Convenience helps drive breakfast market

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Related tags: Breakfast

Breakfast food manufacturers that offer the convenience factor as well as health and wellness could see the most growth in a market that is increasingly competitive, according to a new report.

Makers and marketers of breakfast foods are innovating with better-for-you options and convenient solutions that offer ease of use and portability, Mintel said in the report called “Breakfast Foods: The Market - US - November 2008”.

And segments which offer both these benefits are showing the most growth with products such as cereal bars, yogurt, yogurt drinks, and breakfast entrées.

The report said: “Consumers have a wide array of breakfast food choices available within the retail environment, making switching between segments a common occurrence depending on needs and occasion.

“Health and convenience are important propositions that play into the types of breakfast food choices consumers make.”

The report said the breakfast food market has suffered from the “time-crunch”​ that consumers feel in the morning, as well as from the growing number of foodservice breakfast options.

However, it seems that the most innovative products are driven by lifestyle choices based on attitudes towards health and wellness and time.

These cater to consumer interests in diet-slanted products (health by subtraction), functional health (health by addition), and health via ethical manufacturing processes.

It added: “Time proves to be highly influential in the breakfast foods market. With most products aligning with two distinct breakfast types - quick breakfasts (easy to use, easy to prepare, portable) and leisurely traditional breakfasts.”

Market growth

The breakfast food market grew 13 percent at current prices, during 2003-08, but this is a three percent decline when adjusted for inflation.

Mintel expects the future of the market to continue on a steady pattern of growth, however, the rate of inflation is expected to exceed sales increases.

The leading supplier of breakfast foods, according to Mintel, is General Mills, which has major brands in cereal, breakfast breads, sweet breakfast breads, and yogurt, with FDMx sales of $4.3bn – or 12.8 percent share of total sales.

Commodity prices

Meanwhile the rising costs of inputs, including wheat and corn as well as fuel and labor, have led to a steep increase in retail prices across several breakfast food segments.

Consumer prices for cereal and bakery products are expected to increase six percent in 2008 and another two percent in 2009, according to USDA Economic Research Service projections

Mintel said: “While it is unlikely that consumers will forgo staples like bread and eggs due to rising prices, the implication may affect the breakfast foods market through a change in consumer shopping patterns.

“Consumers may seek out lower prices at mass merchants and club stores and/or trade down to private label products.”

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