Bread Fast Cereals

This Report is the property of Mintel International Group Limited.
Mintel International Group Limited
Breakfast Cereals - UK - February 2004
Contents
Introduction and Abbreviations Definitions Consumer research ACORN Abbreviations Executive Summary Demographic influences Value recovery continues The corn sector struggles Top three manufacturers dominate Heavily promoted category Distribution Consumer behaviour Future trends Market Drivers Shifting demographics
Figure 1: Trends and projections in total UK population, by age group, 1998-2007
Fewer children a concern An ageing market a positive sign Young adults as snackers? More people living alone
Figure 2: Number of households, by household size, 1998-2007
Skipping breakfast Health concerns and trends

Nutrition focus - a double-edged sword? Advertising to children - the debate continues
Organic Market Size and Trends Slow, steady growth characterises market
Figure 3: UK retail volume and value sales of breakfast cereal, 1998-2003
Market has found growth avenue in hot cereal

Figure 4: UK retail volume and value sales of breakfast cereal, by type, 2001 and 2003
Hot eating leaps forward Market Segmentation Value growth for RTE
Figure 5: UK retail volume and value sales of RTE cereal, 1998-2003 Figure 6: UK retail value sales of RTE cereal, by type and value, 2001 and 2003
Children's goes from strength to strength Wheat is still strong
Corn is struggling Bran and health cereals - differing success Muesli - small but strong Strong growth in hot eating cereals
Figure 7: UK retail volume and value sales of hot cereal, 1998-2003 Figure 8: UK retail volume sales of hot cereal, by type, 2001 and 2003
The Supply Structure Market supply

Figure 9: Total breakfast cereal market, by manufacturer shares, 2001 and 2003
The top four continue to grow A mixed fortune for smaller manufacturers RTE top-selling brands
Figure 10: The top-selling ready-to-eat breakfast cereals in the UK, by estimated brand shares, 2003 Weetabix is number one Kellogg has six in the top ten Nestl' strong in the children's sector
Hot cereal brands

Figure 11: Hot breakfast cereal, brand shares, 2001 and 2003
Companies and brands

Figure 12: Brand map of the UK breakfast cereal market, by major companies, January 2004
Cereal Partners NPD Jordans NPD Kellogg NPD Quaker NPD Weetabix NPD Retailer brand (own-label) Dailycer Morning Foods NPD Other companies and smaller brands Organic New product briefs February 2004 January 2004 November 2003 October 2003 September 2003 August 2003 Advertising and Promotion Above the line Advertising presents a barrier to entry Expenditure reflects size and scale of the market
Figure 13: Main monitored media advertising expenditure on breakfast cereals, 1998-2003 Figure 14: Annual percentage change - total media spending and total sales, 1999-2003
Spend on hot eating produced results

Figure 15: Main monitored media advertising expenditure on breakfast cereals, by breakfast type, 1998-2003
RTE cereals
Figure 16: Main monitored media advertising expenditure on RTE breakfast cereals, by selected brands, 2001

and 2003
Kellogg Cereal Partners Weetabix Quaker Other Hot cereal

Figure 17: Main monitored media advertising expenditure on hot breakfast cereals, by manufacturer and brand, 2001 and 2003
Quaker Weetabix Below-the-line activity Price-related promotions boost volumes

Figure 18: Price-related promotions in the breakfast cereal market, February 2002-January 2004
In-pack promotions generate appeal

Figure 19: In-pack promotions in the breakfast cereal market, February 2002-January 2004
On-pack promotions dominate

Figure 20: On-pack promotions in the breakfast cereal market, February 2002-January 2004
Distribution Multiple grocers span into convenience

Figure 21: UK retail distribution of breakfast cereal, 2001 and 2003
A change of focus Other channels pose no threat to multiple dominance The Consumer Pan-European comparison
Figure 22: Consumption of breakfast cereals, by country, 2003
Overall cereal consumption in GB

Figure 23: Consumption of breakfast cereals in GB, by age and gender, 2003 Figure 24: Consumption of breakfast cereals in GB, by income and working status, 2003 Figure 25: Consumption of breakfast cereals in GB, by region, 2003
Children's market makes impact

Figure 26: Consumption of breakfast cereals in GB, by presence of children and household size, 2003
Weight of usage Frequency of consumption of cold breakfast cereal

Figure 27: Frequency of consuming cold breakfast cereals, 2003 Figure 28: Frequency of consuming cold breakfast cereals, by age and gender, 2003 Figure 29: Frequency of consuming cold breakfast cereals, by yearly income group and working status, 2003 Urbanites skip on breakfast cereal Figure 30: Frequency of consuming cold breakfast cereals, by region, 2003 Figure 31: Frequency of consuming cold breakfast cereals, by presence of children and household size, 2003
Frequency of consuming hot breakfast cereals

Figure 32: Frequency of consuming hot breakfast cereals, by gender and age, 2003 Age weighs in heavily across other groups Figure 33: Frequency of consuming hot breakfast cereals, by yearly income group and working status, 2003 Figure 34: Frequency of consuming hot breakfast cereal, by region, 2003 A market polarisation in household types Figure 35: Frequency of consuming hot breakfast cereals, by presence of children and household size, 2003
Children - breakfast habits and breakfast cereal Competition from other breakfast foods
Figure 36: Food regularly eaten for breakfast amongst children aged 7-10, 2003 Figure 37: Food regularly eaten for breakfast amongst youths aged 11-14, 2003 Trending away from cereal A wider repertoire How much cereal for kids? Figure 38: Cereal helpings in a normal week amongst youths aged 7-14, 2003
The Future Children will dominate Healthy older adults Snacking needs more development Redefinition of 'health' Carbohydrate and Atkins? Lobbying groups will make themselves heard Indulgence will continue Smaller packages Forecast Reaching a mature market
Figure 64: Forecast of UK volume and value sales of cereal, at current prices, 2003-07 Figure 65: Forecast of UK retail sales of cereal, at constant 2003 prices, 2003-07
Value-adding the name of the game Slowdown in evidence even in value terms Convenience products a must The bad news - falling numbers of children The good news - growing affluence helps trading up EUCG, EUFD, MF, MS February 2004
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Breakfast Cereals - UK - February 2004 February 2004
Introduction and Abbreviations

The UK retail market for breakfast cereals was last reviewed by Mintel in February 2002. At that time, value recovery had returned to the market, while volume was still static. In the relatively mature market, promotional activity and competition have remained fierce, with both above- and below-the-line promotion strong as manufacturers attempted to hold market share. With the progression of changing consumer needs, towards portable, out-of-home formats, manufacturers had focused on new product launches into the snack and convenience markets, to compensate for the deterioration of in-home breakfast meal occasions. New cereal bar sectors appear to be booming (the cereal bar market trebled in size from 1998-2003 overall - see Mintel's Cereal Bars - UK, Market Intelligence, February 2004 ), while consumption of breakfast in the home continues to fall. Throughout 2003, the food industry faced some major nutritional criticism, as the salt, fat and sugar content of processed foods came under close scrutiny. As child obesity rates continue to increase, concerns are being raised over the degree of advertising targeted towards children, especially where it concerns unhealthy or sweet products. Mintel has chosen to examine the hypothesis that: the industry will need to focus more on adults, particularly to develop product repertoires and snack habits. In so doing, the industry will realign with the changing demographic profile of the UK market. Other Mintel reports of relevance include: - Milk and Cream - UK, Market Intelligence, March 2004 - Cereal Bars - UK, Market Intelligence, February 2004 - Breakfast Cereals - US, Consumer Goods Intelligence, November 2003 - Attitudes Towards Healthy Eating, Consumer Goods Intelligence, November 2003 - Eating Habits - US, Consumer Goods Intelligence, May 2003 - Bread, Cakes and Biscuits, Consumer Goods Intelligence, April 2003 - Morning Goods - UK, Market Intelligence, March 2003 - Breakfast Foods - UK, Market Intelligence, June 2002. While this report is part of the Market Intelligence series, it also forms part of the Consumer Goods Intelligence series of reports. The countries covered by the Consumer Goods Intelligence series of reports are France, Germany, Italy, Spain and the UK.
Definitions
For the purposes of this report, breakfast cereals are segmented into cold ready-to-eat (RTE) cereals and hot cereal products. The former group comprises any cereals that are served with cold milk, such as cornflakes or muesli and include ready-to-serve snack packs such as Rumblers and Kellogg's To Go. The hot cereal group consists of porridge, oatmeal and instant hot oat products. Cereal bars (eg Masterfoods' Tracker) and other breakfast products (such as Kellogg's Pop Tarts) are excluded from the scope of this report, but reference to them is made in the light of continued developments in these areas. Value figures throughout this report are at retail selling prices (rsp) unless stated otherwise . Market sizes at constant 1998 prices are devised using Mintel's food deflator.
Consumer research
In addition to the standard breaks, Mintel has analysed the consumer research in the following manner. Lifestages are derived from analysis of the exclusive consumer research and are split into four main groups:
% of population Aged under 45 who are not parents Pre-/no family Family Any age with at least one child aged under 16 still at home Aged 45-64 with no children aged under 16 Aged over 65 with no children aged under 16 28 28
Third age
25
Retired
20
As part of an ongoing policy to find new ways of analysing data, Mintel has created Special Groups of consumers to typify consumer habits in the early years of the 21st Century. Unlike the lifestage groups, these groups represent only sections of the population and do not account for all adults.
% of population ABC1 socio-economic group 16
ABC1 pre-/no family ABC1 families
and in the pre-/no family lifestage ABC1 socio-economic group and in the family lifestage ABC1 socio-economic group and in the third age lifestage ABC1 socio-economic group and in the retired (65+) lifestage Couples where both partners work full-time Aged under 65 and living alone All Internet users at home, work or elsewhere Read The Daily Telegraph, the Financial Times, the Guardian, The Independent or The Times Read the Daily Express or the Daily Mail Read The Mirror, The Daily Sport, The Daily Star or The Sun Have satellite/cable/digital TV 13
ABC1 third age
12
ABC1 retired
Two full-time earners
17
One-person households under 65 Internet users
39
Broadsheet readers
19
Mid-market tabloid readers
22
Popular tabloid readers
33
Satellite/digital TV viewers
45
ACORN
Some reports also use consumer research analysed by ACORN category . ACORN is a geodemographic segmentation method, using census data to classify consumers according to the type of residential area in which they live. Each postcode in the country can, therefore, be allocated an ACORN category. The classification is a more powerful differentiator of consumer behaviour than traditional socioeconomic and demographic indicators. The categories, and their components, are as follows:
ACORN Category
ACORN Group
% of
population 2002 1 Wealthy achievers, suburban areas A - Thriving 2 Affluent greys, rural communities 3 Prosperous pensioners, retirement areas 4 Affluent executives, family areas B - Expanding 5 Well off workers, family areas 6 Affluent urbanites, town and city areas C - Rising 7 Prosperous professionals, metropolitan areas 8 Better-off executives, inner-city areas 9 Comfortable middle agers, mature homeowning areas D - Settling 10 Skilled workers, homeowning areas 11 New homeowners, mature communities E - Aspiring 12 White-collar workers, better-off multi-ethnic areas 4.0 10.7 2.3 8.0 2.5 2.1 2.6 15.0
4.1
3.8
13.6
9.6
13 Older people, less prosperous areas F - Striving 14 Council estate residents, better-off homes 15 Council estate residents, high unemployment 16 Council estate residents, greatest hardship 17 People in multi-ethnic, low-income areas
3.6
10.8
2.8
2.3
2.0
For further details of the ACORN classification, including the ACORN profile of local areas please contact CACI Limited 020 7602 6000 or see www.caci.co.uk.
Abbreviations
BMRB CEO CNCF CTN MD Nielsen Media Research British Market Research Bureau Chief Executive Officer Crunchy Nut Cornflakes Confectioners, Tobacconists and Newsagents Managing Director For more information contact Mary Sneddon at Nielsen Media Research on 01344 469100. New Product Development Research and Development Ready-to-eat Target Group Index. For further details concerning this information, including data on readership patterns of users/purchasers and details of brands, please contact Phil Greenslade at BMRB International on 020
NPD R&D RTE TGI
8566 5000 or via email at phil.greenslade@bmrb.co.uk
02/2004

Executive Summary
Demographic influences
The number of children, who tend to heavily influence whether and which cereal is purchased, has declined by half a million (1998-2003). This will continue by a further 400,000 (2003-07), and their influence on the breakfast cereal market will therefore diminish. From 1998-2007, there will be an additional 1.8 million adults aged 55+. Those within this age group are shown to have traditional mealtime eating habits, with a bias towards health. With one-person households continuing to rise, and more 16-24-year-olds, there will be new consumer needs emerging. Child obesity rates are on the increase, and the food industry is receiving widespread criticism for advertising 'unhealthy' foods to children. Legislation is being threatened to ban the use of advertising directed at children. This will have an impact on one of the most heavily supported categories in packaged grocery.
Value recovery continues

Estimated at 409,000 tonnes in 2003, volume continues to grow slowly, at around 1% year on year. A value recovery continues, with growth of some 2.5% in 2003, the market valued at just under 1.12 billion (1.74 billion). Within the market, the ready-to-eat sector slipped from 95% to 93% share of the total market, although it continued to increase on pace. Hot cereal, from its lower base, increased substantially over that time period, due in large part to the success of Quaker's Oatso Simple.
The corn sector struggles

Within the RTE category, the children's sector continues to be the most important, accounting for 37% of the category and showing sterling value growth of 22% from 2001-03, even in the face of a reduction in the number of children in the population. As traditional family breakfast products struggle, corn cereals continued to decline, down 16% in sterling terms across the period 200103, despite the success of Kellogg's Crunchy Nut Cornflakes. Similarly, the health sector declined 17%, as 'hard core' bran brands struggled. Estimated at 8 million (12 million) in 2003, organic as a sub-sector within health continues to demonstrate strong growth. Wheat biscuits have caught up with corn at an 18% share, valued at 187 million (292 million). This success is due to the biscuit brands of Weetabix and Shredded Wheat. Muesli (with 10% share) continues to show steady growth.
Top three manufacturers dominate

The leading manufacturers - Kellogg, Weetabix and Cereal Partners - continue to dominate the market, with Kellogg holding onto its share estimated at 40% value. Weetabix experienced strong growth, advancing to the second-largest seller of cereals within the UK. Own-label fell back by roughly 9% from 2001-03, in part due to heavier price discounting. Within the RTE sector, Weetabix overtook Kellogg's Cornflakes to be the top-selling RTE brand, although Kellogg holds six of the top ten brands. Within the hot eating sector, two brands dominate. Oatso Simple grew substantially, to hold 24% of value share; the product targets adults with single-serve sachets. Ready Brek, with a 20% share, targets parents.
Heavily promoted category

Although it continues to be a heavily promoted category, above-the-line advertising for breakfast cereal has become an increasingly smaller percentage of total sales from 1998-2003, down from nearly 10% to under 6%. In 2003, above-the-line support was measured at 63.6 million, continuing the 1% decline year on year. Kellogg accounted for more than 50% of advertising spend. High levels of below-the-line promotions have taken over much of the breakfast cereal advertising market; on-pack and in-pack promotions have consistently been an important part of the children's segment. Most recently, price discounting for both branded and store label products has occurred, as well as multibuy offers.
Distribution
Multiple grocers dominate the cereal market, with 93% value share of the total, mainly due to display space; multiples have the available shelf space to offer a wide variety of products. Convenience and independent trade channels focused on alternative breakfast products, and this trend will continue - sales of breakfast cereals through multiples increased 7% in sterling terms from 2001-03, while other channels decreased significantly. Independent channels include health stores, and while the health and organic sector will still see growth in upcoming years, multiples' increased stock of health and other product variants at lower price points will continue to divert cereal sales.
Consumer behaviour
Penetration levels remain high within the UK, at nearly 90% for any type of breakfast cereal, and the majority (53%) eat cereal once a day or more. The RTE sector is eaten by 87% of the population, while hot cereal is at 42%. The heaviest eaters are polarised by age and household type, with the youngest and oldest age groups tending to eat the highest volumes of cereal. Cold cereal skews heavily toward over-65s, although not to the extent of hot cereal. For children, who, as stated, are a core element of the market, cereal eating is a staple breakfast, but this declines significantly as the children age, although penetration is still high. They begin to move towards a wider variety of foods as they have more autonomy in their choices, and children
therefore drive in-home product repertoire, with their need for variety.
Future trends
Children will continue to dominate the market, but older adults will receive more focus as their numbers continue to swell. Considering the essential saturation of the market in terms of penetration, manufacturers will continue to promote snacking as a way to increase consumption. One possible avenue is via healthy indulgence, potentially as a result of confectionery brand extensions. Functional health will be developed further to incorporate probiotics and other new health ingredients. The popularity of low-carbohydrate diets such as the Atkins Diet will impact in the short term, as consumers stop eating foods high in carbohydrate. Government intervention will cause a rethink on the fat, sugar and salt levels of breakfast cereals and impact on the degree of advertising targeted towards children. More indulgent products will be launched, designed to develop adult repertoires, and smaller pack sizes will be launched to meet the needs of smaller households.
02/2004

Market Drivers
Several factors have led to concerns within the breakfast cereal industry, as the market fights a slowly declining penetration level. Frequent reports appear in the press discussing the demise of the breakfast occasion. Among the medical profession, debates on childhood obesity fuel controversy in respect of food advertising. That said, per capita consumption of breakfast cereals in the UK in 2000 stood at 143g per week, making the UK the largest cereal market in Europe. There are many external factors shaping the breakfast cereal market.
Shifting demographics
Figure 1 shows the projected changes in the UK population to 2007.
Figure 1: Trends and projections in total UK population, by age group, 1998-2007
1998
2003 (est)
2007 (proj)
% chang e % 19982003 -5.6
% chang e 200307 -
3.6 0-4 5-14 15-19 20-24 25-34 35-44 7.7 3.6 3.4 8.9 8.3
6.2
3.4
5.7
3.4
5.7
13.2 6.2 5.8 15.3 14.2
7.5 3.8 3.7 7.9 9.0
12.7 6.4 6.2 13.3 15.2
7.1 4.0 3.9 7.5 9.0
11.9 6.7 6.5 12.5 15.0
-2.6 +5.6 +8.8 -11.2 +8.4
-5.3 +5.3 +5.4 -5.1 -
45-54 55-64 65+
7.7 5.9 9.3 58.3
13.2 10.1 15.9 100.0
7.6 6.7 9.5 59.2
12.8 11.3 16.0 100.0
8.0 7.3 9.7 59.9
13.3 12.2 16.2 100.0
-1.3 +13.6 +2.2 +1.5
+5.3 +9.0 +2.1 +1.2
Total
Source: National Statistics/Mintel
Fewer children a concern

Between 1998 and 2003, the number of children under the age of 15 in the UK has fallen by 400,000. Projections for 2007 suggest a further fall of 400,000. The children's sector is the largest within the breakfast cereal market, and children influence the family cereal repertoire and drive variety. With a large number of brands targeting children, manufacturers need to find ways to develop loyalty beyond the on-pack offer.
An ageing market a positive sign

The 55+ market is burgeoning and will continue to grow. Between 1998 and 2003, there were an additional 1 million adults aged 55+, with a further 800,000 anticipated between 2003 and 2007. With traditional eating habits, this sector of the population is the least likely to skip breakfast, and the most likely to eat cereal. Although older consumers are attitudinally more adventurous than in the past, conservative tastes still predominate. Manufacturers providing a good range of healthy products could look to target this audience more actively.
Young adults as snackers?

