Top launch: Coco Pops Porridge Kellogg’s
Hot cereals are, well, hot right now. While an RTE brand venturing into this territory isn’t unheard of, to do it successfully is. That’s exactly what Kellogg’s has done with Coco Pops. Having spotted a ‘big space’ in the market for a kids’ product, it rolled out chocolately porridge in the hope that your little monkeys will start demanding it. Kellogg’s says so far it’s added more than £1m to value, helping to mitigate the overall brand’s 2.1% decline on volumes up 3.1%.
Cereals, like corn flakes left to soak for too long, have gone soggy. And it’s not altogether surprising. As the discounters steal share, prices are being slashed; more and more of us are skipping breakfast or eating it on the go; and there’s also the protein trend and a more general pressure to replace sugary carbs.
But even if sales have slumped 4.7% on volumes down 2.0%, it’s an improvement on the year before, which saw 4.9% of value and 5.4% of volume sales wiped from the market. Of the top 10 brands, only Quaker and Shreddies have seen growth, and the latter’s was marginal at £0.4m. Quaker, on the other hand, added £5.5m to sales - more than twice the growth of any existing cereal brand.
Quaker has tapped the key trends of health and convenience, which has helped bring younger, more urban consumers into the cereal category, says senior marketing manager Duncan McKay. “Quaker Oat So Simple Pots have delivered 26% of total hot cereals growth in the last three years and 24% of UK adults buy breakfast on the go at least once a week, with shoppers picking up two to three items on average during each visit.”
Quaker has had to fight off stiff competition from the likes of Kellogg’s, which expanded Coco Pops and Crunchy Nut into porridge, and took All-Bran into muesli. None of this compares to Kellogg’s licensed NPD - its Frozen cereal has conjured up £3m since launch in April and it is hoping for big things from its Star Wars cereals.
Innovation in the form of Krave Roulette also proved successful, adding 4.1% to sales on volumes up 8.5%. But Krave is a rare exception in the Kellogg’s camp. Of its 14 existing brands in the top 50, Variety pack was the only other one to gain value (+17.5%) and the total combined loss came to £37.3m. Big guns Crunchy Nut and Special K were hit the hardest, losing £8.1m and £14.8m respectively.
Cereal Partners has also suffered. Its 11 cereals in the top 50 collectively lost 7.7% in value, though volumes only fell 1.1%. “The reduction in prices is the key reason for the decline, as volumes are fairly stable across the total business when including all channels,” says Andrew Pyne, external communications manager, Nestlé Cereal Partners UK.
Prices across the category fell, on average, 2.8% with only two of the top 10 increasing prices. “The traditional channel is being challenged by discounters; cereals being one of the first and strongest areas these stores began in. Their ranges are diverse and varied,” says Nielsen analyst Thomas Platford.
All is not lost in cereals, however. Brand owners remain optimistic, looking for new opportunities for growth in on-the-go, health and products such as Weetabix’s breakfast drink portfolio, which has doubled sales over the past year (see p123).
| TOP 20 Cereals | SALES | |||||
|---|---|---|---|---|---|---|
| £m | change (£m) | change () | ||||
| Total volume change: –2.0 | Total Category | 1,421.50 | –70.3 | –4.7 | ||
| Total Own Label | 303.1 | –16.5 | –5.2 | |||
| 1 | 1 | Weetabix | Weetabix | 138.9 | –2.4 | –1.7 |
| 2 | 2 | Quaker | Quaker Oats | 122.2 | 5.5 | 4.7 |
| 3 | 3 | Crunchy Nut | Kellogg’s | 78.5 | –8.1 | –9.4 |
| 4 | 4 | Special K | Kellogg’s | 68.5 | –14.8 | –17.8 |
| 5 | 6 | Coco Pops | Kellogg’s | 54.8 | –1.2 | –2.1 |
| 6 | 5 | Kellogg’s Corn Flakes | Kellogg’s | 52.8 | –5.0 | –8.6 |
| 7 | 8 | Shreddies | Cereal Partners | 50.5 | 0.4 | 0.9 |
| 8 | 7 | Cheerios | Cereal Partners | 48 | –4.3 | –8.2 |
| 9 | 9 | Rice Krispies | Kellogg’s | 40.5 | –3.3 | –7.5 |
| 10 | 10 | Shredded Wheat | Cereal Partners | 36 | –4.5 | –11.1 |
| 11 | 11 | All-Bran | Kellogg’s | 33.6 | –6.0 | –15.3 |
| 12 | 12 | Alpen | Weetabix | 33.4 | –2.3 | –6.3 |
| 13 | 14 | Dorset Cereals muesli | Dorset Cereals | 25.4 | –0.7 | –2.6 |
| 14 | 13 | Frosties | Kellogg’s | 23.5 | –3.1 | –11.5 |
| 15 | 17 | Jordans Crunchy | Jordans & Ryvita Co | 23.2 | 2.4 | 11.5 |
| 16 | 16 | Krave | Kelloggs | 21.8 | 0.9 | 4.1 |
| 17 | 15 | Jordans Country Crisp | Jordans & Ryvita Co | 21.1 | 0 | 0.1 |
| 18 | 18 | Fruit & Fibre | Kellogg’s | 18.5 | –1.4 | –7.2 |
| 19 | 19 | Variety | Kellogg’s | 17.5 | 2.6 | 17.5 |
| 20 | 20 | Scott’s | Quaker Oats | 13.9 | –0.4 | –2.9 |
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