating their product formulations and processes to facilitate new product launch thereby catering to the varied customer interests around the world. Nevertheless, the profusion of alternative food products such as yogurt, bread, fruits, eggs, and cereal bars are expected to restrain the growth of the market to a certain extent. A few of the recent market developments that exemplify the increasing engagements of the breakfast cereal market are as follows:
2020 January – Product Launch
Kellogg Co. (NYSE: K) had reportedly launched a newly developed plant-based breakfast cereal, called WK Kellogg By Kids which contains extruded cereal devoid of any sugar but with the natural sweetness beetroot and carrots. Further, the range consists of strawberry hoops, carrot and beetroot balls, and apples stars.
2020 January – Partnership
A partnership was announced between the manufacturer of iconic ready-to-eat cereal brands including Sugar Crisp, Shreddies, Shredded Wheat, Honeycomb and Alpha-Bits, among others called Post Foods Canada Inc. and Tim Hortons® which is Canada's largest restaurant chain operating in the quick-service industry which has evolved to be part of the Canadian fabric to launch two new kinds of cereal create by the former namely Post Timbits® Chocolate Glazed Cereal and Post Timbits® Birthday Cake Cereal.
Final Consumption Expenditure of Households – Restaurants and Hotels , Australia
In Millions of Australian Dollars, at current prices
The APAC region primarily due to its diverse preference in tastes, growing availability of disposable income, increasing accessibility to internet resulting in eCommerce, data-driven product placement facilitating increased visibility is expected to substantially contribute to the estimated growth of breakfast cereals market during the next few years. For example, as reported by USDA the retails sector of Thailand expanded by 2.8 %, with a total value of approximately $116 billion. Largely driven by the growing young middle-income population, greater proclivity to spend, and a trend towards urbanization as well as economic growth. Further with the advent of COVID 19 change in consumption behavior has brought about which has led to rising demand for convenient ready-to-eat meals, healthy food products, and food delivery.
With regards to USDA, the sales of the Philippine food retail sector in 2019 amounted to about $50 billion, with modern retail accounting for half the total. The food retails industry of Malaysia as reported by USDA in June 2020 is expected to grow and is driven by increased spending by consumers. The total sales for this sector reportedly reached $26 billion in 2019. On the other hand, Singapore has a highly developed retail food sector that is reportedly competitive with a total sale that had reportedly exceeded above $6 billion in 2019. Moreover, in light of social distancing measures due to COVID 19, consumers have increasingly prioritized healthy snacking options and ready-to-eat meals recognizing the importance of value-added food as they are increasingly partaking in at-home consumption. Further from the above mentioned it is also pertinent to note that the retail food sector is a determinant that is expected to impact the breakfast cereal market.
It is a known fact that the food and beverage industry also comprise of food and beverage establishments of various formats and tourism (both international and domestic) is one of the key revenue streams. Albeit factors like border shutdowns, travel restrictions, safety concerns associated with travel, the resurgence of the COVID 19 as well as risks of new lockdowns or curfews have influenced consumer confidence ultimately affecting the tourism and hospitality, together these industries are expected to drive the growth of breakfast cereals market in the second half of 2020 because tourism is expected to resume in many destinations in June and July according to the World Tourism Organization (UNWTO). Further, other aspects that are expected to positively impact the breakfast cereal market growth are the planned project expansion of various hospitality chains which is expected to increase the number of breakfast buffets over the coming years. For example, in February 2020, it was announced that Rosewood Hotel Group and its inspiring brands – Rosewood Hotels & Resorts®, New World Hotels & Resorts™, and KHOS™ reportedly continued with its expansion plans with new openings and signings ( a total of 35 projects ) in the world’s most attractive destinations along with a curated pipeline of projects. Again, during the same month the Indian Hotels Company Limited (BSE: 500850; NSE: INDHOTEL) had reported the opening of 24 hotels that are present in their development pipeline.