Breakfast cereal can readily be eaten as a snack outside the conventional mealtimes, and this has been one avenue of growth the market which has attempted to pursue. Where it can be successful in particular is with the 15-24 age group, who can be considered to have the least formal eating pattern of all adults. Between 1998 and 2003, the 15-24-year-old population grew by 500,000, with further increases of 400,000 expected by 2007. This sector of the population represents an opportunity for manufacturers who are looking to develop their products as a healthy, budget at-home snack alternative to crisps and chocolate.
More people living alone

Figure 2 examines the number of households within the UK by household size, to understand the dynamic of families on the breakfast market.
Figure 2: Number of households, by household size, 1998-2007
Source: National Statistics/Mintel
With over 1 million more one-person households in the period 1998-2007, this group represents the fastest-growing sector, and is polarised between older adults and younger adults. One-person flats and houses tend to be smaller, with limited storage space. The physical size of breakfast cereal packets is a barrier to in-home stocking. While variety packs are available, they tend to be targeted towards children. TGI data has shown that non-users of breakfast cereal are more likely to live in one-person households. This poses a problem for cereal manufacturers, as younger adults age they are likely to take their habits into the family lifestage.
Skipping breakfast
Reports differ as to the scale of people skipping breakfast, with some estimating that as many as 20% of under-11s regularly skip breakfast. There are likely to be several factors influencing this trend. Increased commuting time limits the time available for breakfast in the home and has led to the phenomenon of 'deskfast' at work and school. Increased leaning towards eating out of home and snacking between meals have seen a deterioration in traditional eating occasions, especially those when the family sits together. Cereal bars were developed to meet this trend and provide a more portable alternative, but nutritionists warn that they are higher in fat and sugar than their breakfast cereal counterparts. Despite warnings, the cereal bar market has grown exponentially, albeit from a small base. Cereal bars, in particular those based on cereal lines, experienced positive growth from 1998-2003; overall, the market grew 60% from 2001-03, and the chewy segment, which includes most cereal-based bars, grew nearly 78% over those two years.
Health concerns and trends
Nutrition focus - a double-edged sword? For many people, breakfast is still considered the most important meal of the day. Advertising focuses on the need to provide children with complex carbohydrates to aid concentration and provide long-lasting energy, reinforcing to parents the perils of allowing their child to skip breakfast. In a report in July 2002, the Food Commission criticised some luxury breakfast cereals for being high in fat and sugar, comparable in quantity to chocolate and biscuits. The inherent healthy nature of breakfast cereal, combined with the health messages from advertising, do have the potential to mislead the consumer into believing that all breakfast cereal is healthy. Advertising to children - the debate continues Health professionals debating the increased frequency of child obesity in the UK have criticised the biggest food advertisers for actively targeting children by using popular celebrities, cartoon characters, free toys and collectable gimmicks to help sell their products. Some lobby groups are even campaigning to ban such advertising. These mechanics are certainly popular amongst children. Manufacturers within the breakfast cereal market are adept at securing the latest fashionable endorsement. The debate continues as to the ethics of targeting children with advertising.
Organic
The organic sector across total grocery is still in growth, despite a slowdown in sales. Within the breakfast cereal market, organic represents one of the fastest-growing sub-sectors and this looks set to continue as the UK Government gave clearance on the production of genetically modified maize (January 2004). This is likely to spark further reaction from environmental campaigners. Many organic products are fed to young children, particularly around the weaning stage, and organic breakfast cereals are ideally placed to meet the needs of parents during this time.
02/2004

Market Size and Trends

Slow, steady growth characterises market
In the late 1990s, the breakfast cereal market experienced a downturn in volume as consumers continued to skip breakfast in increasing numbers. Since 2000, however, volumes have started to recover, coupled with stronger value growth, in part due to premium, luxury products building value back into the category, while core products have also been able to sell at prices exceeding effects of inflation. Figure 3 shows the UK retail value and volume sales of all breakfast cereal for the period 19982003.
Figure 3: UK retail volume and value sales of breakfast cereal, 1998-2003
000 tonne s 380 1998 1999 2000 2001 2002 2003 (est)
Source: Mintel
Index
Index
m at 1998 prices 997
Index
Index
100
997
100
100
1,485
100
378 378 399 404 409
99 99 105 106 108
998 1,005 1,068 1,090 1,117
100 101 107 109 112
995 1,005 1,034 1,040 1,050
100 101 104 104 105
1,517 1,648 1,719 1,711 1,742
102 111 116 115 117
From 2001-03, value has been driven back into the category through the launch and success of
premium-priced products, at an estimated value of 1.1 billion (1.74 billion). This performance is strong, with sterling value growth in the latest year of nearly 2.5%. While this is the equivalent of nearly a 12% increase from 1998, in terms of 1998 value, it is slow growth of just 1-2% annually. Volume has continued to grow steadily year on year following a slight downturn in 1999-2000.
Market has found growth avenue in hot cereal

The major segments within the UK market for breakfast cereal are ready-to-eat (RTE) cereal (usually eaten cold and poured straight into a bowl), and hot eating, which requires preparation by mixing and heating, usually by microwave or boiling. Figure 4 shows trends in retail sales, by volume and value, for each category within the market for breakfast cereals.
Figure 4: UK retail volume and value sales of breakfast cereal, by type, 2001 and 2003
2001
2003 (est) m % m m %
% change 200103* +2.4
1,015 RTE cereal Hot cereal 53 1,068 Total
1,634
95
1,039
1,621
93
85 1,719
5 100
78 1,117
122 1,742
7 100
+47.2 +4.6
000 tonnes
000 tonnes
363 RTE cereal Hot cereal 36 399 Total

*in sterling terms
91
368
90
+1.4
9 100
41 409
10 100
+13.9 +2.5
Data may not equal totals due to rounding Source: Mintel
Hot eating leaps forward

The market continues to be dominated by cold RTE cereal, accounting for 93% of value in 2003. While this represents a growth of 2.4% in sterling terms across the period 2001-03, as a percentage of the total market, share has fallen from 95% in 2001. Volume for RTE cereal has been fairly stable at 386,000 tonnes, showing slight growth of 1.4% across the period 2001-03, although its share of the total market fell back by 1 percentage point. Value growth outstripping volume can be accounted for by the success of new premium lines which retail in smaller pack sizes at higher price points. Hot eating has leapt forward in the last two years, showing volume growth of 14% across the period 2001-03, accounting for 10% of the category volume in 2003. Sterling value gains show an even stronger upturn, with an increase of 47% across the period 2001-03 to account for 7% of category spend. This growth can largely be attributed to the activities of Quaker.
02/2004

Market Segmentation
Value growth for RTE
Across the period 1998-2003, the RTE sector has seen value growth return, albeit at a slow, steady rate. Price increases on core products, along with a number of indulgent, premium-priced product launches have aided this growth, offsetting the gradual volume decline. Many of these products show a high rate of churn, with delists and new launches observed in response to consumers' needs for variety and new taste experiences. Figure 5 details UK retail volume and value sales of RTE breakfast cereal for the period 19982003.
Figure 5: UK retail volume and value sales of RTE cereal, 1998-2003
000 tonne s 344 1998 1999 2000 2001 2002 2003 (est)
Source: Mintel
Index
Index
Index
Index
100
950
100
100
1,416
100
343 343 363 365 368
100 100 106 106 107
951 958 1,015 1,024 1,039
100 101 107 108 109
948 958 983 977 977
100 101 103 103 103
1,446 1,571 1,634 1,608 1,621
102 111 115 114 115
The RTE sector was worth an estimated 1.04 billion (1.6 billion) in 2003, with volumes standing
at 368,000 tonnes. This gradual improvement in value and volume sales across the period builds stability into this large market; however, in real terms, value has only held steady since 2001. Looking at the individual segments within the RTE market, some sectors have fared particularly well in just the last two years, while others (mainly corn-based and bran and health cereals) have declined significantly. Figure 6 shows UK retail sales and share of RTE breakfast cereal, by type, for the period 200103.
Figure 6: UK retail value sales of RTE cereal, by type and value, 2001 and 2003
2001
2003 (est) m % m m %
% change 200103* +21.9
315 Children's cereals Wheat biscuits Corn-based cereals Bran & health cereals Muesli 173 223 213
507
31
384
599
37
279 359 343
17 22 21
187 187 177
292 292 276
18 18 17
+8.1 -16.1 -16.9
91 1,015
147 1,634
8 100
104 1,039
162 1,621
10 100
+14.3 +2.4
Total
* in sterling terms Data may not equal totals due to rounding Source: Mintel
Children's goes from strength to strength

Children's cereals continue to perform well through the strong use of popular licences linked with television cartoon programmes and Disney films. Free inserts into the packs, with collectable toys help to drive repeat purchase, as has traditionally been the case.
Mintel estimates the children's category as the largest, worth 384 million (599 million) in 2003, accounting for 37% share of RTE cereals. The sector experienced 22% sterling value growth across the period 2001-03. While many adults skip breakfast, manufacturers have stepped up their campaign to remind parents of the nutritional importance of breakfast.
Wheat is still strong

Wheat biscuits, such as Weetabix and Shredded Wheat, have shown relatively strong sterling growth (8%) across the period 2001-03, against a backdrop of declining sales in other 'traditional' sectors. Mintel estimates the wheat sector to be valued at 187 million (292 million), accounting for 18% of the category.
Corn is struggling
The traditional cornflake product format is struggling, while Crunchy Nut versions, including new indulgent launches are performing well and helping to offset the severity of decline across the sector. The sector is worth nearly an estimated 187 million, accounting for 18% share (equating to a decline of around 16% across the period 2001-03).
Bran and health cereals - differing success

Valued at an estimated 17% share at 177 million (276 million) in 2003, this sector is also dwindling in importance, declining at 17% in sterling terms across the period 2001-03. While bran cereals (eg All-Bran, Bran Flakes) are declining, this is being offset by the growth in 'health cereals' such as Special K. Organic as a sub-set of health is continuing to perform well and is valued at an estimated 8 million (12 million - not tabulated separately). Although the market for organic breads and cereals is still relatively small, it grew at a healthy pace - more than 250% from 1998-2003 (see Mintel's Organic Foods - UK, Market Intelligence, November 2003 ).
Muesli - small but strong

Between 2001 and 2003, the muesli sector grew by 14% in sterling terms, with premium-priced adult indulgent cereals with premium ingredients such as chocolate curls and caramelised nuts launched, shifting the market away from more traditional muesli products. Mintel estimates the sector to be worth 104 million (162 million), a 10% share. Dominated by Weetabix's Alpen brand, Jordan's and Quaker, this sector also features a number of smaller manufacturer's with limited distribution. Retailer brand features strongly.
Strong growth in hot eating cereals

Figure 7 shows UK retail sales by value and volume of hot cereal for the period 1998-2003.
Figure 7: UK retail volume and value sales of hot cereal, 1998-2003
000 tonne s 36 1998 1999 2000 2001 2002 2003 (est)

Source: Mintel
Index
Index
at 1998 prices 47
Index
Index
100
47
100
100
70
100
35 35 36 38 41
97 97 100 106 114
47 47 53 66 78
100 100 113 140 166
47 47 51 63 73
100 100 109 134 156
71 77 85 104 122
102 110 122 148 174
The hot eating market was worth an estimated 78 million (122 million) in 2003, accounting for 41,000 tonnes. Between 2001 and 2003, value increased by 47% in sterling terms, while volume was up 14%, reversing the volume downturn seen in 1998-2000. As a sector within the breakfast cereal market, hot eating demonstrated the strongest performance. Microwave preparation has increased the accessibility of this product format into the weekly breakfast routine. With porridge featuring on popular TV programmes such as Big Brother , this traditional product is enjoying something of a revival.
Figure 8: UK retail volume sales of hot cereal, by type, 2001 and 2003
2001 000 tonnes 17 Instant Traditional 19 36 Total hot cereal

Source: Mintel
2003 (est) % 47 000 tonnes 21 % 51
% change 2001-03 +23.5
53 100
20 41
49 100
+5.3 +13.9
The instant sector, such as Quaker Oatso Simple and Weetabix Ready Brek, accounts for 51% of the overall hot cereal market in volume terms. Strong growth of 23.5% between 2001 and 2003 has primarily been driven by Quaker, targeting adults with premium-priced, single-serve sachets. The traditional sector, dominated by porridge oats, has also continued to grow in value at 5% across the period. Used in cooking as well as in the making of porridge, positive health claims may have aided this sector to grow.
02/2004

The Supply Structure

Market supply
The breakfast cereal market is characterised by global manufacturers operating in an oligopoly. In the UK, Mintel estimates that the largest four manufacturers share 77% of the market in value terms. However, there are a host of smaller manufacturers operating in niche sectors, with limited distribution. The breakfast cereal market has a range of technologies, with differing barriers to entry. Smaller manufacturers can readily supply muesli-type products, and to some degree hot eating oat products with minimal investment in machinery. Extruded and flaked cereals require specialist manufacturing technology, with large initial capital outlay, representing a significant barrier to entry. Figure 9 shows the main manufacturer shares within the breakfast cereal market for 2001 and 2003.
Figure 9: Total breakfast cereal market, by manufacturer shares, 2001 and 2003
2001 m 427 Kellogg Weetabix Cereal Partners (Nestl) Quaker Jordans 150 150
2003 (est) m
% change 2001-03
40
447
40
+4.7
14 14
179 168
16 15
+19.3 +12.0
64 32
6 3
67 39
6 4
+4.7 +21.9
43 Others Own-label 203 1,068 Total

Source: Mintel
34
-20.9
19 100
184 1,117
17 100
-9.4 +4.6
The top four continue to grow

Kellogg, despite struggling with Cornflakes and some of its core health brands, continues to grow at 4.7% across the period 2001-03. Accounting for 40% of market share, Kellogg is the largest manufacturer in the UK, with estimated sales of 447 million. Weetabix has shown incredible growth (19.3%) across the period, against a backdrop of a takeover from a US private equity group. Weetabix struggled in the late 1990s and early 2000s, as it lost own-label contracts to competitors. This recovery is reflected in the strong performance of both Weetabix and Alpen. Ranked as the second-largest manufacturer in the UK, Weetabix commands a 16% share of the market, valued at 179 million. Cereal Partners, using the Nestl brand, is the third top-selling manufacturer behind Weetabix. It has seen sales increase by 12% across the period 2001-03 to account for 15% of the market, at 168 million. Quaker has also shown growth of around 4.7% across the period, to account for 67 million (6% share of the market).
A mixed fortune for smaller manufacturers

Over the 2001-02 period, Jordans grew its share by an estimated 22%, to 39 million. 'Other' manufacturers have seen their sales decline by 22%, accounting for only 3% of the total market. Own-label's share declined to an estimated 17% in 2003 (184 million), as this sector has been hit by price discounting.
RTE top-selling brands

The UK's top-selling brands are identified in Figure 10.
Figure 10: The top-selling ready-to-eat breakfast cereals in the UK, by estimated brand shares, 2003
Brand
m 78
% 7.0
Weetabix 'Weetabix' Kellogg's Cornflakes Kellogg's Crunchy Nut Cornflakes Kellogg's Frosties Kellogg's Rice Krispies Kellogg's Coco Pops Kellogg's Special K Nestl Shreddies Quaker Sugar Puffs Nestl Shredded Wheat Nestl Cheerios Weetabix Alpen Nestl Cookie Crisp 74 46 6.6 4.1
41 36 36 34 30 29 28 23 15 9 479
3.7 3.2 3.2 3.0 2.7 2.6 2.5 2.1 1.3 0.8 42.9
Sub-total 638 Others 1,117 Grand total

Source: Mintel
57.1
100.0
Weetabix is number one In 2002, Weetabix biscuits overtook Kellogg's Cornflakes to become the UK's number one breakfast cereal brand. Growing at about 1% year on year, the brand was relaunched in June
2002. The company has provided support to the product, positioning it as a fun yet healthy product. Also from Weetabix, Alpen is estimated to be worth 35 million; it accounts for 50% of branded muesli sales. Kellogg has six in the top ten While no longer the number one product in the UK at retail value sales of 74 million, Kellogg's Cornflakes is supported by a wide range of strong Kellogg's brand performers. Cornflakes is estimated to have fallen by around 5% in the period 2001-03, with a major relaunch in 2003, which stabilised the brand's decline. The Crunchy Nut Cornflakes brand, however, continues to be successful, as the third top-selling brand at 46 million. Showing growth of around 19% across the period 2001-03, this brand has been extended to include premium-priced indulgent lines, such as Crunchy Nut Red. Special K has shown growth of around 6% across the period 2001-03, at an estimated 34 million. As Kellogg's most successful health brand, with a focus on lower fat and better taste, this brand has also been extended to include premium-priced indulgent lines. While Frosties is showing a downturn in value, Coco Pops is increasingly popular, and Rice Krispies experienced an estimated growth of 8% in value terms across the period 2001-03. Nestl' strong in the children's sector Shreddies and Cheerios are predominantly targeted towards children. Shreddies has shown strong growth across the period 2001-03 and is estimated to be worth 30 million in 2003. Shredded Wheat, within the wheat biscuit sector, appeals to all the family and is ranked as number ten, valued at 28 million. Mintel estimates growth of around 5% across the period 200103.
Hot cereal brands

The UK's top hot cereal brands are identified in Figure 11.
Figure 11: Hot breakfast cereal, brand shares, 2001 and 2003
2001
2003
% chang e % 200103 +66.7
17
10
24
Quaker Oatso Simple Weetabix Ready Brek Quaker Traditional Oats Scotts Oats (Old Fashioned, Piper and Porage) Mornflake Superfast 9 5 4 1 25 Sub-total 11 Others 36 Grand total
Source: Mintel
25 14 14 3 72
8 5 5 1 29
20 12 12 2 71
-11.1 +25.0 +16.0
28
12
29
+9.1
100
41
100
+13.9
With very few brands active in the hot eating sector, it is not surprising that Quaker and Weetabix dominate. With intense competition between the two brands, there has been a reversal in fortunes over the last two years. Quaker leads with Oatso Simple at an estimated 10 million, representing 24% of the instant hot eating sector, and demonstrating growth of around 67% across the period 2001-03. This brand has attracted more adults to the market, and through the new launch 'Smoothie', Quaker is also targeting children and teens. Weetabix Ready Brek targets parents for consumption by children. It is valued at an estimated 8 million, showing a decline of around 11% across the period 2001-03. Ready Brek accounts for 20% of the instant hot eating sector. The traditional sector is characterised by small brands that lack presence, as such brands do not appear to be growing. Quaker leads with the Scotts and Quaker offering each valued at 5 million. The Scotts brand is demonstrating growth, with sales up an estimated 25% between 2001 and 2003.
Companies and brands

The UK market for breakfast cereal is heavily branded and Figure 12 provides a brand map from the main manufacturers. It should be noted that this brand map is not intended to be a
comprehensive listing of all cereals available on the retail market.

