Breakfast cereal in China: Snap, crackle… and flop

03-Oct-2012 - Last updated on 04-Oct-2012 at 15:00 GMT

Food companies: Listen up, or you'll miss a slice of the pie...

Western breakfast brands don’t often work in China. They need manipulating to appeal to very different tastes, packaging and format preferences and, of course, another language.

While it’s all very well wanting a taste of the pie, multi-million dollar food companies have fast realized that even a slice is difficult to get. But there are a few companies who are getting it right.

Tasty snack success

Some snack companies have had success with R&D moves. Pringles has a dedicated flavor range that includes seaweed and Hong Kong fish ball, Lay’s offers up hot & sour fish soup and cucumber and Oreo has launched individual cookie packs for the curious Chinese consumer.

Amid all of this, it’s worth noting that the top 10 snack-food sellers in China are predominantly domestic. PepsiCo does rank fifth, but at the top is a Taiwan-based firm Want Want China Holdings, according to Euromonitor data.

The sinking cereal

Kellogg is one company on the path towards the land of promise. The US firm struck a joint venture last week with Chinese agribusiness Wilmar International to push its cereal and snack presence in the country. Most analysts think snacks should be the Kellogg focus and bets are off on successfully pushing Cornflakes, Rice Krispies and other Western favorites onto Chinese breakfast tables.

James Roy, senior analyst at China Market Research (CMR), once told me that breakfast in China is a local affair. Chinese consumers have “very entrenched views and habits” when it comes to the morning meal, he said, with a clear preference for hot meals like eggs and rice-based specialties.

Granted, the country’s breakfast cereal market is estimated to be worth a tasty $198.4m (Euromonitor data), and food companies have identified population growth forecasts as a strong driver in their move to China, particularly the growth of the middle classes who can afford Western price tags.

But in the same way a salt & vinegar pack of potato chips will turn some noses in the wrong direction, a bowl of Crunchy Nut is unlikely to create queues in a Chinese food store.

The signs of what could work are all there though. The appeal of hot breakfasts and a familiarity with rice screams porridge to me. Similar to a traditional rice-based favorite ‘congee’, porridge or oatmeal would be clear leaders in the race to the Chinese breakfast table.

The concept of a bowl of cereal drowned in cold milk just doesn’t match entrenched traditions of warm, soft rice-based options does it? Rice Krispies, I hear you say? Perhaps, but I’m not betting on it. And I’m not alone.

“It [cereal] is not a format anywhere near their diet – consumers are still very traditional,” saysSam Mulligan, director of Data Driven Marketing Asia (DDMA).

Heng Hong, senior research analyst at Mintel also says: “In the morning, people want a sure bet and something that they know that they will enjoy. It is the one time, where consumers are more likely to order on autopilot and based on routine.”

Changing autopilot settings, dangerous?

Hong raises a valuable point here – that Chinese consumers, within their own four walls, have less ‘want’ to change habits.

Even if Chinese consumers are buying into Western products outside of the home, perhaps within the confines of one’s own home, there is a want, or need, to stick to what you know and love. And why should any multi-billion dollar Western brand suggest any different?

Food companies looking to take on China’s breakfast cereal market need to pay attention to what consumers are eating. In the same way snacks companies have catered to taste profiles, cereal companies need to cater to local habits and formats – and that is not a cold bowl of crunchy cereal.

Kacey Culliney is a reporter for BakeryandSnacks.com and previously worked on FoodNavigator-Asia.