Ingredients like chia and quinoa have scored manufacturers points in the thriving hot cereal segment, a Mintel analyst says.
Hot cereal in the US represents 12% of the overall market and is fast outpacing growth in cold cereals, according to Mintel data.
Between May 2012 and 2013, hot cereal pulled in sales of $1.2bn, up 4% on the previous year, amid flat ready-to-eat cold cereal sales. The hot sector has grown 7% in the last two years and PepsiCo Quaker continues to hold a majority share of 57%. Mintel data indicates that the brand with the highest percentage sales increase was Quaker Real Medleys, a portable oatmeal package with mix-ins such as nuts and real fruit. The oatmeal is now Quaker's third best-selling variety in the US after regular Quaker and Quaker Reduced Sugar.
Amanda Topper, food analyst at Mintel, said the perceived health benefits of hot cereal and innovations catering to taste and nutrition preferences have driven growth.
“There is great potential for hot cereal in the US because of recent innovation aligning with consumer product preference,” Topper told BakeryandSnacks.com.
“Areas of innovation impacting sales in the segment include the increase in superfood ingredients. Buzzworthy add-ins such as chia seeds and quinoa are becoming more mainstream as consumers seek protein-rich foods and cereal manufacturers compete with other breakfast items with higher protein levels such as yogurt,” she said.
There have also been new product launches with such as whole grain, high fiber and natural, as manufacturers target health-conscious consumers, she added.
Health and nutrition mind-set – a good fit
A majority of consumers want high fiber (82%) and high protein (81%) to be top of the list on cereals, Topper said, and many hot cereals meet these nutritional preferences.
With consumers increasingly turning to better-for-you food options, the hot cereal segment has naturally benefited, she said.
“I think the most attractive characteristics associated with hot cereal are its high fiber and whole grain content, as well as superfood add-ins, such as quinoa and chia seeds.”
Topper said healthy claims on hot cereal products around fiber and whole grain will mount in 2014.
Future R&D potential in portability, customization and organic
The hot cereal segment will continue to grow over the next year, she said, but there remain untapped opportunities that manufacturers should consider investing in.
“Convenient and portable, single-serve packs and bowls will remain important as Americans continue to snack anytime, anywhere. Products that allow for customization will also be key. For example, Kellogg’s Special K Nourish hot cereal includes the option to add in nuts, fruit, or seeds, and Quaker’s Perfect Portions allows users to portion out their desired amount of oatmeal.”
Manufacturers must also recognize the increased importance consumers place on healthy eating, she said. “The major three manufacturers are developing options with more better-for-you ingredients, including Greek yogurt and chia seeds, and boosting health claims by reducing sugar and increasing fiber.”
She said organic also appears to be an untapped opportunity. “Developing organic hot cereals would align with consumers’ already-existing interest in better-for-you products,” she said.