Figure 12: Brand map of the UK breakfast cereal market, by major companies, January 2004
Manufacturer
Brands All-Bran, All-Bran Apricot Bites, Bart Simpson's Eat My Shorts, Bran Flakes, Choco Cornflakes, Cornflakes, Cornflakes Banana Crunch, Coco Pops, Coco Pops Crunchers, Corn Pops, Country Store, Crispix, Crunchy Nut Cornflakes, Crunchy Nut Red, Crunchy Nut Clusters, Frosted Wheats, Frosties, Frosties Chocolate, Frosties Turbo, Fruit 'n' Fibre, Honey Loops, Hunny B's, Just Right, Raisin Wheats, Rice Krispies, Ricicles, Special K, Special K Red Berries, Special K Peach & Apricot, Start, Sultana Bran, X-Men 2 -The Cereal Alpen, Alpen Crunch, Alpen Wheat Flakes, Alpen Crunchy Bran, Ready Brek, Weetabix, Weetabix Mini Crunch, Weetabix Organic, Weetos Shredded Wheat, Bite-sized Shredded Wheat, Shredded Wheat Fruitful, Honey Nut Shredded Wheat, Shreddies, Frosted Shreddies, Coco Shreddies, Cheerios, Honey Nut Cheerios, Nesquik, Golden Grahams, Cinnamon Grahams, Clusters, Golden Nuggets, Cookie Crisp, Lion Cereal, Pic a Pac, Fitnesse Sugar Puffs, Puffed Wheat, Oat Krunchies, Harvest Crunch, Oat Bran Crispies, Scotts Porridge Oats, Oatso Simple, Quaker Oats, Scotts So Easy Luxury Crunchy, Original Crunchy, Organic Muesli, Country Crisp, Special Muesli, Natural Muesli, Porridge Oats, Organic Four Berry Crisp, Organic Swiss Style Muesli, Organic Oats, Nature's Wholegrain, Natural Wheat Bran
Kellogg's
Weetabix
Cereal Partners
Quaker
Jordans
Note: Not all flavour variants are given Source: Mintel
Selected leading UK cereal manufacturers are profiled with examples of NPD that have appeared since Mintel last reported on this market in February 2002.
Cereal Partners
Formed in 1990 as a 50:50 joint venture between US General Mills and Nestl SA, Cereal Partners Worldwide has a turnover of nearly $1 billion. The company manufactures branded RTE cereals using the Nestl name, and also produces for retailer brands. In the UK, Cereal Partners is estimated to command a 25% share when own-label is taken into consideration. The UK was
the first market entered by Cereal Partners when it purchased Shredded Wheat and Shreddies from Nabisco. It operates from four sites: Welwyn Garden City, Watford, Bromborough and Staverton, employing around 1,000 people. In October 2002, Cereal Partners appointed a new UK Managing Director, as the previous incumbent retired. That same year, global sales reported a slump for several consecutive quarters, showing a similar pattern to the other leading cereal manufacturers as the industry experienced a downturn in some of the core, flake products. The Shredded Wheat brand, featuring the British Heart Foundation logo and focusing on the health benefits of whole grain, goes from strength to strength. In the US, organic cereals were launched in June 2002. Cereal Partners has access to the large number of brands in the Nestl stable, many of which could be extended into a cereal format, reducing the cost and risk of new brand development (eg Lion Bar). Cereal Partners is also proficient at securing character licences for appeal amongst children. In January 2003, to coincide with the launch of Disney's Treasure Planet , holographic spinners and CD-ROM games were placed inside the boxes of Shreddies, Golden Grahams etc.
NPD
In September 2003, Fitnesse was launched. Described as a 99% fat-free cereal, it is aimed at women and is made from multigrain flakes of rice, wheat and corn. Priced at 1.19 for 375g, it has been supported by TV advertising and is likely to compete with Kellogg's Special K. Also in September, Nestl extended its famous confectionery Lion Bar into a new wheat and corn cereal, with the taste of the chocolate and caramel Lion Bar. Claiming to be the 'king of cereals' it is priced at 1.98 for 375g. In December 2002, a limited edition of Golden Nuggets was launched; Choco Nuggets , priced at 1.69 for a 375g box. Fruitful Shredded Wheat cereal was reformulated in October 2002, claiming to have a new fruitier tropical taste. Made from whole grain with no added salt, each 500g box is priced at 1.59. A big value variety pack, Pic a Pac , was launched in time for the school holidays in August 2002, containing Cheerios, Cinnamon Grahams, Golden Nuggets, Shredded Wheat Bitesize (with no added salt) , Shredded Wheat Fruitful (with no added salt) and Coco Shreddies , for 0.99. In July 2002, Cookie Crisp was launched and has been a success within the children's sector. Described as a chocolate chip cookie breakfast cereal, it is made from corn and wheat cookie pieces with chocolate flavour chips and fortified with eight vitamins, calcium and iron. They are aimed at children and each 375g box is priced at 1.67. Also in July 2002, Shreddies was extended with the introduction of Coco Shreddies ; each box featured a Spider-Man character and enclosed a free 'web shooter' with four to collect in the series. A 500g box is priced at 1.78.
Jordans
A family-owned company established for more than 150 years, Jordans is the leading supplier of UK organic cereals and has been making food products since the 1960s. Savoury snacks as well as breakfast cereal and cereal bars are manufactured from the site at Biggleswade, employing
more than 400 staff. Jordans was the first company to introduce cereal bars in the UK. As a major exporter to Europe, around 22% of turnover is from overseas sales. Within the breakfast cereal market, Jordans competes in the muesli sector and is the secondlargest brand, behind Alpen. The company focuses on health benefits, offering indulgent and premium products alongside organic and simple oat products. In March 2002 a new MD was appointed.
NPD
In May 2002, the Country Crisp brand was extended with the introduction of 'Wild About Berries' containing 2% blackberries, cranberries and blueberries, priced at 1.89 for 550g. Nature's Wholegrain was launched in July 2002. Claiming to combine health and luxury, it is available in two varieties containing wheat, oat flakes and oat bran. One has added sultanas, honey, sliced almonds and caramelised nuts, while the other has sultanas, dates, pecans and maple syrup. They are priced at 2.19 each for a 500g box.
Kellogg
Kellogg is the world's biggest breakfast cereal manufacturer, selling products in over 160 countries. With over 40 brands, it employs over 15,000 people and manufactures from 19 different countries. Within the UK, Kellogg manufactures from the Manchester and Wrexham sites, opened in 1938 and 1978 respectively. Estimated annual sales are $9 billion, with sales up 4% in the second quarter of 2002, Kellogg has been reporting strong and steady growth. The stated corporate strategy recognises the need to cater for local market tastes, particularly in the Asia-Pacific region. With 8% of sales coming from new products, the stated intent is to launch 30 new products globally per year. R&D spend was set to treble between 2001 and 2004 and in line with this a recent announcement was made to relocate R&D facilities to Australia. Kellogg does not manufacture cereals for own-label. With strong brands, price erosion from ownlabel alternatives is a major threat for the company. In January 2003, Kellogg raised its prices in the US by around 0.5%. Nutrition, quality and consistency are key communication themes in an attempt to differentiate their offer from 'copy-cats'.
NPD
The Cornflake brand was relaunched in March 2003 in redesigned boxes with 'foil-fresh' bags, intended to reinvigorate the brand after losing the number one breakfast brand status. Later in November 2003, ' Banana Crunch ' was introduced, cornflakes mixed with 22% dried banana; a 275g box is priced at 1.19. In September 2003, Kellogg extended its Crunchy Nut Cornflakes brand into a new ' Cluster ' variant. Described as a 'light and crunchy fusion of oats, wheat and corn' there are two varieties, Honey and Nut, or Milk Chocolate Curl. They are priced at 1.79 for 500g. Hunny B's were originally introduced in June 2002 featuring the Winnie the Pooh characters on the pack. The cereal is said to help keep bones and the heart healthy, increase physical energy
and increase concentration. In June 2003, Hunny B's were relaunched to include Piglet biscuits, as a limited edition tie-in with the launch of Piglet's Big Movie . Each 350g box has a recommended price of 1.78. Similarly in May 2003, a limited edition toffee and caramel-flavoured ' X-Men 2 ' cereal was launched, endorsed by the film and aimed at children, a 375g box is priced at 2.05. In March 2003, Kellogg replaced No ProblemOs , its The Simpsons -inspired cereal, with a limited edition Bart Simpson's Eat My Shorts , described as golden syrup-flavoured multigrain flakes in the shape of Bart's shorts. They contain less than 3% fat and claim to increase concentration and encourage healthy bones. A 350g box is priced at 1.95. No ProblemOs were originally launched in February 2002 with mini chocolatey biscuits. Also in March 2003, Kellogg extended its Special K brand with the taste of peaches and apricots. A 375g box for 2.39, it is 99% fat-free, enriched with vitamins and minerals and claims to be '100% satisfyingly tasty'. Chocolate Frosties were introduced in October 2002 as a brand extension to Frosties , chocolate and sugar-coated, a 500g box was priced at 1.85. Earlier in June 2002, the Coco Pops brand was extended with the introduction of Coco Pops Crunchers , described as crunchy chocolate breakfast cereals. A 375g box was priced at 1.99.
Quaker
A subsidiary of PepsiCo, the US Quaker Oats Company is a strong global brand, and profits were reported to be up 55% in October 2002. Cereal activity in the UK is limited. Within the RTE sector, Sugar Puffs is the best-known Quaker brand, while in the hot eating sector, the new Oatso Simple has made significant inroads into what has been considered a staid sector, reinvigorating sales in the traditional Scotts brand.
NPD
January 2004 saw an extension to the Harvest Crunch brand, with a Mediterranean version with Peach & Apricot or Raisin, Cranberry & Almond. A Nut Collection was also added which includes Pecan clusters to the original Harvest Crunch recipe. Both are priced at 1.55 for a 500g box. In preparation for winter, Quaker extended its Oatso Simple range with a new ' Smoothies ' variety in August 2003. Available in a multipack of three varieties - 2 x Super Strawberry, 2 x Very Vanilla, and 3 x Terrific Toffee - the packs are priced at 1.60 and are microwaveable. Each pack is fortified with vitamins and iron. In July 2003, the Sugar Puffs children's brand was relaunched in packaging featuring a new Honey Monster design with a 'fresher feel'. A year earlier in June 2002, the brand featured a new recipe with claims of 'best ever taste'.
Weetabix
In November 2003, a US private equity group, Hicks, Muse, Tate & Furst (owners of Premier Foods and part owners of United Biscuits) agreed to purchase Weetabix for 642 million, marking the end of family ownership for the 71-year-old company. The CEO and family member stepped
down and took on non-executive duties. Weetabix operates from factories in the UK, North America and South Africa, selling products in over 80 countries. Within the UK, there are four manufacturing sites at Burton Latimer, Corby, Hastings and Ashton-under-Lyme. In 2002/03, Weetabix reported higher pre-tax profit than expected of 50.6 million, up 14% on the previous year. Annual turnover is estimated to be around 362 million. Weetabix performed well in 2002-2003, with the biscuit brand Weetabix overtaking Kellogg's Cornflakes as the UK number 1 breakfast brand. Weetabix also manufactures own-label products.
NPD
Weetabix underwent several rebranding efforts in 2002. In November 2002, Crunchy Bran was relaunched under the Alpen brand as Alpen Crunchy Bran. Described as a high-fibre vegetarian breakfast cereal made from wholewheat, bran, maize and oat bran, each 40g serving of Crunchy Bran is equivalent to half the daily requirement for fibre. A 275g box is priced at 1.55. Earlier in June, the Alpen breakfast cereal was relaunched in redesigned packaging featuring a new logo and bright colours, against the signature blue background. Also in June, Minibix were rebranded as Weetabix Mini Crunch and the organic brand Nature's Own was rebranded Weetabix Organic . The Weetabix brand was relaunched with a new design in landscape orientation rather than portrait-shaped packs, with a new italicised Weetabix logo.
Retailer brand (own-label)

All of the supermarket chains have a strong own-label presence in the breakfast cereal category. Own-label accounts for 19% of value sales and is in slight decline. Cereal Partners and Weetabix are major suppliers, with Dailycer estimated to supply around 30% of UK own-label volume.
Dailycer
Wholly owned by the Netherlands-based Koninklijke Wessanen, Dailycer supplies 10% of the European RTE breakfast cereal market, and 30% of UK own-label volume. Dailycer has manufacturing capability for all the main cereal technologies, including organic products, and produces for own-label, as well as under licence for branded manufacturers such as Weight Watchers from Heinz, and Perfect Balance . It also sells products under its own brands of Cheshire and The Big Cereal Company . It operates from two factories in the UK, Telford and Deeside, as well as in mainland Europe. Employing around 1,100 people, it has an estimated annual turnover of 230 million.
Morning Foods
One of Europe's largest oat millers, this family-run company supplies own-label with RTE crunchy oat cluster cereal as well as milled oat products for porridge. It also retails product under the Mornflake brand. It is a major exporter to more than 50 countries.
NPD
New product launches from the retailers followed the more successful brands, and launched into the fastest-growing sectors such as children's, low-fat and luxury. A few are reviewed below. Oatso Simple from Sainsbury's introduced an eight Easy Oat Sachet Selection in January 2004, providing an own-label alternative to Quaker's Oatso Simple. Each pack contains eight sachets of Scottish oats in three assorted varieties: Apple; Golden Syrup; and Original flavours. This product is suitable for vegetarians and vegans and is microwaveable. Each box is priced at 1.29. In July 2003, Waitrose launched Chocolate Numbers Cereal as part of its new Food Explorers range aimed at children. The chocolate-flavoured maize and rice crunchy cereal is free from artificial colours, flavours and sweeteners. It has extra folic acid and 25% less salt and sugar than the typical chocolate-flavoured cereal. It is suitable for vegetarians and is packaged in a 250g plastic bag within a carton for 1.29. In December 2002, Tesco launched an own-label version of Kellogg's Crunchy Nut Red, called 'Honey Nut with Cranberries'; the product also contains yogurt-flavour cornflakes with cranberries and almonds. A 425g box is priced at 1.79. Also in the indulgent sector, Sainsbury's launched Caramelised Nut & Raisin Crunch, under the Taste the Difference brand, in August 2002. Described as slow-baked rolled oat clusters, folded with caramelised nuts and Chilean flame raisins, each 500g box is priced at 1.49. Strawberry & Banana Crisp was launched as a flavour variant with strawberry and banana pieces, with 8% white chocolate curls for a 'creamy yet fruity taste explosion'.
Other companies and smaller brands

Ennis Foods is based in Ireland and produces the chilled milk and cereal brand Rumblers , first launched in 1998. The dual-compartment portable pot contains a spoon, fresh semi-skimmed milk and in a separate compartment cereal. Along with the Kellogg's 'To Go' twin-pot of fresh milk and cereal, the two brands stand out as the only offering of an out-of-home alternative to a bowl of cereal with milk. NPD has been active at Ennis Foods. In March 2002, Breakfastables were introduced, as a child-targeted version of Rumblers. Available in frosted flake, low-fat crunchy flakes of corn and Choco-Surprise varieties, they are priced at 0.85 per portion. Rumblers Weekend was launched in July 2002, containing two ready-to-eat breakfast pots packaged in a carton, forming a twin-pack-style offering. Each 175g pot contains cereal and a separate serving of half-fat Millacmaid milk along with a spoon. In the same month, a Fruit & Fibre Rumblers was added to the existing range. Rumblers Bio was added in August 2002 featuring bio yogurt in place of the usually fresh semi-skimmed milk, with cereal clusters and hazelnuts. Another notable product launch in 2003 came from a new entrant to the breakfast cereal category. Capespan , the fruit juice manufacturer, introduced a premium range of muesli under three brand names in January 2003. All three products are claimed to have a 50% fruit content. Fyffes Tropical Fruit is described as a combination of bananas and nuts. Outspan Exotic Fruit is made with a
blend of five cereal flakes, and dried fruit (sultanas, raisins, apricots and mango) using the Outspan logo and company endorsement. Cape Orchard Fruit consists of apples and plums. The range is packaged in a 750g Tetra Rex carton, which removed the need for a plastic insert liner bag, and is priced at 2.49. Capescan has plans to extend distribution, add new varieties, launch a smaller pack and develop a cereal bar to build on the success of this launch. In February 2003, Health Care Products launched Scooby-Doo Cereals, described as white chocolate-coated cereal snacks suitable for vegetarians and is aimed at children. Each 250g box is priced at 1.89. Also in July 2002, Mr Men Choco Numbers cereal was launched, with chocolate-flavoured numbers and caramel-coated Mr Happy shakes, the 250g box was priced at 1.29.
Organic
The organic sector is estimated to be worth 8 million, with Jordans as the leading supplier, with Weetabix Organic as the leading brand (Weetabix holds second in market share at with 25%). There are many other, smaller suppliers of organic cereal, with a selection presented here. With the supply of organic produce limited and specialised, many of the branded organic offers are produced under licence. Whole Earth Foods began as a restaurant in 1967, extending to a health food store in 1969. By the 1990s, the company was sourcing organic produce and offering it under licence to the supermarkets. Doves Farm was established in 1978 and is one of Europe's largest suppliers of organic and speciality flour and grain. New under the Doves Farm brand in July 2003 were two new organic cereal varieties. Chocolate Stars are free from wheat and gluten, aimed at children. Bio Bran is 99% fat-free and high in wheat fibre. They are packaged in 375g packs, priced at 2.19 and 1.99 respectively. Earlier in February 2003, Doves Farm introduced Bio Biz , an organic wheat breakfast biscuit, similar to Weetabix. Buxton Foods was established in 1991. In June 2003, the company launched a new organic cereal product aimed at children from 7 months to 5 years old. With no added salt or sugar, the packaging features Beatrix Potter's Peter Rabbit. A total of 77 new products were picked up by Mintel in the period February 2002 to January 2004 across all manufacturers, with just three of these being hot eating products.
New product briefs

