As Cereal Habits Change, Food Manufacturers Adapt

MINNEAPOLIS (WCCO) -- Cereal revenue has plateaued in the past five years, according to industry analysts, and the way people eat it is changing.

The breakfast food staple is still in nine of 10 households, but that number still isn't as high as pre-recession sales. Many companies, including Golden Valley-based General Mills, have spent the time since trying to adjust to new consumer habits by offering more choices than ever before.

"Not all consumers want the same thing," General Mills cereal marketing and business director Scott Baldwin said. "And even the same people don't want the same thing all the time. We're complex people. We like different things at different moments of our lives, so we try to make products and brands that meet all those different needs."

Manufacturers are picking their battles. The breakfast industry has, in general, become much more diverse, offering healthier, portable options such as Greek yogurt or protein bars.

That, coupled with the on-the-go lifestyle trend, leads experts to believe that cereal is no longer a strictly breakfast food item. A growing number of people are treating it like a snack or a dessert.

Not every trend works with every product.

General Mills recently tried rebranding its Trix, getting rid of artificial flavors and instead opting for real sugar and color. The company got an unexpected reaction. Sales didn't necessarily suffer, but the customers who were upset made it very clear that they aren't eating Trix to be healthy.

Less than two years later, General Mills switched back to its popular, original, artificial bits of cereal and instead of reinventing a brand that's already established, they're adding new boxes to the market that cater to the changes they think will stay.

"You see people looking for ways to add key ingredients ... whether it's whole grains or protein," Baldwin said. "That's something that's going to stick around and stay. And we also see there's a desire for really just fun foods to make special occasions a little more special."

That's where the boxes of Lucky Charms, Cap'n Crunch and Froot Loops come into play. Baldwin says the company recognizes that a growing number of people are expanding their cereal consumption beyond the breakfast table, helping keep the sugary, nostalgic boxes a little more relevant.