“The breakfast goods business is … a lucrative industry in America with an estimated net worth of $7.7 billion in 2014,” but the portion of this going to cold cereal fell 3% from 2001 to 2010, according to research published by Companies & Markets in October.
“To revive the industry … ‘hot’ cereal products have stepped up to fill the gaps in the market,” and meet consumers’ evolving demand for reduced sugar, increased fiber, higher protein amounts and gluten-free options, the report adds.
It explains that consumers turned away from cold cereals in part because they often include high levels of sugar, and because parents want to serve healthier breakfasts to their children to help fight the obesity epidemic. In addition, nearly 3 million Americans now have gluten intolerance and are turning their backs to cold cereals that do not meet their dietary restrictions.
Many hot cereals, including oats, on the other hand, are naturally gluten free and can be marketed as such if cross-contamination is avoided.
Likewise, “with ingredients such as oatmeal and whole nuts intrinsic to ‘hot’ cereals being perceived as healthy alternatives by consumers,” manufactures hope “an increase in consumption of ‘hot’ cereal sales may revive the industry,” according to the report.
Research firm Packaged Facts adds that companies looking to enter the hot cereal category have a strong foundation on which to build. It notes in recent research that 60% of Americans eat hot cereal and that two out of five do so daily or a few times a week.
In addition, it predicts retail sales of hot breakfast cereal will grow from $1.4 billion in 2013 to $1.6 billion in 2018, for cumulative growth of 14.7%. This is on top of an 8.5% increase in hot cereal retail sales from 2008 to 2013, according to the Packaged Facts report.
More protein, fiber and nutrition
Among those manufacturers looking for growth through oatmeal, is the protein bar manufacturer thinkThin, which jumped into the hot cereal category in January with the launch of high-protein, high-fiber, low-calorie oatmeal in single-serve bowls and multi-pack boxes.
Noting that hot cereal is a $1.3 billion category and is growing 12% in the natural channel, thinkThin senior brand manager Andrew Thomas said, “Oatmeal is a fairly natural fit for us,” as it is another easy way to provide protein and fiber to women.
He said that thinkThin’s oatmeal also is “tied for first” for having the most protein at 10 grams per serving. It also has 5 grams of fiber, thanks to chicory root fiber and fiber from nuts added to already high-fiber oats. This provides a high level of satiety even though each serving has less than 200 calories.
Eating a serving of the oatmeal helps “you feel full, but you don’t feel disgusting,” he said noting the satiety benefits fiber and protein that can keep calories low.
Oatmeal has a cleaner label than many cold cereals
Oatmeal also was a good fit for thinkThin “because you can make it taste really, really good and you can add a lot of benefits, but you don’t have to have a lot of things in the ingredients lists,” so it is easy to maintain a natural, clean label that appeals to consumers, Thomas said.
With this in mind, he noted thinkThin’s line of oatmeal comes in four flavors: Farmer’s Market Berry Crumble, which Thomas says smells just like blueberry pie when it is heated; Madagascar Vanilla, Almonds, Pecans; Honey Peanut Butter; and Original Sprouted Grains.
Upping the ante
Dr. McDougall’s Right Foods’ new line of Organic SuperFood Hot cereal and Thick Cut Organic Old Fashioned Oatmeal products may not have as much protein as thinkThins, with 3 to 5 grams of protein, but it ups the nutritional value and fiber amount of its cereals with the addition of chia, milled flax, buckwheat, quinoa and pumpkin seeds.
By using milled, rather than whole flax, Dr. McDougall’s superfood cereals offer consumers between 680 mg to 1,200 mg of ALA omega-3s, said Carolyn Vinnicombe, brand manager for Dr. McDougall’s Right Foods. They also have 4 to 6 grams of fiber.
She also noted that while Dr. McDougall’s line of thick cut old fashioned oatmeal packets cook in about 1.5-2 minutes, it has a chewier texture that appeals to consumers than that of the rolled oats typically used in instant oatmeal.
Convenience remains key
McCann’s Irish Oatmeal also relies on the nutty taste and chewy texture of old fashioned oats to help its new line of Artisan Collection oatmeal appeal to consumers. But it combines them with “creamy” rolled oats to help speed the cooking time to just a few minutes, so that it can also meet hurried consumers’ need for convenience, a spokesman said.
He explained that even the ostensibly simple act of getting a bowl, milk, spoon and cold cereal can take too long or be too complicated for busy consumers. McCann’s Artisan line of oatmeal packets are easy to take on the go and require only hot water, he said, emphasizing it is easier to eat a desk than cold cereal.
He noted that the company is exploring new cup packaging, which would allow consumers to eat straight out of the container and forgo finding and washing a bowl.
ThinkThin’s and McDougall’s hot cereals already are offered in portable bowls, sales of which thinkThin says are growing at 140%. It also notes that packets, which are easy to keep in office desk drawers, are growing two times faster than loose filled or bulk packs.
Even above consumer demand for convenience though, is a desire for good taste, the spokesman for McCann’s said. He noted that the company hit this nail on the head with its Artisan line which includes Black Currant, Almond & Cream; Pumpkin Pecan with Vietnamese Cinnamon; Madagascar Vanilla Bean with Honey; and Apple, Cranberry & Walnut.