Examples of new product launches between August 2003 and February 2004 are shown in the remainder of this section. This listing is not exhaustive and does not detail all launches, but rather is intended to give examples of new product activity and trends. The new product briefs are taken directly from Mintel's GNPD database of new products.
February 2004
Tesco
In UK in the Breakfast Cereals category, Tesco has introduced Multigrain Hoops Cereals under the Tesco brand. The company has flagged the product as Vegetarian, Vitamin/Mineral Fortified. Sugar coated multigrain breakfast cereals, with added vitamins and iron, comprising: oat, barley, wheat, maize and rice hoops. They are said to be suitable for vegetarians, and are available in a 375g box. Price 1.95.
January 2004
Kellogg In UK in the Breakfast Cereals category, Kellogg has introduced K-Lock Corn Flakes under the Kellogg's brand. The company has flagged the product as Novel, Innovative Package. Kellogg has repackaged its Corn Flakes in a new shaped box, for the first time in its 97-year history. The new box has a K-Lock closure which is recloseable, with a pointed top instead of the usual oblong shape. It is the second packaging innovation within the brand in 10 months, and the new boxes are claimed to keep the flakes crisper and fresher for longer.
In UK in the Breakfast Cereals category, Kellogg has introduced Banana Cornflakes under the Kellogg's brand. Kellogg's has introduced a Banana Crunch edition of its Cornflakes. The cereal contains toasted flakes of corn with dried banana. Price 1.73.
Jordans
In UK in the Breakfast Cereals category, Jordans has introduced Special Fruit Muesli under the Jordans brand. New under the Jordans brand is Special Fruit Muesli, alow fat muesli available in Tesco and Sainsbury's stores, priced at 2.59 for 750g. Price 3.77. Quaker Foods & Beverages
In UK in the Breakfast Cereals category, Quaker Foods & Beverages has introduced Harvest Crunch Mediterranean Peach & Apricot under the Quaker brand.
New to the Harvest Crunch range is the Mediterrean Peach & Apricot with Raisin, Cranberry & Almond. Price 2.25.
In UK in the Breakfast Cereals category, Quaker Foods & Beverages has introduced Harvest Crunch Nut Collection under the Quaker brand. New to the Harvest Crunch range is the Nut Collection, which adds Pecans clusters to the original Harvest Crunch recipe. Price 2.25.
Cereal Partners
In UK in the Breakfast Cereals category, Cereal Partners has introduced Fitnesse Cereals under the Nestl brand. The company has flagged the product as Low Fat, Female. Cereal Partners has launched Fitnesse. It is claimed that this breakfast cereal helps the consumer to keep an eye on their weight. It is said to be healthy, its made up of multigrain flakes of rice, wheat and corn, contains vitamins and minerals and is 99% fat free. Price 2.89.
Sainsbury's In UK in the Breakfast Cereals category, Sainsbury's has introduced Mango & Almond Muesli under the Sainsbury's brand. The company has flagged the product as Vegetarian. Sainsbury's has reformulated and improved their Mango & Almond Muesli. It is a delicious blend of oat and wheat flakes with 39% fruit and nuts, including raisins, mango and almonds. It is suitable for vegetarians. Price 4.35.
In UK in the Breakfast Cereals category, Sainsbury's has introduced Easy Oat Sachet Selection under the Sainsbury's brand. The company has flagged the product as Microwaveable, Vegetarian. Sainsbury's has introduced an 8 Easy Oat Sachet Selection. Each pack contains 8 sachets of Scottish oats in three assorted varieties: Apple; Golden Syrup; and Original flavours. This product is suitable for vegetarians and vegans and is microwaveable. The oats are a source of fibre. Price
1.88.
November 2003
Kellogg In UK in the Breakfast Cereals category, Kellogg has introduced Banana Crunch Corn Flakes under the Kellogg's brand. Banana Crunch Corn Flakes combines corn flakes with pieces of dried banana. Price 2.23.
Flahavan's In UK in the Breakfast Cereals category, Flahavan's has introduced Quick Oats under the Flahavan's brand. The company has flagged the product as Microwaveable. Flahavan's is to launch its Irish Microwaveable Quick Oats in the UK through Tesco stores. The oats are packaged in resealable drums with measuring scoops, and take two minutes to cook.
October 2003
Doves Farm Foods In UK in the Breakfast Cereals category, Doves Farm Foods has introduced Organic Cereals under the Doves Farm brand. The company has flagged the product as Organic, Children (5-12), Low Fat. New under the Doves Farm brand are two new cereal varieties, comprising: Chocolate Stars, wheat- and gluten-free and aimed at children; and Bio Bran, 99% fat-free and high in wheat fibre, said to keep the digestive system healthy. They are packaged in 375g packs, priced at 2.19 and 1.99 respectively. Price 3.15.
September 2003
Cereal Partners In UK in the Breakfast Cereals category, Cereal Partners has introduced Lion Cereal under the Nestle brand. A new wheat and corn cereal from Nestl with the added taste of the chocolate and caramel Lion Bar (chocolate countline brand). It is said to be the king of cereals. It is manufactured by Cereal Partners which is a joint venture between Nestl and General Mills. Price 2.87.
Kellogg In UK in the Breakfast Cereals category, Kellogg has introduced Crunchy Nut Clusters under the Kellogg's brand. The company has flagged the product as Vegetarian, Vitamin/Mineral Fortified. A new cereal range available in two varieties; Honey & Nut; and Milk Chocolate Curls. It is a light and crunchy fusion of oats, wheat and corn blended with honey and peanuts (and milk chocolate curls for the chocolate variety). It is said to be ludicrously tasty. Price 2.60.
In UK in the Breakfast Cereals category, Kellogg has introduced Cereal Range Extension under the Kellogg's brand. The Kellogg's brand has extended their Crunchy Nut cereal range with two new varieties: Honey & Nut; and Milk Chocolate. Nestl
In UK in the Breakfast Cereals category, Nestl has introduced Fitness Cereal under the Nestl brand. The company has flagged the product as Low Fat, Female. New under the Nestl brand is Fitness, a new 99% fat-free ceral aimed at women, with multigrain flakes made from rice, wheat and corn. The cereal is packaged in a 375g box, priced at 1.99. The new launch is hoped to rival Kellogg's Special K offering. Price 2.89.
August 2003
Quaker Foods & Beverages
In UK in the Breakfast Cereals category, Quaker Foods & Beverages has introduced Oatso Simple Smoothies under the Quaker brand. The company has flagged the product as Microwaveable, Children (5-12), Vitamin/Mineral Fortified. Quaker Foods & Beverages is to launch Oatso Simple Smoothies, a flavoured hot oat cereal for children. It will be available in a multipack of three varieties: 2 x Super Strawberry; 2 x Very Vanilla; and 3 x Terrific Toffee. The pack is priced at 1.60 and is microwaveable. Each pack is fortified with vitamins and iron. Price 2.32.
Tesco In UK in the Breakfast Cereals category, Tesco has introduced Healthy Living Muesli under the Tesco brand. The company has flagged the product as Low Calorie, Low Fat, Vegetarian. Tesco Healthy Living Muesli is described as a delicious blend of wheatflakes and oats with raisins, apricots, cranberries and dates. The muesli is claimed to be suitable for vegetarians, have less
than 3% fat and 227 calories per serving. Price 1.86. 02/2004

Advertising and Promotion Above the line

Advertising presents a barrier to entry
The breakfast cereal market is one of the most heavily advertised grocery categories. The multitude of strong brands within the category competing for consumer awareness requires continual support. The need for advertising represents a barrier for new brand and new product entrants seeking to gain consumer awareness. For several years, the total category advertising expenditure has been in decline, as sales in the core ranges diminish and own-label erodes price points and margins. In 2001, Mintel reported that in the US, the top four advertisers in the breakfast cereal category - General Mills, Kellogg Co, Kraft Foods' Post division and PepsiCo's Quaker - decided to pool $50 million for a generic campaign to stem sector decline. They formed a consortium dedicated to building awareness and sales of the $6.7 billion ready-to-eat cereal industry. In the UK, the debate continues into children's unhealthy diets and whether food manufacturers should be banned from advertising to children. Some have gone so far as to say that sugary and high-fat foods targeting and advertising has a detrimental 'brainwashing' effect on children.
Expenditure reflects size and scale of the market

Figure 13 shows the total advertising expenditure on breakfast cereals for the period 1998-2003.
Figure 13: Main monitored media advertising expenditure on breakfast cereals, 1998-2003
000 97,212 1998 1999 89,360
Index 100
% of sales 9.75
92
8.95
2000 2001 2002 2003
79,798 73,664 63,927 63,605
82 76 66 65
7.94 6.90 5.86 5.697
Source: Nielsen Media Research/Mintel Figure 14: Annual percentage change - total media spending and total sales, 1999-2003
Source: Nielsen Media Research/Mintel
Since 1998, total advertising spend expressed as a percentage of sales has diminished at a rate of around 1 percentage point a year. Year-end figures for 2003 show total spend at roughly 64 million, or 5.7% of sales. In comparison to other categories, such as biscuits or confectionery, total spend levels are still high. The size of the total advertising budget within the breakfast cereal market reflects the size and scale of the global manufacturers operating in this market and their determination to succeed. As an index against 1998 data, total advertising spend has declined significantly, as manufacturers switch their efforts into below-the-line activity, on-pack and in-pack promotions. The cereal market has strong nutritional messages to convey, with many of the leading manufacturers investing in cause-related marketing in favour of above the line media (for example, Cereal Partners' Shredded Wheat cereal's association with the British Heart Foundation).
Spend on hot eating produced results

Figure 15 shows advertising spend, split by breakfast type for the period 1998-2003.
Figure 15: Main monitored media advertising expenditure on breakfast cereals, by breakfast type, 19982003
RTE 000 92,604 1998 1999 2000 2001 2002 2003 82,264 75,272 69,118 58,885 59,743 89 81 75 64 65 7,096 4,526 4,546 5,042 3,862 Index 100 000 4,608
Hot Index 100 m 97,212
Total Index 100
154 98 99 109 84
89,360 79,798 73,664 63,927 63,605
92 82 76 66 65
RTE cereals account for the majority of advertising support at around 90-95%. Across the period advertising budgets have almost halved from a high of 92.6 million in 1998. In the hot eating sector, levels of support have been more stable, with an extremely strong year in 1999 when levels rose to more than 7 million. This increase in support coincides with new activity in the sector arising from the launch of Quaker Oatso Simple. In 2002, 8% of spend was directed towards hot eating. Figures for 2003 indicate just 6% of spend directed towards hot eating, the level expended in 2001. In fact, the hot cereal segment experienced strong gains in 2002 and 2003, demonstrating the effectiveness of the additional spending in 2002.
RTE cereals
Figure 16 examines the advertising support behind the main RTE brands, comparing 2001 with 2003.
Figure 16: Main monitored media advertising expenditure on RTE breakfast cereals, by selected brands, 2001 and 2003
2001
2003
% change
000s
% of RTE total 9.0
000s
% of RTE total 12.4
2001-03
6,227 Cornflakes* Cereal Range Coco Pops Crunchy Nut** Special K Cereal Fruit n Fibre Frosties*** 2 Week Challenge Other Kellogg Total Kellogg 2,605 1,263 5,858 35,986 3,728 Shredded Wheat Bitesize Cheerios Cereal Shreddies Cereal Shredded Wheat Cereal Other Nestl Total Nestl 2,629 1,989 4,025+ 1,138 2,031 15,540 5,263 5,414 5,697 5,790 3,132
7,407
+18.9
7.8 8.2 8.4 4.5 3.8 1.8 8.5 52.1 5.4
3,996 2,012 6,988 6,056 2,422 3,692 32,573 1,989
6.7 3.4 11.7 10.1
-26.2 na +22.7 +4.6 -
4.1 6.2 54.5 3.3
-7.0 na -37.0 -9.5 -46.6
3.8 2.9 5.8 1.6 2.9 22.5 7.6
2,757 2,720 3,224 3,084 3,478 17,252 3,942
4.6 4.6 5.4 5.2 5.8 28.9 6.6
+4.9 +36.8 -19.9 +171.0 +71.2 +11.0 -25.1
Weetabix Minibix Mini Crunch Alpen Muesli Crrrunch! Other Weetabix Total Weetabix 3,293 1,957 1,455 1,631 13,599 1,636 Harvest Crunch Sugar Puffs Other Quaker Oats Total Quaker Oats 1,399 3,035 958 Other brands 69,118 Grand total 100.0 59,743 100.0 -13.6 2.0 4.4 1.4 1,406 4 1,410 693 2.4 0.0 2.4 1.2 +0.5 na -53.5 -27.7 4.8 2.1 2.8 2.1 2.4 19.7 2.4 1,941 1,504 428 7,815 3.2 2.5 0.7 13.1 na na -23.1 na -73.8 -42.5 -
* ** *** +
includes Cornflakes Banana Crunch includes Crunchy Nut Red, Crunchy Nut Clusters includes Choco Frosties includes Shredded Wheat Sporties
Kellogg
Accounting for more than 50% of total category spend, Kellogg remains the dominant voice within the RTE sector. With an advertising budget of 32.6 million in 2003, this represents a 10% decline in total spend levels from 2001. Cornflakes and Crunchy Nut Cornflakes receive the majority of the budget, giving each a share of voice of around 12% across the RTE category. At around 7 million per brand, Cornflakes represents a 19% increase versus 2001, while CNCF saw an increase of 23%. In an attempt to revitalise Cornflakes , Kellogg relaunched the 80-year-old brand in March 2003. Selling 240 million boxes per year, the new pack design, with silver foil bags is intended to keep the product fresher. New TV adverts were aired featuring a modern-day take on Sleeping Beauty . Other adverts featured a girl getting ready for work, or children leaving Santa some Cornflakes. One execution supports the new Cornflakes Banana Crunch product. The brand receives ongoing press and PR campaigns linked with in-store activity. Kellogg's Cornflakes also sponsors Chris Tarrant's Capital Radio breakfast show. Kellogg claims that 4 million bowls of Cornflakes are consumed each day. TV support for Crunchy Nut Cornflakes centred on the strapline 'ludicrously tasty' and among the differing adverts screened across the period, one linked with a competition to travel for a year 'go nuts and leave it all behind'. Crunchy Nut Clusters were reported to have been backed by a 1.3 million TV and sampling campaign, featuring a taste description challenge and inviting viewers to register their comments online to win a trip to New York. During 2003, the Frosties budget fell by 7% when compared to 2001 to just under 2.5 million, accounting for 3.4% share of voice within the RTE category. In 2003, Frosties moved away from Tony the Tiger for the first time in 50 years. Instead, the brand was linked with Cartoon Network characters including Johnny Bravo and The Powerpuff Girls . Another series of adverts used the strapline 'Earn Your Stripes' and urged boys to set challenges to prove their abilities. TV support was also provided for Chocolate Frosties using the strapline 'discover the dark side'. Kellogg allocated nearly 4 million in 2003 for support across the cereal range. Several adverts were created to link with in-pack promotions such as Creature Comforts and Wobble Heads. By advertising the promotion, several brands were featured during the same advert, thus bringing some economies of scale within the advertising budget, although this was a decline from 2001. Support for Fruit 'n' Fibre was withdrawn in 2003, an indication that the brand is struggling within the health sector. Similarly, All-Bran's sponsorship of the Channel 4 quiz show Countdown was not renewed in September 2002 as other opportunities were explored. In contrast, Coco Pops received 2 million in 2003 to help promote its new Coco Pops Crunchers cereal. TV adverts featured Rocky the Racoon targeted at older children, the new Coco Pops variant are larger and crunchier than the original brand. Special K cereal, which is performing well within the health sector, increased share of voice to 10.1% with a reduced budget of 6 million in 2003. Kellogg repeated adverts for the 'two week challenge' with drop a jean size in two weeks during January 2004 to capitalise on the postChristmas dieting peak.
Cereal Partners
Unlike all the other manufacturers, Cereal Partners increased advertising spend by 1.3% across
the period 2001-03, to account for just under 30% share of voice within the RTE category. The 17.25 million budget was split fairly evenly across the brands with Shredded Wheat, Shredded Wheat Big Biscuit and Bitesize Shredded Wheat accounting for 30% of Nestl's budget at over 5 million. In August 2002, a TV campaign was launched to promote Bitesize Shredded Wheat , the advertising used humour in family situations to push the message of health, with the strapline '100 per cent honest cereal'. Shredded Wheat doubled up with Cheerios in adverts featuring Gaby Logan pointing out the differences between men and women, with the need to 'think about your heart'. The ability to promote more than one cereal during each advert brings some economies of advertising scale. Another TV advert features a boy at school unable to concentrate as he skipped breakfast, and the nutritional message 'helps kids concentrate' is used to promote Shreddies and Cheerios . Support for Shreddies increased across the period by over 36% to reach 2.7 million, accounting for 5% share of voice within the RTE category. After seven years of the 'blue hunger monster' and the strapline 'keeps hunger locked up till lunch', Shreddies advertising changed in 2003 to focus on mums rather than children. Various adverts show young children concentrating at play, conveying the message that they need energy to get them through the day. The new campaign uses the strapline 'Shreddies energy is steady energy'. Support for Cheerios increased just 5% across the period, minor when compared to other brands for the advertiser. Press and TV adverts used the strapline 'there's a whole lot of good in those little 'o's'. Accounting for nearly 6% share of voice within the RTE category, 3.5 million was allocated to 'other Nestl'. In September 2002, Cereal Partners announced a new animated TV campaign to promote Cookie Crisp , featuring a wolf character called Chip who attempts to steal the new cereal from children at the breakfast table with springs under his feet. In January 2003, Golden Nuggets feature an advert using 'Flash' software, which is quick and has lower development costs. Entitled 'Jurassic', the 40-second advertisement featured long-time characters Pete and sidekick donkey Pardner. Golden Grahams TV adverts feature two lads being active, listening to music, playing football and asks 'which one are you?'.
Weetabix
Total spend across the Weetabix portfolio fell by 42.5% across the period to 7.8 million. The main brand, Weetabix, attracted half of this budget with 3.9 million in support. While the level of support fell across the period 2001-03 by 25%, the share of voice within the total RTE category held at around 6.6%. From May 2002, Weetabix stopped using the 'Withabix Withoutabix' campaign, and started using the strapline 'Generating energy for everyone' to remind consumers of Weetabix's health benefits. Humorous TV adverts included caretakers curling a mop bucket down a school corridor, and bell ringers. A press campaign showed children engaged in various activities. The 4.75 million of support for Minibix and Crrrunch in 2001 was transferred into Mini Crunch in 2003, at a level of 1.9 million, representing 3.2% share of voice. During summer 2002, Weetabix
rebranded its Minibix and Nature's Own brand names and rebadged the products under the Weetabix name. The Minibix range - Fruitibix, Bananabix. Chocolate Minibix and the honeycovered Weetabix Crrrunch - were rebranded as Weetabix Mini Crunch , in banana, chocolate, fruit and nut, and honey flavours, while Nature's Own was relaunched as Weetabix Organic . Other support included a sampling campaign at Capital FM's 'Party in the park' in summer 2003. Support for Alpen held at around 2.5% share of voice, although the budget fell by 23% from 1.96 million in 2001 to 1.5 million in 2003. In May 2002, the Alpen cereals range expanded as Advantage Wheatflakes and Crunchy Bran were rebranded. A new 5 million advertising campaign was launched, aimed at women in their early thirties, and using the strapline 'Alpen Nourishment, not punishment'. A press campaign for the No Added Sugar variant featured a sulky looking toddler and the strapline 'Sweet, but not too sweet'. Cause-related marketing features strongly at Weetabix. In 2003 the company continued its support of UK primary schools sports days, with free materials sent to 9,000 schools. Using the strapline 'Energy for Everyone', materials include a teacher's guide, stickers for pupils, coloured bibs, finishing tape, classroom posters on nutrition and fitness and a parents' booklet.
Quaker
Total spend across the Quaker brands fell by 53% across the period 2001-03, from just over 3 million in 2001 to 1.4 million in 2003. Share of voice within the RTE category halved from 4.4% to 2.4%. Sugar Puffs received the entire budget, while support for Harvest Crunch in 2001 was not continued. In July 2003, Sugar Puffs were relaunched in new packaging, giving the Honey Monster mascot more emphasis. Television support featured a new advert described as a take on the Nescaf Gold Blend series.
Other
Support for 'other' brands showed a similar pattern, with a fall of nearly 28% in total spend while maintaining share of voice at 1.2%. In April 2002, a new TV and press campaign was launched by Jordans Cereals. Claiming 1.1 million of support, the adverts included the strapline 'All the best from Jordans Country', and featured the voice of Joanna Lumley. Seeds of Change ran a press campaign from August 2003 featuring a hungry shark and lion, using the strapline 'Only organic fed human tastes like human really should'.
Hot cereal
Figure 17 examines the advertising support behind the main hot cereal brands, comparing 2001 with 2003.
Figure 17: Main monitored media advertising expenditure on hot breakfast cereals, by manufacturer and brand, 2001 and 2003
2001
% of hot total
2003
% of hot total
% change
000s 2,569 Quaker Oatso Simple Scotts Porridge Oats Scotts So Easy 1,629 937 35.6 20.0 55.6
000s 2,137 55.3
2001-03 -16.8
1,918 6
49.7 0.2
17.7 -99.4
1,975
44.4
200 1,723
5.2 44.6
-12.8
Weetabix Ready Brek 1,975 4,546 Total

