Cereal Partners expand despite falling market

The UK division of Cereal Partners Worldwide which produces Nestlé cereal brands such as Shreddies, Cheerios and Fitnesse has announced plans for expansion in the face of market downturn.

Cereal Partners UK, which owns a quarter of the £1bn (€1.47bn) UK cereal market, will create 50 more jobs at the site in England.

The extension of operating facilities at the plant combined with the creation of a new distribution centre reflect the group's surprising growth in the face of a general downturn in the UK breakfast cereal market - a slump which could be attributed to changing eating habits and rising health concerns following negative publicity focusing on the levels of salt and sugar in ready-to-eat cereals.

Now the plant will produce only wheat-based cereals such as Shreddies and Shredded Wheat from next year and previously produced lines such as Frosted and Cocoa Shreddies will be transferred to other facilities.

The company declined to comment on the cost of investment at the new facilities but local press reports suggest that as much as £40m (€58.8m) has been spent on improving the site.

Cereal Partners Worldwide (CPW) is a collaboration between US-based food producer General Mills and Nestlé SA.

According to CWP, it is second in the global cereal industry with over a quarter of the market share, and has an annual turnover of around $1.75bn (€1.36bn).

Statistics given by Cereal Partners UK show that 61 per cent of breakfasts in Britain include ready to eat cereals and, on average, each person in the UK consumes 6kg of cereal per year in comparison to 3kg in Denmark, 2kg in Belgium and only 1kg in the Netherlands.

In a survey of the UK's biggest brands carried out by market researchers TNS Worldpanel last month, Nestlé cereals were rated as the fourteenth highest brand in Britain with sales in the last year between £245m (€359.96m) and £250m (€367.3m)

Nestlé breakfast cereals sector currently accounts for 40 per cent of the company's overall sales.