Data may not equal totals due to rounding Source: Nielsen Media Research/Mintel
44.4 100.0
1,723 3,862
44.6 100.0
-12.8 -15.0
Quaker
Support for Oatso Simple accounted for 90% of the Quaker advertising budget within the hot eating sector, providing a 50% share of voice from a 1.9 million spend. TV adverts centred on taste and aroma attributes. One execution for Baked Apple showed a lady reminiscing about childhood apple pie, another execution featured a man shopping for a present, both use the strapline 'Oatso hot, oatso tasty, oatso simple'. Quaker also supported the launch of the new Oatso Simple Smoothies in August 2003, targeting children and teens. The other hot eating brands received minimal support, yet Quaker claim that the sector has been aided by the regularity of porridge eaten on Big Brother during 2003. Quaker estimates that an additional 500,000 consumers now eat porridge.
Weetabix
Once again, Weetabix' total budget of 1.7 million saw a 0.25 million decline versus 2001, and
share of voice remained level. A new Ready Brek campaign in 2003 highlighted the importance of a good nutritional start to the day for children. With TV adverts featuring the strapline 'Let them glow', one execution shows mothers talking in the street, one mother has a 10-year-old son strapped to her chest.
Below-the-line activity
The breakfast cereal market is dominated by below-the-line promotions across both brand and own-label products. Mintel monitored 3,997 promotions between February 2002 and January 2004, split between price promotion, on-pack offers and in-pack giveaways. A selection of the most recent promotions are presented here, and are not intended to present a complete view of all product promotions, but a selection representative of activity in the market.
Price-related promotions boost volumes

Figure 18 shows price-related promotions in the breakfast cereal market.
Figure 18: Price-related promotions in the breakfast cereal market, February 2002-January 2004
Brand
Promotion
Outlet
Jordans: - Country Crisp - Special Muesli Buy 2 for 3 Buy 2 for 4.50 Sainsbury's Tesco
Kellogg: - X-Men 2 - Coco Pops - Special K - Frosties Rollback 78p 1.99 Special Price Rollback 1.98 Buy 2 for 3 Asda Tesco Asda Tesco
Nestl: - Golden Grahams - Shredded Wheat - Cookie Crisp - Shredded Wheat Bitesize - Fitness Buy 2 for 3.80 Save 39p Buy 2 for 3.60 Special Price 1.29 Safeway Sainsbury's Safeway Tesco
Save 40p
Tesco
Quaker: - Oatso Simple - Harvest Raisin Crunch Buy 2 for 2.50 Save 40p Asda Sainsbury's
Weetabix: - Weetabix Buy 2 for 2.50 Asda
Own-label: Asda Bran Flakes Safeway Sultana Bran JS Frosted Flakes Tesco Coco Crunchies
Source: POS+/Mintel
Rollback 93p Buy 2 for 3 Save 64p Save 25p
Asda Safeway Sainsbury's Tesco
Multibuy price promotions are used by both brand and own-label as a good mechanic for driving weight of purchase. This type of promotion is effective for established products, as consumers tend to be reluctant to buy heavily into new, unfamiliar products, in case of rejection. Breakfast cereals are constrained by their relatively large pack size, as shoppers may be attracted by deals, but are often limited in their storage space within the home. Some of the heaviest consumers of
cereal tend to be those in smaller households who are less likely to have space for bulk buying and stocking. Price discounting is also used widely, once again by brand and own-label. With so many brands in the market and large 'noisy' retailer fixtures, a price discount acts as an incentive to shoppers to purchase across the promotions. The sheer number of price promotions in the category ensures that shoppers can always buy breakfast cereal on deal, regardless of the on-pack and in-pack promotions that are also presented. It is interesting to note, however, that according to consumer research commissioned for this report, only 8% of respondents look for cereals on a promotion or special deal, with promotions falling behind other factors such as brand, health or appeal for the children.
In-pack promotions generate appeal

Figure 19 shows in-pack promotions in the breakfast cereal market.
Figure 19: In-pack promotions in the breakfast cereal market, February 2002-January 2004
Brand
Promotion
Kellogg: - Frosties & Family brands - Cornflakes & Family Brands - Hunny B's Creature Comforts models Free Wobble Head Free Piglet Bookmark
Nestl: - Shreddies & Kids Brands Finding Nemo Water Squirter
Quaker: - Sugar Puffs Free Marvel Stickers & Harvest Cheweee cereal bar
Weetabix: - Weetos - Weetos

Source: POS+/Mintel
Justice League Spinning Pencil Topper Free Cereal bar inside
In-pack promotions are the domain of the branded manufacturers. Promotions tend to be targeted towards the children's sector and rely on popular licences, related to films and cartoon characters, to generate appeal. Promotions tend to operate on a collectable basis, which encourages children to 'pester' for repeat purchase in order to complete their set. In September 2003, Kellogg linked with Cartoon Network for their 'Wobble Heads' promotion, 14 million packs contained a free insert, across the main Children's brands. Similarly, the popular Creature Comforts animals were inserted in 12 million packs from October 2003, across a range of family brands. Weetabix and Quaker have been able to insert cereal bars inside their breakfast cereal boxes to stimulate trial of these products. This offers a cheap alternative to more traditional sampling methods. In January 2003, Weetabix ran an on-pack promotion in conjunction with The Prince's Trust, aiming to raise 500,000 for the charity.
On-pack promotions dominate

Figure 20 shows on-pack promotions in the breakfast cereal market.
Figure 20: On-pack promotions in the breakfast cereal market, February 2002-January 2004
Brand
Promotion
Kellogg: - Fruit 'n Fibre & Health brands - Cornflakes - Banana Crunch Cornflakes - Banana Crunch Cornflakes - Coco Pops Free bestsellers from Amazon.co.uk Cut out lion King Mask Try Me Free Introductory Price 1.19 25% Extra Free
Mornflake: - Organic Oats Free Recipe Book offer
Nestl: - Shredded Wheat & sub-brands - Honey Nut Shredded Wheat - Cinnamon Grahams - Frosted Shreddies Eat for 1 at Toby Carvery 50% Extra Free Cut out Hulk mask Special price 99p
Quaker: - Sugar Puffs - Sugar Puffs Free Mini Puma Footie Boot 33% Extra Free
Weetabix: - Weetabix - Weetabix - Weetabix - Alpen No Added Sugar Win a Mini Cooper Top Trumps offer Special Price 99p Le Creuset Ovenware & Kettle offer
Own-label: Asda Choco Cornflakes Win a Family holiday to Orlando
Safeway Cornflakes Safeway Honey Nut Cornflakes Sainsbury's Frosted Flakes Tesco Honey Nut Cornflakes Tesco Rice Snaps
Source: POS+/Mintel
50% Extra Free 2 for 1 night Hotel offer Win a Lord of the Rings DVD & Game Win a Luxury Lifestyle Instantly Disney's Jungle Book Offer
On-pack offers dominate the breakfast cereal market, as one of the few grocery categories than can make the most of a large, printable packaging surface. Both brands and retailer own-brands participate in these types of promotion. Competitions to win items, collecting coupons to redeem against a voucher and back-of-pack activities for children all feature strongly. Many of these promotions can offer educational or charitable benefits. In February 2002, Quaker's Sugar Puffs ran a promotion offering free UCI Cinema tickets on cereal packs. Cereal Partners linked with publisher Puffin to offer 3 million children's books in packs of Cheerios and Honey Nut Cheerios in October 2002. Extra volume promotion packs are also used widely across both own-label and branded products. As a mechanic to increase weight of purchase, these packs offer better value for money for the shopper.
02/2004

Distribution
Multiple grocers span into convenience
Multiple grocer strength continues to dominate. The physical size of packages and the wide choice of brands within the breakfast cereal market require a large amount of selling space. With the explosion of new products offering out-of-home breakfast, the convenience and independent channels would seem to be focusing attention away from the traditional breakfast cereal market and more towards the impulse cereal bar market.
Figure 21: UK retail distribution of breakfast cereal, 2001 and 2003
2001
2003 (est) m % m m %
% change 200103* +6.9
972 Multiple grocer fascias Convenience Independent/others** 53 43 1,068 Total
1,565
91
1,039
1,621
93
85 69 1,719
5 4 100
45 34 1,117
70 53 1,742
4 3 100
-15.1 -20.9 4.6
* **
in sterling terms includes health food stores and discount stores Data may not equal totals due to rounding

Source: Mintel
The multiple grocer channel is evolving as the leading multiples continue their strategy towards developing smaller high street and forecourt stores, in an attempt to optimise their presence in the convenience channel. The boundaries between channels are starting to merge. Data have been presented for the leading multiple grocers according to the store group, rather than splitting sales according to store size. As such, supermarket, forecourt and convenience sales are aggregated under the heading 'multiple grocers fascias'. With the number of new stores proliferating within the multiple grocer sector, Mintel estimates share to be 93%, a value increase of 6.9% over the period 2001-03. This growth is likely to be driven through the convenience store format, with distress purchasing and top-up shopping driving growth. Sales within the convenience and independent sectors are suffering, at just 4% and 3% value share respectively. Within the independent channel, the decline is likely to be a result of several factors including: fierce competition from larger professional retailers; overstocked and confusing fixture displays; and sub-optimum ranging. The convenience channel, while tending to adopt category management principles more thoroughly in terms of more rigorous ranging and adhering to planograms, has lost share of the new multiple grocer 'high street' format.
A change of focus
Within the convenience and independent channels, alternative breakfast products such as cereal bars and morning goods provide a more attractive proposition. Physically smaller, these items do not occupy as much shelf space as breakfast cereals and can command premium prices. They are able to be merchandised at point of purchase, to maximise impulse sales for a faster rate of sale. Cash margin generated for these products is considered to be more attractive than that for breakfast cereal. As such, the convenience and independent channels would appear to be focusing attention away from the packaged breakfast cereal market, towards impulse breakfast products. Sales through the traditional large grocery stores continue to account for the bulk of volume. The fixture is confusing. With many price promotions and on-pack offers competing for attention among a myriad of colourful brands and own-label offerings, the breakfast cereal market occupies a large amount of aisle space. Slightly different segmentation is used across the main grocers, along the general theme of: - Children's - Family flakes and biscuits - Adult health - Muesli and crunchy oat products - Hot eating, including oats and porridge - Organic. Muesli and crunchy oat products tend to occupy the higher shelves, being higher in price due to their premium ingredients. Porridge and rolled oats tend to be placed on the bottom shelves and do not grab attention with hot eating brands placed above them. Family, children and adult products tend to merge into the main body of the fixture, with children's products positioned at
waist height to meet the eye of a child and aid pester power. Organic tends to occupy a separate bay, usually blocked with other organic packaged grocery lines.
Other channels pose no threat to multiple dominance

Health and wholefood stores offer a wide range of breakfast cereals, but their position is consistently under threat from the increased availability of organic and 'free-from' products available in the multiple grocers. All own-label products are offered by the multiple grocers in their Internet shopping portals, with no mainstream competition from other Internet businesses. Farmers' markets, similarly, are not likely to take any sales from the multiples.
02/2004

The Consumer
Penetration of breakfast cereals, although high, is in gradual decline. Children and the elderly remain the most loyal to the breakfast eating occasion, while snacking appears to be taking off slowly. The following sub-sections look at overall penetration and weight of usage data, first comparing penetration in the UK compared to other European countries, and then examining UK usage in greater detail.
Pan-European comparison
This section of the report draws on the TGI Europa survey of around 10,000 adults to examine the use of breakfast cereal. Before looking at the Britons' breakfast cereal usage in more detail, Figure 22 compares use and frequency of use of breakfast cereal in the four countries covered by this series of reports. Respondents were asked: Have you eaten breakfast cereal in the last 12 months? Figure 22 examines household penetration of RTE and hot eating breakfast cereal, by frequency of usage.
Figure 22: Consumption of breakfast cereals, by country, 2003 Base: adults aged 15+
GB % 89.5 Eat breakfast cereals in 2003 Index 174
France % 46.1
Germany % 34.4
Spain % 35.6
Frequency (cereals consumers) More than once a week of which: -Once a day or more -2 or 3 times a week 52.9 23.4 8.3 Once a week Two times a month or less 15.5 68 31.1 21.1 23.2 na na 70 na na 12.8 29.3 33.3 16.2 43.9 22.5 10.4 76.2 117 56.1 62.7 66.4
* unweighted index based on average for all four countries Note that GB data exclude hot breakfast cereal Source: TGI Europa, BMRB - 2003/Mintel
Breakfast cereal is nearly universal in Great Britain, particular when put in comparison with European countries. In particular, Germany and Spain tend not to eat any breakfast cereal at all, and of those who do, much higher percentages tend to eat it once a week or less.
Overall cereal consumption in GB

Breakfast cereal habits within Great Britain are discussed in the following sub-section.
Figure 23: Consumption of breakfast cereals in GB, by age and gender, 2003
Have you eaten them in the last 12 months?

Base: 24,984 adults aged 15+
Cold breakfast cereal % 87.0 All 85.5
Hot breakfast cereal % 41.8
Any % 89.5
37.4
88.0
Men Women 88.4 46.0 90.9
Age group: 15-19 20-24 25-34 35-44 45-54 55-64 65+ 90.2 87.2 90.1 86.9 86.3 85.7 84.5 41.9 38.2 38.5 38.7 43.0 44.2 46.4 91.8 88.6 91.3 88.3 89.1 89.2 88.9
Source: TGI Europa, BMRB - GB 2003/Mintel
Penetration levels run at nearly 90% for the UK population for all cereals. RTE peaks with the youngest groups, while hot cereal peaks with the oldest groups. Women have higher penetration than men for both products; looking at Mintel's Weekend vs Weekday Eating Habits - UK, Market Intelligence, October 2002, men are considerably more likely than women to eat a cooked breakfast, both during the week and on the weekend. Many men tend to be less concerned with the fat content of their cereals, and may be looking for meals considered heavier or more filling. Developing cereals that may be considered heartier or more substantial may be one avenue to explore to attract more men to the product.
Figure 24: Consumption of breakfast cereals in GB, by income and working status, 2003

Cold breakfast cereal % 87.0
Hot breakfast cereal
Any
% 41.8
% 89.5
All
Yearly income group: 0-7,499 7,500-13,499 13,500-22,999 23,000-53,999 54,000 and over 85.2 85.1 86.6 88.6 88.2 43.9 44.2 43.8 40.8 39.4 88.5 88.5 89.6 90.7 90.2
Working status: Full-time Part-time Not working 86.6 90.4 86.3 37.7 44.2 44.4 88.5 91.9 89.5
Given the age findings shown in Figure 23 and the income results in Figure 24, it is apparent that hot breakfast cereal has a natural audience among the retired age groups. While convenience is a clear benefit of breakfast cereals, older consumers will have more time available to prepare hot cereals from scratch and so may not automatically choose the instant varieties. It is clear that it is with RTE breakfast cereal where trading up is most likely to occur. Cold breakfast cereal remains relatively consistent across income groups, although it does tend to peak with the highest income groups, who are potentially working longer hours and choosing a quick breakfast more often.
Figure 25: Consumption of breakfast cereals in GB, by region, 2003

Cold breakfast cereal
Hot breakfast cereal
Any
% 87.0 All 83.9 Greater London South East/East Anglia South West Wales East and West Midlands North West Yorkshire & Humberside North Scotland 87.3
% 41.8
% 89.5
43.4
86.9
41.8
89.1
87.6 85.9 87.4
42.6 41.5 41.9
89.4 88.1 90.1
87.0 89.4
39.9 40.7
89.4 91.6
87.7 87.0
37.5 44.8
89.6 91.7
As might be expected, promotions for hot breakfast cereal would fare better in Scotland than in any other region. Londoners, meanwhile, perhaps need convincing that RTE breakfast cereal offers them a form of health and convenience not met by other competing breakfast products. However, it is in this region where competition with cereal bars is probably greatest.
Children's market makes impact

Figure 26: Consumption of breakfast cereals in GB, by presence of children and household size, 2003

Cold breakfast
Hot breakfast
Any
cereal % 87.0 All 90.4 Children No children 85.2
cereal % 41.8 % 89.5
41.7
91.6
41.9
88.4
Number of people in household: 1 2 3 4 5 or more

83.4 86.2 87.8 89.5 88.9
41.4 42.6 41.5 39.3 45.2
86.9 89.3 89.5 91.4 90.2
Large packs and multipacks should do well, as those respondents in the largest (five or more people) households tend to eat both types of cereal more than other households. However, given that it is the number of one-person households which is set to grow the fastest, manufacturers should also be looking at smaller, more convenient pack sizes. Results suggest that adults will probably never be as important to the market as children and that attempts to push breakfast cereals to adults should be tempered with equal attempts to reach out to the children's market, as is already the case.
Weight of usage
With penetration for cold cereal high across most demographic groups and consistently high across the UK population, it is necessary to identify the infrequent, regular, and avid cereal eaters.
Frequency of consumption of cold breakfast cereal
The following sub-sections examine heavy, medium and light usage, gauged by how regularly cereal is eaten: once a day or more; two to three times per week; or once a week or less. In addition, for Figures 28-31, Mintel has calculated a Volume Importance Index (VII) to indicate those groups of consumers who contribute most highly to volume sales. This is calculated by multiplying the incidence of use with the highest usage percentage and comparing it with the result for all adults. It follows that, where a high proportion of product users use a product frequently, they will produce a high index and these will be relatively most important for volume sales. Correspondingly, low usage and low frequency will produce a low index.
Figure 27: Frequency of consuming cold breakfast cereals, 2003
About how often do you eat them?

Base: 21,563 adults aged 15+ who eat breakfast cereals
Source: TGI Europa, BMRB - GB 2003/Mintel Figure 28: Frequency of consuming cold breakfast cereals, by age and gender, 2003 Base: 21,563 adults aged 15+ who eat breakfast cereals
Once a day or more % 52.9 All adults 51.3 Men Women 54.3
2-3 times a week
Once a week or less % % 23.8
VII
23.4
100
23.6
25.0
95
23.1
22.6
104
Age group: 15-19 20-24 52.1 46.3 24.7 27.4 23.2 26.3 102 88
25-34 35-44 45-54 55-64 65+
49.8 48.3 48.4 57.1 63.9
23.8 25.1 24.7 20.6 19.8
26.4 26.6 26.9 22.2 16.2
97 91 91 106 117
Findings suggest that those aged 55+ and, to a lesser extent, women would be most receptive to multibuy/money-off deals and perhaps large packs of breakfast cereal, as they are the most frequent eaters of any type. Where use is less frequent tends to be for those who are aged 20-24 and 35-54. This would indicate the erosion in the frequency of breakfast occasions in general, as consumers eat breakfast cereal less often in the week while working (in fact, full-time workers have the lowest penetration for cereal). However, more than half of respondents tend to eat cereal once a day or more, demonstrating its status as a staple.
Figure 29: Frequency of consuming cold breakfast cereals, by yearly income group and working status, 2003

Base: 21,563 adults aged 15+ who eat breakfast cereals
Once a day or more % 52.9 All adults
2-3 times a week
Once a week or less %
VII
% 23.8 100
23.4
Yearly income group: 0-7,499 7,500-13,499 13,500-22,999 56.1 54.7 56.5 25.1 24.0 22.8 18.8 21.3 20.7 104 101 106
23,000-53,999 54,000 and over
50.5 47.1
24.0 24.5
25.4 28.4
97 90
Working status: Full-time Part-time Not working 45.9 53.0 58.5 25.3 22.6 22.1 28.8 24.4 19.5 86 104 110
Looking at the index identifying the heaviest users, income and working status have little impact. The highest differences fall for the highest income groups, which tend to eat cereal the least regularly, while those not working (again, likely retired) tend to be the heaviest users. Urbanites skip on breakfast cereal
Figure 30: Frequency of consuming cold breakfast cereals, by region, 2003

Base: 21,563 adults aged 15+ who eat breakfast cereal
Once a day or more % 52.9 All adults 44.2 Greater London South East/East Anglia South West 54.2
2-3 times a week
VII
% 23.8 100
23.4
23.6
32.2
81
22.7
23.1
103
52.8
25.3
21.9
100
Wales East and West Midlands North West Yorkshire & Humberside North Scotland
52.1 55.9
25.4 21.9
22.5 22.2
97 106
53.7 54.0
24.3 23.5
22.0 22.5
102 105
58.2 50.6
22.7 23.7
19.1 25.7
111 96
RTE breakfast cereal clearly has to compete with coffee shops and sandwich bars in the capital while workers commute. Those in London have the highest penetration level for cereal bars as well (see Mintel's Cereal Bars - UK, Market Intelligence, February 2004 ), tending to buy food in convenience packaging.
Figure 31: Frequency of consuming cold breakfast cereals, by presence of children and household size, 2003

Base: 21,563 adults aged 15+ who eat breakfast cereal
Once a day or more % 52.9 All adults 51.1 Children No children 53.8
2-3 times a week
VII
% 23.8 100
23.4
24.6
24.4
100
22.7
23.4
100
Number of people in household:
1 2 3 4 5 or more
53.9 55.5 49.2 50.8 53.4
24.2 21.5 26.4 23.9 22.0
21.9 23.1 24.4 25.3 24.5
98 104 94 99 103
Presence of children and household size tend to have little impact on the frequency of cold cereal consumption. Somewhat surprisingly, the heaviest users skew slightly towards childless households, although the presence of children is key to purchasing cereal overall.
Frequency of consuming hot breakfast cereals

Hot cereal enjoys a considerably lower penetration level than cold cereal, and tends to have heavily weighted importance among certain demographics. This sub-section identifies hot cereal eaters by their frequency of use. Again, for Figures 32-35, Mintel has calculated a Volume Importance Index (VII) to indicate those groups of consumers who contribute most highly to volume sales. This is calculated by multiplying the incidence of use with the highest usage percentage and comparing it with the average for all adults. It follows that, where a high proportion of product users use a product frequently, they will produce a high index and these will be relatively important for volume sales. Correspondingly, low usage and low frequency will produce a low index.
Figure 32: Frequency of consuming hot breakfast cereals, by gender and age, 2003
How often do you eat them?

Base: 10,647 adults aged 15+ who eat hot breakfast cereal
Once a day or more % 13.6 All 13.8
2 or 3 times a week
Once a week or less % % 70.3
VII
16.1
100
16.9
69.3
91
Men Women 13.5 15.6 71.0 109
Age group: 15-19 20-24 25-34 35-44 45-54 55-64 65+ 12.7 9.0 7.8 9.8 10.4 17.1 22.8 9.9 13.5 13.1 13.7 15.2 21.2 20.8 77.4 77.5 79.1 76.5 74.5 61.7 56.4 94 60 53 67 79 133 186
As stated earlier in this section of the report, the retired are clearly the best targets for hot cereals. However, the family-aged groups (eg 25-54) could be encouraged to eat hot cereals more often than once a week. Although the market is faced with some inherent obstacles, due to the perception of seasonality of hot cereal, certainly moves to target parents, informing them of the benefits of a hot breakfast for this children, are a step in the right direction. Age weighs in heavily across other groups
Figure 33: Frequency of consuming hot breakfast cereals, by yearly income group and working status, 2003

Once a day or more % 13.6
2 or 3 times a week
VII
% 70.3 100
16.1
All
Yearly income group: 0-7,499 7,500-13,499 13,500-22,999 23,000-53,999 54,000 and over 14.0 19.4 15.4 12.2 6.4 18.9 17.8 16.3 13.8 15.5 67.1 62.7 68.3 74.0 78.1 108 151 119 88 44
Working status: Full-time Part-time Not working 10.6 9.6 16.9 12.9 16.8 18.2 76.6 73.6 64.9 70 75 132
Source: TGI Europa, BMRB - GB 2003/Mintel Figure 34: Frequency of consuming hot breakfast cereal, by region, 2003

Once a day or more % 13.6 All 11.2
2 or 3 times a week
VII
% 70.3 100
16.1
19.2
69.6
86
Greater London South East/East Anglia South West Wales East and West Midlands North West Yorkshire & Humberside North Scotland 13.2 15.3 71.5 97
13.1 21.3 15.3
16.4 14.7 14.3
70.5 64.0 70.4
98 155 113
13.7 11.7
18.7 12.2
67.6 76.1
96 84
14.9 12.6
14.6 19.1
70.6 68.3
98 99
Supermarkets in Wales, and to a lesser extend in the Midlands and in the North, should ensure that their shelves are well stocked with hot cereals. A market polarisation in household types
Figure 35: Frequency of consuming hot breakfast cereals, by presence of children and household size, 2003

Once a day or more % 13.6 All adults 10.8
2 or 3 times a week
VII
% 70.3 100
16.1
12.3
77.0
79
Children No children 15.1 18.1 66.8 111
Number of people in household: 1 2 3 4 5 or more

16.0 15.5 12.4 11.3 10.1
18.9 19.2 13.2 12.4 13.7
65.1 65.3 74.4 76.3 76.1
117 116 91 78 80
Small households (one or two people) tend to be the heaviest users, while larger households (families) tend to be the lightest users. This further suggests a polarisation of the market by age between the elderly and the young, as young families do not eat hot cereal while small, retired households do.
Children - breakfast habits and breakfast cereal

As the presence of children is a key indicator of cereal purchase, Mintel went on to draw upon data collected for BMRB's TGI survey for youth and children. Figures 36-38 present data from TGI's Youth Survey of 5,859 youths aged 7-14. Respondents were asked: Do you eat breakfast cereal? Penetration of breakfast cereal among children is very high at 91.8%, with just 8.2% claiming not to eat any (not tabulated). The following sub-section looks at competing breakfast foods for kids.
Competition from other breakfast foods

The younger aged subset, children aged 7-10, were also asked: What food do you regularly eat for breakfast? The results are presented in Figure 36.
Figure 36: Food regularly eaten for breakfast amongst children aged 7-10, 2003
Base: children aged 7-10
2003 %
Things eaten for breakfast: Cereal Toast Cooked breakfast/fry-up Porridge Fruit Something else Nothing
Taken from Youth TGI survey of 5,859 youths aged 7-19 years Source: Youth TGI, BMRB Autumn 2003/Mintel
90 73 29 24 23 22 2
Even with habits changing away somewhat from breakfast cereal, nearly 90% of children reported that breakfast cereal was eaten regularly for breakfast. Because they do not have to prepare it themselves, children tend to have more varied items for breakfast, with relatively high penetration across several traditional breakfast items, such as toast, traditional cooked breakfast, porridge or fruit. Older youths, in the 11-14 age group, were also asked: What food do you regularly eat for breakfast? The results are presented in Figure 37.
Figure 37: Food regularly eaten for breakfast amongst youths aged 11-14, 2003
Base: children aged 11-14
2003 %
Things eaten for breakfast:
Cereal Bread, croissant, toast Fruit juice Milk Fruit Cooked breakfast/fry-up Porridge Yogurt Something else
68 41 29 19 8 8 8 6 20
Trending away from cereal While breakfast cereal is still the most popular breakfast item for the majority of the 11-14 age group, the older group's habits are changing already, trending away from the product. With more autonomy in their eating, this age group tends to eat less healthy alternatives for breakfast. Indeed, a fifth indicate they eat 'something else', most likely biscuits, sandwiches, muffins or other convenience items. They are probably a likely target for cereal bars. A wider repertoire The selection of breakfast items appearing on the list is much broader for the older children, including croissant and yogurt as well as fruit juice. Porridge is not a regular breakfast item, accounting for just 7.6%. This may be explained by the absence of a 'youth' brand actively targeting this audience. With the recent introduction of Quaker's Oatso Simple Smoothies, the market will be better positioned to gauge appeal in the coming years. As evidenced by Cereal Partners' recent launch of Lion cereal, confectionery brands will move more into the market to accommodate children's tastes. How much cereal for kids? Of those who answered yes to the question in Figures 36 and 37, respondents were then asked: How many helpings of breakfast cereal do you eat in a normal week?
The data presented in Figure 38 show the weekly frequency of breakfast cereal consumption among 7-14-year-olds in 2003.
Figure 38: Cereal helpings in a normal week amongst youths aged 7-14, 2003
Base: children aged 7-14 who eat cereal
2003 % 11.3
More than 8 7-8 5-6 2-4 1 or less

31.2 23.1 21.8 12.6
Some 43% of children aged 7-14 eat cereal seven or more times a week, which is actually less than the adult population overall (of which 54% eat cereal more than once a day). Just 12.6% of children reported having breakfast cereal once or less per week. While this number is relatively low, in a population where children numbers are in decline, this represents a challenge to the industry. While children are important to the breakfast cereal market, these data indicate that, even at 7-14, they do not yet have their breakfast habits in place. The market will be challenged to encourage this group to eat cereal as regularly as their older counterparts, rather than opting for convenience foods or cereal bars. Mintel is able to offer further analysis of its exclusive research, tailored to individual clients' needs. It is possible, for example, to net and/or combine codes to create new attitudinal, usage or demographic groups, and cross-analysis can show how the answers to any questions or categories are related. For further details and a quote, please call our statisticians - Peter Ayton or Shaheed Alam - on 020 7606 4533.
02/2004

The Consumer - Attitudes and Behaviour Critical consumer findings

In what is a mature market, extending penetration of breakfast cereals is not without obstacles. This is particularly the case when adults and children alike are pressed for time in the morning. The full cooked breakfast during the week virtually disappeared years ago, and now even breakfast cereals look like they may be falling prey to snacking and eating on the go (albeit not to the same extent as a full English). In this section of the report, Mintel examines attitudes towards cereals and looks at purchasing behaviour. When combined with the results of the previous section (The Consumer), several findings point towards possible ways in which the breakfast cereal market could maintain its position as the number one breakfast food, while possibly extending usage into other eating occasions. These findings are summarised here. 1. Findings show that family groups are clearly the most important to the market; however, the retired cannot be ignored. Indeed, they are the best targets for hot cereals and, more importantly, are likely to eat breakfast cereal on two occasions other than breakfast and are brand-loyal. They may therefore be responsive to multibuy offers. Additionally, they are likely to respond positively to on-pack messages showing the health benefits of a particular cereal, or even a relevant causerelated marketing campaign. Given the ageing population, this group will be vital in the future. 2. In a population where the number of children is in decline, the industry should be encouraging 7-14s, who TGI data show as not having their breakfast habits in place, to eat cereal regularly. However, this will be difficult given the propensity for children, particularly older children, to turn to more convenient products (eg biscuits, muffins, sandwiches, etc) in the morning, as well as after school, some of which they will be buying with their own pocket money. Indeed, TGI data show that those aged 11-14 are already turning away from breakfast cereals, although they may be a likely target for cereal bars. 3. Given the TGI Youth findings, as well as the results of Mintel's exclusive consumer research, there may be an opportunity to market 'snack packs' of certain cereals. For years, children have been sticking their hands into the cereal box for a quick snack. While breakfast cereal-branded cereal bars have gone a long way towards meeting snacking requirements, there may be a market for cereals packaged in crisp packet-sized packaging, eaten straight out of the packet or poured into a bowl as desired. In fact, Weetabix launched its Mini Crunch as single-serve packs to be eaten dry or with milk in 2001. Although some attempts have been made by the industry to penetrate the snack market in this fashion and met with various degrees of success, data indicate real potential for this tactic. Such products could find particular favour in London, where competition from other convenience
products is fierce. 4. Small selection packs such as these could also help to target the burgeoning one-person household population. 5. Targeting consumers in Expanding neighbourhoods might yield positive results, but consumers in this category could be encouraged to eat cereals on more than one occasion. 6. Results suggest that Iceland could do well in stocking more breakfast cereals. Furthermore, Marks & Spencer could benefit from expanding its breakfast cereal offering somewhat to target several different eating occasions. Again, smaller-sized 'snack packs' might work here. 7. Findings suggest that cross-promotions between healthy eating cereals and children's products might find favour among women, ABs and those aged 35-44, all of whom tend to keep a number of different cereals in their cupboard, as well as eating 'healthy' cereal. Very young children may want to eat what their parents are eating, yet may not like 'healthy' cereals. Likewise, parents may not want to eat the sweet cereals that their children like. Perhaps there is an opportunity to create adult versions of children's favourites - for example, a high-fibre/low-sugar version of Frosties. Parents could feed their children the traditional version, while sticking with the adult version for themselves. 8. There could be an opportunity here to create a children's cereal that could be marketed as a quick dinner or even a dessert. Such a cereal would not, of course, be designed for everyday consumption, but for when a quick, convenient meal is required. 9. Health benefits are likely to find favour among those in Scotland, who are avid porridge eaters anyway. These benefits would have to be advertised mainly on well-known brands, which consumers north of the border prefer. Such benefits should also be promoted to those living in neighbourhoods classified as Rising. 10. New product launches are probably best trialled in the North West.
Occasions for eating breakfast cereal

In addition to the TGI data presented in the previous section, Mintel has commissioned exclusive research into this market through BMRB. Research took place during November 2003 to assess the habits of consumers towards breakfast cereals. The results are tabulated in the following Figures. To shed further light on their cereal eating habits, respondents were asked: Still thinking about breakfast cereals, specifically cold, ready-to-eat cereals, which of these, if any, would you say apply? While it would be expected that the majority eat breakfast cereal only at breakfast, this is not the case. Figure 39 presents a clearer picture of when breakfast cereal is eaten.
Figure 39: Occasions for eating breakfast cereal, November 2003 Base: 1,003 adults aged 15+
87 At breakfast During the week At the weekend As a snack When I'm in a hurry At lunch At dinner time When I'm on a diet/trying to lose weight At work, but not at the canteen For dessert Any other time
Source: BMRB/Mintel
34 32 26 9 7 7 6 2 1 11
Results have been netted and presented in Figure 40.

Figure 40: Occasions for eating breakfast cereal (nets), November 2003 Base: 1,003 adults aged 15+
Source: BMRB/Mintel
Results demonstrate the inroads that the market has made in diversifying the times that breakfast cereal can be eaten in the minds of the consumer. Cereal can be perceived as a sweet and/or healthy snack, making it a replacement for less healthy desserts and snacks for those who are diet-minded.
Snacking may be taking off

Figure 41 examines the responses by demographic analysis.
Figure 41: Occasions for eating RTE cereal, by gender, age and socio-economic status, November 2003 Base: 1,003 adults aged 15+
I eat breakfast cereal at breakfast
I eat breakfast cereal as a snack
I eat breakfast cereal at any other mealtime % 10
I eat breakfast cereal during the week
I eat breakfast cereal at the weekend
% 87 All 86 Men
% 26
% 34
% 32
22
12
34
33
Women
88 76
29 33
8 18
34 36
32 38
15-19* 20-24 25-34 35-44 45-54 55-64 65+ 92 74 83 89 92 97 90 AB C1 C2 D E

* low sub-sample Source: BMRB/Mintel
35 30 37 21 22 12 22
6 16 12 10 9 4 7
36 27 35 32 37 37 37
31 27 28 35 34 36 34
87 87 81 86
26 28 30 23
13 9 10 14
36 34 28 30
35 34 28 25
Promoting breakfast cereal as a snack is likely to find favour among the under-45s, in particular those aged 35-44. The problem here, however, is that breakfast cereals do not fit well within the average working person's day. Smaller, portable cereal products, with or without milk included, are an obvious way to target these consumers. This group are probably also turning to cereal bars. Promoting cereal as an inexpensive snack may find favour among Ds. Clearly, Kellogg's promotion of the Special K diet should have yielded positive, albeit modest, results, with 10% eating breakfast cereal at any other time. Findings suggest that shops near colleges or universities may find their shelves depleted of breakfast cereals, as 15-19s are the most likely to eat cereal at meals other than breakfast, clearly taking advantage of their convenience, not to mention the low cost.
A burgeoning base of loyalty
Figure 42: Occasions for eating RTE cereal, by presence of children, lifestage and Mintel's Special Groups, November 2003 Base: 1,003 adults aged 15+
I eat breakfast cereal at any other mealtime % 10
I eat breakfast cereal during the week % 34
I eat breakfast cereal at the weekend % 32
% 87 All
% 26
Presence of children: Own aged 0-4 Own aged 5-9 Own aged 10-15 Own any 0-15 Own none 80 77 78 78 91 31 36 30 32 23 12 14 10 11 10 29 34 36 34 34 29 33 33 34 32
Lifestage: Pre-/no family Families Third age Retired 84 78 92 97 32 32 23 12 14 11 10 4 32 34 33 37 28 34 32 36
Special Groups: ABC1 pre-/no family ABC1 families ABC1 third age ABC1 retired Two full-time earners One-person households under 65
Source: BMRB/Mintel
86 81 94 98 84 90
30 29 22 10 29 32
13 11 11 5 11 14
34 37 35 40 37 23
30 35 34 38 31 21
Probably little targeting will need to be done towards retired consumers, who are typically brandloyal anyway and, being set in their habits, will continue to eat cereals at breakfast for the foreseeable future. Furthermore, this bodes well for the breakfast cereals market due to the ageing nature of the population. Those in busy child-rearing years (especially those with children aged 5-9) in particular eat cereal as a snack. These shoppers likely have little time to prepare even snacks for themselves, and snack on the cereal they stock for themselves and/or their children. Widespread snacking With the exception of the retired, and to a lesser extend the third age groups, all other lifestage groups are snacking on breakfast cereal (at around 30% agreement). Snacking is confined to between meal occasions, as only 10% of respondents report eating breakfast cereal as a meal other than breakfast. Figure 43 continues the demographic analysis.
Figure 43: Occasions for eating RTE cereal, by marital status, working status and household size, November 2003 Base: 1,003 adults aged 15+
I eat breakfast cereal at any other mealtime
I eat breakfast cereal during the week
I eat breakfast cereal at the weekend
% 87 All
% 26
% 10
% 34
% 32
Marital status: Married Not married 88 85 23 30 9 12 33 36 32 33
Working status: Working Not working Retired 85 89 97 29 23 15 12 9 5 34 35 38 31 33 37
Household size: 1 person 2 persons 3 persons 4 persons 5 persons+

Source: BMRB/Mintel Figure 44: Occasions for eating RTE cereal, by region and ACORN categories, November 2003 Base: 1,003 adults aged 15+
92 91 85 84 73
20 20 36 25 38
9 9 13 9 13
30 35 36 34 34
27 33 32 35 32
I eat
I eat
I eat
I eat
I eat
breakfast cereal at breakfast
breakfast cereal as a snack
breakfast cereal at any other mealtime % 10
breakfast cereal during the week % 34
breakfast cereal at the weekend % 32
% 87 All
% 26
Region: London South East/Midlands Wales/West/South West Yorkshire/North East North West Scotland 81 92 90 86 28 28 23 24 10 13 6 15 33 37 30 38 32 40 32 32
87 88 88
26 25 26
8 12 11
27 49 29
27 41 32
ACORN categories: A - Thriving B - Expanding C - Rising D - Settling E - Aspiring F - Striving 93 86 86 88 86 80 23 29 25 27 23 26 10 8 14 9 15 9 39 32 33 30 34 35 36 30 27 28 36 37

Source: BMRB/Mintel
Respondents in Wales are the most likely to eat breakfast cereal at other meal occasions at 15%, while Southerners are most likely to snack on cereal at 28%. Weekend cereal eaters stand out in the South and North West, although both regions also have an above-average likelihood to eat during the week.
Assessing enthusiasm for breakfast cereals

Breakfast cereal is accepted by the majority of the UK population as a breakfast product. However, Figures 45-51 present the 'repertoire' of breakfast cereal eating occasions, to further detail those who eat cereal at times other than breakfast, and possibly identify which groups are more interested in/receptive to changing their cereal habits. Figure 45 is a topline view; it presents the results from the entire sample, including those who do not eat breakfast cereal.
Figure 45: Number of occasions breakfast cereal eaten, November 2003 Base: 1,003 adults aged 15+
% 19 None One Two Three Four+ 41 13 16 12 100 Total

* does not equal 100 due to rounding Source: BMRB/Mintel
Of the entire sample, most (41%) eat cereal on just one occasion. However, more than a quarter of respondents state they eat cereal at three or more occasions, demonstrating the versatility of the product. There are few complete meals that people find suitable for eating throughout the day, and breakfast cereal has evidently made progress in this arena.
Single-occasion snackers could present opportunities

Figure 46 presents the results of just those who eat once per day.
Figure 46: Single-occasion breakfast cereal eaters, November 2003 Base: 415 breakfast cereal eaters aged 15+ that eat on only one occasion
Eat breakfast on only 1 occasion % 82 At breakfast At lunch At dinner time As a snack For dessert When I'm in a hurry At work, but not at the canteen When I'm on a diet During the week At the weekend Any other time 1 2 7 2 1 1 2 3 100 Total
Data may not equal 100 due to rounding Source: BMRB/Mintel
Results again suggest that promoting cereal as a snack could yield positive results. An overwhelming majority of those who eat cereal at just one occasion choose to do so at breakfast. While this is unsurprising, there remain 7% who eat it only as a snack, as well as 3% who eat at other meal occasions.
Cross-promotion opportunities?
Figures 47-51 present the results by demographic details.
Figure 47: Number of occasions breakfast cereal eaten, by gender, age and socio-economic status, November 2003 Base: 1,003 adults aged 15+
None % 19 All 23 Men Women 15 21 15-19* 20-24* 25-34 35-44 45-54 55-64 65+ 14 17 22 20 20 16 19
One % 41
Two % 13
Three % 16
Four+ % 12
Any % 81
43
15
11
77
40 35
16 16
17 18
12 10
85 79
45 42 36 44 40 46 43
8 17 15 11 13 9 7
16 12 13 13 16 24 20
18 12 14 12 11 6 11
86 83 78 80 80 84 81
AB C1 C2 D E
* small sub-sample Source: BMRB/Mintel
15 23 17 20
43 37 40 42
11 14 22 13
17 14 12 15
14 12 9 10
85 77 83 80
Cereal manufacturers are clearly correct in their targeting of figure-conscious women in advertisements (eg Special K). Again, university-aged respondents tend to be more versatile in their cereal eating times.
Using health messages and CRM could prove fruitful

Figure 48: Number of occasions breakfast cereal eaten, by lifestage, presence of children and Mintel's Special Groups, November 2003 Base: 1,003 adults aged 15+
None % 19 All
One % 41
Two % 13
Three % 16
Four+ % 12
Any % 81
Lifestage: Pre-/no family Families Third age Retired 22 15 22 16 39 41 40 46 13 14 14 9 14 16 12 24 13 14 12 6 78 85 79 84
Presence of children: Own aged 0-4 Own aged 5-9 Own aged 10-15 Own any 0-15 Own none 12 15 16 15 20 46 38 43 41 41 13 18 13 14 12 17 13 15 16 16 12 15 14 14 11 88 85 84 85 80
Source: BMRB/Mintel
16 15 25 13 27 20
46 41 39 48 35 44
8 11 11 6 11 17
16 18 15 26 13 6
15 15 12 7 13 14
84 85 76 87 73 80
Findings show that, while family groups obviously cannot be ignored, the retired are also important to the market, being more likely to eat cereals on three occasions. In doing so, they may be responsive to multibuy offers. This group of consumers may also respond to on-pack health messages or even relevant cause-related marketing campaigns. As shown later in this section, the retireds also tend to stick to one type of brand. With older consumers heeding warnings about maintaining adequate fibre and whole grain intakes, it may be that brand extensions of already-established products will be able to capitalise on the brand loyalty of this group.
Diversity with the retired and part-time workers

Figure 49: Number of occasions breakfast cereal eaten, by working status and household size, November

2003 Base: 1,003 adults aged 15+
None % 19 All
One % 41
Two % 13
Three % 16
Four+ % 12
Any % 81
Working status: Full-time Part-time Retired Not working 25 12 14 16 39 34 46 44 12 18 8 14 13 21 21 14 11 15 10 11 75 88 86 84

Source: BMRB/Mintel
18 19 17 20 20
45 40 41 41 39
13 13 12 12 12
15 18 14 16 15
8 11 16 11 14
82 81 83 80 80
Results again point to the problem the breakfast cereal market faces in terms of portability for those in full-time employment. Findings for Cereal Bars - UK, Market Intelligence, February 2004 indicate that those who are working, whether full-time or part-time, are turning to cereal bars in response to this. While in some cases they are purchasing cereal-line bars, they also have a high
incidence of purchasing 'other' brands, such as Tracker or McVitie's.

Figure 50: Number of occasions breakfast cereal eaten, by region and ACORN categories, November 2003 Base: 1,003 adults aged 15+
None % 19 All 21 London South East/Midlands Wales/West/South West Yorkshire/North East North West Scotland 23 13 24
One % 41
Two % 13
Three % 16
Four+ % 12
Any % 81
43
10
15
12
79
32 47 38
17 12 12
12 18 12
17 11 15
77 87 77
18 12 20
46 35 45
15 14 11
15 23 13
7 16 11
83 89 80
ACORN categories: A - Thriving B - Expanding C - Rising D - Settling E - Aspiring 22 11 21 19 23 37 45 45 44 38 12 16 8 13 9 18 14 15 15 16 12 15 11 9 13 79 90 79 81 77
F - Striving
Source: BMRB/Mintel
15
42
14
17
12
85
Targeting consumers in Expanding neighbourhoods might prove fruitful, but consumers in this category could be encouraged to eat cereals on more than one occasion. Regionally, while more in the South tend to be non-users, those who do eat cereal in the region tend to eat at a wider variety of occasions.
Figure 51: Number of occasions breakfast cereal eaten, by media usage, commercial TV viewing and supermarkets used, November 2003 Base: 1,003 adults aged 15+
None % 19
One % 41
Two % 13
Three % 16
Four+ % 12
Any % 81
All
Media usage: Internet users Broadsheet readers Mid-market tabloid readers Popular tabloid readers Have access to satellite/cable/digital TV 21 17 18 20 20 40 43 37 40 43 10 10 16 16 11 16 17 15 13 15 13 13 14 12 12 79 83 83 81 80
Commercial TV viewing: Light (0-2 hours/day) 19 40 12 17 12 81
Medium (2-5 hours/day) Heavy (5+ hours/day)
18 18
40 44
13 13
18 13
11 12
82 82
Supermarkets: Asda Co-op Iceland Marks & Spencer Morrisons Safeway Sainsbury's Tesco
Source: BMRB/Mintel
17 24 15 18 11 13 19 17
39 37 35 32 50 44 43 40
15 11 14 11 11 12 9 14
17 21 19 21 15 21 18 16
14 7 17 19 13 12 11 13
83 76 85 83 89 88 81 83
Results show that reaching the target audience can be achieved through any type of newspaper and of course on television, as there are few significant variations for cereal eating occasions by media usage. Overall, those who shop at Morrisons and Safeway tend to be cereal eaters, but only at one occasion, breakfast. Marks & Spencer could benefit from expanding its breakfast cereal offering somewhat to target several different eating occasions. Data indicate that Iceland shoppers tend to be avid cereal eaters, and would at least occasionally replenish their cereal stocks when shopping at Iceland, particularly if wider ranges of cereal were available there.
Breakfast cereal attitudes and purchasing behaviour

Respondents were supplied a list of attitudes and behaviours, mainly pertaining to their opinions and choices for brands, as well as their stocking/purchasing habits. The following sub-section examines the responses from the total sample, while cereal eaters only are presented subsequently. Which of these, if any, would you say apply to breakfast cereals? You may choose as many as you like.
Figure 52: Attitudes towards and purchasing habits for RTE cereals, November 2003 Base: 1,003 adults aged 15+
% 42 I tend to eat the same brand of cereal most of the time I tend to have a number of different cereals in my cupboard I tend to eat healthy cereals I prefer to eat well-known brands I like to try new cereals I buy cereals that the children like I look out for cereals that have special offers/promotions I prefer to eat a shop's own-brand of cereals I buy cereals the children ask for with specific gifts/offers I often eat a cereal I've seen advertised recently 35 28 27 15 14 8 6 5 2 18 Never buy/eat cereal
Source: BMRB/Mintel
For the majority, who, as established, tend to eat cereal once a day, half are truly habitual in their choices, eating the same brand most of the time. However, more than a third tend to have a number of different cereals, while just a sixth like to try new kinds. Although children are a core target, and suppliers have responded by targeting this group with more 'advanced' giveaways on boxes (such as CDs or games) to retain them, few (5%) agreed with the statement 'I buy cereals the children ask for with specific gifts/offers'. Figures 53-56 look at the results by demographic categories.
Conservative repertoires for older adults

Figure 53: Attitudes towards and purchasing habits for RTE cereals, by gender, age and socio-economic status, November 2003

I tend to eat the same brand of cereal most of the time
I tend to have a number of different cereals in my cupboar d % 35
I tend to eat healthy cereals
I prefer to eat wellknown brands
I like to try new cereals
I buy cereals that the children like
I look out for cereals that have special offers/ promoti ons % 8
% 42 All 43 Men Women 41 30 15-19* 20-24* 25-34 35-44 45-54 55-64 65+ 41 37 29 46 43 58 40
% 28
% 27
% 15
% 14
27
22
23
12
42 26
33 19
30 16
18 35
19 -
10 11
36 31 49 34 33 28 41
26 18 32 27 29 35 42
23 28 20 30 25 35 26
16 19 14 12 10 10 13
4 25 34 15 3 2 15
5 13 9 9 7 5 6
AB C1 C2 D E
45 38 43 40
32 33 34 31
23 24 22 21
25 28 31 24
16 16 16 13
16 11 13 13
10 10 7 9
Findings suggest that new product launches are most likely to be taken up by the young, while money-off coupons could find favour among those aged 45+, who are very brand-loyal. Findings suggest that cross-promotions between healthy eating cereals and children's products might find favour among women, ABs and those aged 35-44, all of whom tend to keep a number of different cereals in their cupboard, as well as eating 'healthy' cereal. Results call into question the effectiveness of special promotions.
Families would turn to multibuy offers

Figure 54: Attitudes towards and purchasing habits for RTE cereals, by lifestage, presence of children and Mintel's Special Groups, November 2003 Base: 1,003 adults aged 15+
I tend to have a numb er of differe nt cereal s in my cupbo ard % 35
I tend to eat health y cereal s
I prefer to eat wellknow n brand s
I like to try new cereal s
I buy cereal s that the childr en like
I look out for cereal s that have specia l offers/ promo tions
% 42 All
% 28
% 27
% 15
% 14
% 8
Lifestage: Pre-/no family Families Third age Retired 38 33 43 58 28 48 30 28 21 29 27 35 19 27 28 35 20 17 10 10 2 39 5 2 6 13 7 5
Presence of children: Own aged 0-4 Own aged 5-9 Own aged 10-15 Own any 0-15 Own none 31 28 35 33 45 44 49 51 48 29 30 29 28 29 27 22 25 27 27 26 18 16 18 17 14 37 52 41 39 3 14 16 12 13 6
Source: BMRB/Mintel
45 31 43 59 37 43
29 54 28 27 39 24
21 36 30 41 22 19
21 26 20 36 25 21
22 13 11 11 10 17
1 43 5 3 17 1
6 13 6 5 5 8
As noted earlier, health messages are likely to find favour among older respondents. Given their brand loyalty, these consumers may take up brand extensions, so long as the brand and the health message were clearly marketed. Clearly multibuy offers across a range, or indeed any special offers, will be most readily taken up by ABC1 families. Targeting parents of older children presents something of a challenge. However, older children may be at a stage where they are purchasing some food products for themselves. Competition from other convenience foods (eg crisps, chocolate, etc) may prove too strong for breakfast cereal manufacturers. Findings again show that new product launches will find most favour with the young.
One-person households stick to their habits

Figure 55: Attitudes towards and purchasing habits for RTE cereals, by working status and household size, November 2003 Base: 1,003 adults aged 15+
I tend to have a number of different cereals in my cupboar d % 35
I buy cereals that the children like
I look out for cereals that have special offers/ promoti ons % 8
% 42 All
% 28
% 27
% 15
% 14
Working status: Working Not working Retired 37 47 57 36 33 30 27 28 32 25 29 32 17 13 9 18 10 1 9 8 7

Source: BMRB/Mintel
53 47 34 36 29
27 29 40 45 39
26 31 25 26 27
26 28 29 25 21
15 12 18 18 15
2 4 16 29 35
6 7 8 9 16
Findings again point towards the importance of both families and the retired groups.
Expanding ACORN group and expanding selection

Figure 56: Attitudes towards and purchasing habits for RTE cereals, by region and ACORN categories, November 2003 Base: 1,003 adults aged 15+
I tend to have a number of differen t cereals in my cupboa rd % 35
I buy cereals that the childre n like
I look out for cereals that have special offers/ promoti ons
% 42 All
% 28
% 27
% 15
% 14
% 8
Region: London 40 29 29 21 14 16 5
South East/Midlands Wales/West/South West Yorkshire/North East North West Scotland
37 48 46
37 36 35
29 28 21
33 26 21
15 12 13
12 13 17
10 7 13
45 40 36
34 46 29
24 32 33
28 31 37
17 20 12
16 16 12
11 8 11
ACORN categories: A - Thriving B - Expanding C - Rising D - Settling E - Aspiring F - Striving

Source: BMRB/Mintel
43 48 40 43 37 37
36 44 25 35 28 35
31 28 38 28 20 23
28 31 15 25 25 32
14 16 9 16 17 15
13 16 17 14 11 15
7 8 6 8 11 10
Cross-promotions across a range of products are likely to be best received in the North West and in supermarkets in Expanding regions. Health benefits are likely to find favour among those in Scotland, who are avid porridge eaters anyway, although such benefits would have to be advertised mainly on well-known brands. Medical findings, however, suggest that health messages may not be getting across as Scotland suffers particularly high rates of heart disease. Such benefits should also be promoted to those living in neighbourhoods classified as Rising. New product launches are probably best trialled in the North West.
Targeting breakfast cereal occasions

Figure 57 explores the interaction of consumer behaviour and attitude. For this exercise, the
results of the first question in Mintel's exclusive consumer research have been cross-referenced with those from the second question. So, for example, 54% of those who eat cereal at breakfast tend to eat the same brand most of the time, compared to an average of 51%.
Breakfast routine or variety

Figure 57: Attitudes towards breakfast cereals, by eating occasions, November 2003 Base: 1,003 adults aged 15+
I tend to eat the sam e bra nd of cere al mos t of the time
I tend to hav ea num ber of diffe rent cere als in my cup boa rd % 43
I tend to eat heal thy cere als
I pref er to eat well kno wn bra nds
I like to try new cere als
I buy cere als that the chil dre n like
I look out for cere als that hav e spe cial offe rs/ pro moti ons
% 51 All 54 I eat breakfast cereal at breakfast I eat breakfast cereal at any other mealtime I eat breakfast cereal as a snack I eat breakfast cereal during the week I eat breakfast cereal at the weekend
Source: BMRB/Mintel
% 34
% 33
% 18
% 17
% 10
44
37
34
18
15
10
49 47 51 49
48 53 56 57
35 36 52 53
43 40 48 47
22 29 23 24
23 25 22 22
16 15 15 17
As family members are likely to choose different cereal for their breakfast, a range of options in the cupboard may be a necessity, there may also be some mixing of 'healthy' and 'indulgent' products to create a customised bowl of cereal tailored to exact requirements. There is relatively little variance for those who eat cereal during the week or weekend by attitudes; even though, according to consumer data presented in Weekend versus Weekday Eating Habits UK, Market Intelligence, October 2002 , respondents indicated they took their time and were much more likely to eat a traditional fried breakfast on the weekend. However, Figure 57 indicates they still eat cereal at some point during the day. Snacking drives repertoires Those who snack on cereal exhibit some slightly different behaviour in terms of breakfast cereal. Most especially, they tend to be influenced by what the children like, and they tend to keep a wider variety of cereals.
Identifying targets
For this exercise, Mintel used a technique known as cluster analysis. This is a means of categorising the whole sample of consumers according to their responses to a specified series of questions. The programme assesses, by statistical means, to which group of like-minded consumers each and every member of a sample belongs. This means that each group can be promoted to in a similar way or will find particular products attractive. However, because it is allinclusive, there will be 'outliers who are attached to the most appropriate group but who might still be somewhat individualistic in their outlook/behaviour.
Overview
Loyal Only to Children (21% of respondents). These have the lowest brand loyalty (only one in 11 tend to eat the same brand) but virtually all (98%) have different cereals in the cupboard. Some of these are very likely to be children's products, as over a quarter of these respondents tend to buy cereals that their children like. Marketing message: Target with money-off or special buys on children's cereals. It is likely that they will buy whatever is on special offer that particular week. Low Interest (49% of respondents). These had low responses for all choices with, marginally, the highest (at just 9%) who like to buy own-label. Marketing message: The coldest targets. Healthy Swappers (13% of respondents ). Almost six in ten (59%), the highest percentage of any group, like to try new cereals and even more (83%) choose well-known brands (accordingly, only 4% prefer to eat own-label). Nearly three quarters (74%) of this group tend to eat healthy cereals and a quarter look out for special offers/promotions. One in nine, the highest of any group, claim to buy cereals recently advertised. Marketing message: Target this group with a combination of health messages - relayed through advertising as well as on-pack - and special promotions. Brand-loyals (18% of respondents). All of these tend to eat the same brand and none claim to be influenced by advertising. Accordingly, they are also unlikely to try new products. Marketing
message: Although unlikely to try new products, they could be tempted with brand extensions. The cluster groups are examined by demographic data in Figures 58-62.
Figure 58: Identifying targets: breakfast cereal consumer groups, by gender, age and socio-economic status, November 2003 Base: 817 respondents aged 15+ who eat breakfast cereal
Low Interest
Loyal Only to Children % 21
Brand-loyals
Healthy Swappers % 13
% 49 All 57 Men Women 41 58 15-19* 20-24* 25-34 35-44 45-54 55-64 65+ 47 53 41 51 51 46 42 AB C1 51
% 18
18
17
23 16
20 10
16 16
29 19 34 15 21 10 21
19 12 13 22 17 30 23
5 16 12 12 11 14 15
22
16
12
C2 D E
52 50 53
20 19 21
15 19 17
13 12 10
The coldest targets are men and those in the youngest age category (this is surprising, as the youngest age groups tend to have diverse cereal eating habits. However, this is a small subsample, and combined with those aged 20-24 would be less markedly in the Low Interest group). Brand extensions find favour among ABs and those aged 65+. Cereal manufacturers already know that health messages should be targeted at women, but those in the youngest age categories may also respond well to such messages. Women, who still tend to do most of the household shopping, constitute the most important point of contact for suppliers within the cereal market, as they exhibit traits favourable for growth. Namely, they like to try new products, are interested in healthy (and often higher-priced) products and tend to choose well-known brands.
Brands resonate with older respondents

Figure 59: Identifying targets: breakfast cereal consumer groups, by lifestage, presence of children and Mintel's Special Groups, November 2003 Base: 817 respondents aged 15+ who eat breakfast cereal
Low Interest
Brand-loyals
% 49 All
% 18
Lifestage: Pre-/no family 57 20 13 10
Families Third age Retired
39 54 46
30 17 10
16 18 30
15 11 14
Presence of children: Own aged 0-4 Own aged 5-9 Own aged 10-15 Own any 0-15 Own none 38 40 40 39 53 33 32 31 30 17 15 13 15 16 19 14 15 13 15 12
Source: BMRB/Mintel Figure 60: Identifying targets: breakfast cereal consumer groups, by working status and household size, November 2003 Base: 817 respondents aged 15+ who eat breakfast cereal
54 34 59 43 50 65
19 33 15 11 24 14
15 18 16 32 16 10
12 16 11 14 10 11
Low Interest
Loyal Only to
Brand-loyals
Healthy
Children % 49 All % 21 % 18
Swappers % 13
Working status: Full-time Part-time Retired Not working 55 39 46 47 22 21 15 23 13 21 27 17 11 20 12 13

Source: BMRB/Mintel
56 50 46 46 45
12 17 22 25 32
21 22 17 14 13
11 11 16 15 11
Clearly, and as would be expected, large packs and multibuys will find most favour among large households.
Healthy habits in the South and Scotland

Figure 61: Identifying targets: breakfast cereal consumer groups, by region and ACORN categories, November 2003 Base: 817 respondents aged 15+ who eat breakfast cereal
Low Interest
Brand-loyals
% 49 All 57 London South East/Midlands Wales/West/South West Yorkshire/North East North West Scotland 49 44 53
% 18
16
19
15 23 26
17 23 12
18 10 9
51 37 50
20 28 14
17 18 18
12 18 18
ACORN categories: A - Thriving B - Expanding C - Rising D - Settling E - Aspiring F - Striving

Source: BMRB/Mintel
48 36 62 48 58 46
20 26 14 21 16 23
18 23 15 17 15 21
14 15 9 14 12 10
Results suggest once again that competition for breakfast from other convenience products is
fierce in London. Health messages relayed on television adverts placed in the South, the North West and in Scotland may prove to be of benefit to the health cereal sector. Targeting residents living in Expanding neighbourhoods seems most obvious from Figure 61, while supermarkets in or near Rising neighbourhoods may possibly find a somewhat receptive market for their own-label cereals.
Figure 62: Identifying targets: Breakfast cereal consumer groups, by media usage, commercial TV viewing and supermarkets used, November 2003 Base: 817 respondents aged 15+ who eat breakfast cereal
Low Interest
Brandloyals
Healthy Swappers
% 49 All
% 18
% 13
Media usage: Internet users Broadsheet readers Mid-market tabloid readers Popular tabloid readers Have access to satellite/cable/digital TV 48 44 42 52 46 22 18 22 22 24 16 21 23 16 17 14 17 14 11 13
Commercial TV viewing: Light (0-2 hours/day) Medium (2-5 hours/day) 53 45 13 24 19 19 15 13
Heavy (5+ hours/day)
49
23
18
11
Supermarkets used: Asda Co-op Iceland* Marks & Spencer Morrisons Safeway Sainsbury's Tesco
45 47 44 44 36 46 45 46
25 16 22 22 18 21 25 22
16 20 14 22 27 18 15 18
14 18 20 12 19 15 15 15
Brands will do well in Morrisons, while healthy cereals should get more shelf space at the Co-op, as well as Iceland. While Iceland appeals to shoppers who are stocking up on frozen items, they may also be picking up necessary staples, including breakfast cereal. Morrisons' shoppers are most likely to be Brand-loyal, and along with Co-op and Iceland shoppers, are the most likely to be Healthy Swappers. Children's cereals advertised on television are obviously quite widely seen, with medium and heavy viewers falling into the Loyal Only to Children group. Advertisements for any cereal placed in the popular tabloids may go unnoticed, while muesli may find a potentially effective advertising home in the broadsheets.
Healthy cereal swappers look for product and time variety

Mintel then looked at the number of occasions on which cereals are eaten among each breakfast cereal consumer group. This means that, for example, among the Low Interest group, 38% do not eat cereal at all, compared to an average of 19%.
Figure 63: Number of breakfast cereal eating occasions, by breakfast cereal consumer groups, November 2003 Base: 1,003 adults aged 15+
None % 19 All Loyal Only to Children Low Interest Healthy Swappers Brand-loyal 38 -
One % 41
Two % 13
Three % 16
Four+ % 12
47
15
24
14
45 25 38
10 18 13
4 29 29
3 28 20
Data do not equal 100 due to rounding Source: BMRB/Mintel
Some 47% of the Loyal Only to Children group eat on only one occasion. Potentially, this could be an opportunity to create/market a children's cereal as a quick dinner or specifically as a dessert. Such a product may find favour among this group. Healthy Swappers and Brand-loyals do not need such persuading, as they tend to eat at three or more occasions. Most of those in the Low Interest group eat just one time throughout the day; as discussed in Figure 46, in most cases, this is breakfast. Mintel is able to offer further analysis of its exclusive research, tailored to individual clients' needs. It is possible, for example, to net and/or combine codes to create new attitudinal, usage or demographic groups, and cross-analysis can show how the answers to any questions or categories are related. For further details and a quote, please call our statisticians - Peter Ayton or Shaheed Alam - on 020 7606 4533.
02/2004

The Future
Children will dominate
Children will continue to influence the breakfast cereal market, as with other markets, despite the reduction in their numbers. The use of character licences, in-pack and on-pack promotions is likely to continue as manufacturers compete for attention with this important group. However, Mintel estimates that the importance of this sector may shift slightly, as the industry looks to other groups, such as the retired, to grow sales.
Healthy older adults

Older adults are extremely loyal to the breakfast occasion, with 97% of those who eat cereal claiming to do so at breakfast. With more conservative tastes, and a mind towards healthier foods, this audience are unlikely to switch to cereal bars or morning goods. The breakfast cereal market is ideally placed to develop this sector, with specific health needs and smaller box sizes for the one-person household.
Snacking needs more development

As the number of 16-24-year-olds swells, the opportunity for developing cereal snacks has never been greater. There are more young people attending university and feeding themselves on a limited budget. 'Meals' are eaten at irregular times, and grazing throughout the day is commonplace. There are more young people living alone. The relatively healthy nature of breakfast cereal has many benefits over the traditional high-fat snacks of crisps and chocolate. While there have been some attempts to enter the snack market, manufacturers must try again, mimicking the category rules of crisps rather than cereal.
Redefinition of 'health'
Sales of the 'bran-bowel' products are already suffering, reflecting a change in the UK mindset that health needs to be 'punishing'. Health brands that are performing well communicate weight control and are positive in tone. Mintel expects to see new, more modern functional health platforms develop, moving beyond vitamin and mineral fortification. The benefits of other ingredients will be emphasised (beyond the main cereal component), and the category will learn from examples set in other sectors, such as yogurt probiotics.
Carbohydrate and Atkins?
With breakfast cereal being very high in carbohydrate, it is unsuitable for low-carbohydrate diets, such as Atkins. Mintel expects to see the impact of low-carb diets across adult sectors in the next two years. Other categories are better placed to exploit this 'craze' while the inherent nature of breakfast cereal is unable to react. With many new product low-carb launches scheduled to hit stores in the first quarter of 2004, the popularity of the Atkins Diet is unlikely to diminish for some time. There are several low-carb cereals on the market at the moment, although most are only available via the Internet. The high price points these products carry could push up values, particularly if they are launched onto the retail trade.
Lobbying groups will make themselves heard

Health and nutrition lobby groups are targeting the food industry at large with criticism. Of particular note, the 'hidden' salt content in processed products has been raised. Manufacturers are responding. In November 2003, Sainsbury's announced that it was reducing the amount of salt included within its breakfast cereals as well as other processed foods. Lobbyists are also claiming that adverts targeted at children are 'brainwashing' them into eating high-fat, high-sugar foods, resulting in an unhealthy diet. Childhood obesity rates are on the increase, fuelling the debate. Some industry experts fear that government intervention may occur, resulting in guidelines for fat and sugar content being imposed on certain foods. Mintel does not think this is likely, such is the strength of the food industry to lobby against any proposal. Mintel does expect to see new rules governing adverts targeted towards children. This is unlikely to have an impact on actual sales of children's products, as new forms of media, from outside the legislating territory, will compensate, such as the Internet and mobile text.
Indulgence will continue

As with all other grocery categories, indulgent products will flourish. Mintel expects to see more confectionery brands entering the breakfast cereal market, a trend started by Cereal Partners' recent launch of Lion cereal. Products will be positioned towards the weekend, as manufacturers seek to develop broader cereal repertoires among adults.
Smaller packages
Finally, Mintel expects to see smaller pack sizes launched in response to one-person households and snacking. Smaller packs provide the opportunity to introduce a new price tier within the category and would also act a good sampling mechanic, lowering the risk of trial on new products.
02/2004

Forecast
Reaching a mature market
With almost nine in ten consumers eating cereal it is difficult to see how suppliers can expand the consumer base much further. The emphasis has, therefore, been on inducing greater frequency of consumption, mainly by encouraging eating outside breakfast time. As The Consumer Breakfast Cereals Attitudes and Behaviour section shows, this has had some success: while 45% of eaters consume cereals other than at breakfast, 42% still eat them only on that occasion. To some extent this is because suppliers have created snacking products, namely cereal bars outside the scope of this report (see Cereal Bars - UK, Market Intelligence, February 2004 ), which are generally more convenient for eating at other times of the day, often outside the home. So, while there is some scope for suppliers to expand eating occasions further, this will not be enough to keep volume sales increasing, as seen in Figure 64.
Figure 64: Forecast of UK volume and value sales of cereal, at current prices, 2003-07
Total 000 tonne Index*
Total m at current prices 1,117 Index* m at current prices 1,039
Rte Index* m at current prices 78
Hot Index*
409 2003 2004 2005 2006 2007 408 406 403 398
100
100
100
100
100 99 98 97
1,140 1,161 1,184 1,208
102 104 106 108
1,052 1,062 1,073 1,085
101 102 103 104
89 98 110 123
114 126 142 158
Total
Total
Rte
Hot
000 tonne
Index*
m at current prices 1,743
Index*
m at current prices 1,621
Index*
m at current prices 122
Index*
409 2003 2004 2005 2006 2007 408 406 403 398
100
100
100
100
100 99 98 97
1,768 1,788 1,823 1,849
101 103 105 106
1,630 1,636 1,653 1,661
101 101 102 102
137 152 170 188
113 125 140 155
* calculated prior to rounding Source: Mintel Figure 65: Forecast of UK retail sales of cereal, at constant 2003 prices, 2003-07
Total m at 2003 prices 1,117 2003 2004 2005 2006 2007 1,126 1,130 1,134 1,139 Total 101 101 102 102 1,038 1,034 1,028 1,023 Index* m at 2003 prices 1,039
Rte Index* m at 2003 prices 78
Hot Index*
100
100
100
100 100 99 98 Rte
88 96 106 116
112 123 136 149 Hot
m at 2003 prices 1,743 2003 2004 2005 2006 2007 1,745 1,740 1,747 1,742
Index*
m at 2003 prices 1,621
Index*
Index*
100
100
100
100 100 100 100
1,609 1,593 1,584 1,565
99 98 98 97
136 148 163 177
112 121 134 146
* calculated prior to rounding Source: Mintel
Value-adding the name of the game

As with so many mature markets, suppliers have turned their attention to encouraging consumers to spend more on the product. Thus, while volume sales are expected to contract by 3%, value sales are expected to grow by 8% in current Sterling terms and 2% in real terms. As a result, prices paid per unit weight will rise by 5% as consumers trade up. Volume sales were struggling at the end of the 1990s but have done better for the first years of this decade, making growth for the past four years increase by 8%. However, the last two years have seen growth slow and Mintel believes that sales have reached a peak.
Slowdown in evidence even in value terms

In value terms the forecast also shows a slowdown. Even the recently star performing hot cereals market is set to slow, although at 58% (compared to 66% for 1999-2003), it still represents a very good prospect. RTE sales will also slow from 9% to 4%, although of course it will still remain by far the larger sector. This does, however, mean that at constant prices the market will contract slightly after 2005. Expressed in euros, because of the reversal in the exchange rate, the market in current terms will
rise by 6% in the next four years; this is considerably under the 15% achieved in the period 19992003. In real terms, however, this will mean a near static market, although it will still dwarf those of the other major Western European economies.
Convenience products a must

While the Big Brother and other media effects may diminish, consumption of hot cereal sales is expected to continue to expand. Younger consumers are more likely to demand quick preparation which suppliers have largely met by launching microwaveable products, thus retaining many of this group as consumers and, consequently, keeping the instant sector fuelling sector growth. However, increasing frequency of consumption among this group is likely to benefit the parallel market of cereal bars - indeed, the report Cereal Bars - UK, Market Intelligence, February 2004 shows their popularity among the young.
The bad news - falling numbers of children

In terms of absolute numbers, relying on the even younger consumers is not a good strategy as the number of 5-14s is set to fall more steeply. While other children's markets have not necessarily suffered, with parents inclined to spend more spend per head on their lower numbers of offspring, consumption is already high among children, and trading up is unlikely to counter fully the fall of 387,000 5-14-year-olds between 2003 and 2007. The decrease between 1999 and 2003 was only 160,000, and the numbers of this age group were the first factor incorporated into the forecast.
The good news - growing affluence helps trading up

The higher socio-economic groups were found to be greater eaters of cereal, and particularly attracted by the healthier products. Their increased share of the adult population will be beneficial for the market and the number of ABC1s was included as a second factor for the forecasting programme. Finally, to give a measure of the ability to trade up we have included PDI as the third variable. Mintel has used the SPSS time series package to forecast the market to 2007. SPSS correlates historic market size data with key economic and demographic determinants (independent variables), identifying those factors having most influence on the market. Using forward projections of these factors, a market size forecast is produced.
02/2004

Bread Fast Cereals

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This Report is the property of Mintel International Group Limited.

Mintel International Group Limited

Breakfast Cereals - UK - February 2004

Skipping breakfast Health concerns and trends

Market has found growth avenue in hot cereal

Children's goes from strength to strength Wheat is still strong

This Report is the property of Mintel International Group Limited.

The Supply Structure Market supply

Hot cereal brands

Companies and brands

Spend on hot eating produced results

This Report is the property of Mintel International Group Limited.

Kellogg Cereal Partners Weetabix Quaker Other Hot cereal

Quaker Weetabix Below-the-line activity Price-related promotions boost volumes

In-pack promotions generate appeal

On-pack promotions dominate

Distribution Multiple grocers span into convenience

Overall cereal consumption in GB

Children's market makes impact

Weight of usage Frequency of consumption of cold breakfast cereal

Frequency of consuming hot breakfast cereals

This Report is the property of Mintel International Group Limited.

This Report is the property of Mintel International Group Limited.

This report is supplied in accordance with Mintel's terms & conditions.

Mintel International Group Limited

Introduction and Abbreviations

This Report is the property of Mintel International Group Limited.

% of population ABC1 socio-economic group 16

This Report is the property of Mintel International Group Limited.

ABC1 pre-/no family ABC1 families

ABC1 third age

Two full-time earners

One-person households under 65 Internet users

Mid-market tabloid readers

Popular tabloid readers

This Report is the property of Mintel International Group Limited.

This Report is the property of Mintel International Group Limited.

NPD R&D RTE TGI

This Report is the property of Mintel International Group Limited.

8566 5000 or via email at phil.greenslade@bmrb.co.uk

This Report is the property of Mintel International Group Limited.

This report is supplied in accordance with Mintel's terms & conditions.

Mintel International Group Limited

Value recovery continues

The corn sector struggles

This Report is the property of Mintel International Group Limited.

Top three manufacturers dominate

Heavily promoted category

This Report is the property of Mintel International Group Limited.

This Report is the property of Mintel International Group Limited.

This report is supplied in accordance with Mintel's terms & conditions.

Mintel International Group Limited

% chang e % 19982003 -5.6

13.2 6.2 5.8 15.3 14.2

7.5 3.8 3.7 7.9 9.0

12.7 6.4 6.2 13.3 15.2

7.1 4.0 3.9 7.5 9.0

11.9 6.7 6.5 12.5 15.0

-2.6 +5.6 +8.8 -11.2 +8.4

-5.3 +5.3 +5.4 -5.1 -

This Report is the property of Mintel International Group Limited.

45-54 55-64 65+

7.7 5.9 9.3 58.3

13.2 10.1 15.9 100.0