Jack Skelly, food analyst at the firm, said while sales of traditional breakfast cereals were undeniably in the doldrums, drinkable alternatives were “over-hyped”.
“It is easy to overstate the importance of these liquid breakfast options. I don’t think people are really convinced that they are a substitute for breakfast, and they usually buy a snack such as a Belvita breakfast bar at the same time,” he told BakeryandSnacks.com.
The most successful breakfast drink at the moment, he said, was Weetabix On the Go which was launched in 2014 and only held a 3% market share of the dairy flavored drinks market.
Breakfast bars strong
Skelly said growth in the breakfast category was coming from snack bar alternatives and these cereal bars would continue to drive future growth.
“The millennium consumer tends to snack all the time and sales of breakfast cereal bars to eat on-the-move are growing strongly. Belvita is dominating the market in the UK and in America. Belvita appeals to all audiences and is promoted as healthy. I expect to see a lot more snacking products come to the market with associations with breakfast,” he said.
Mondelez’s Belvita brand, he said, was on track for £80m ($126.2m) annual UK sales in 2015. Its global sales hit $810m last year, growing by more than 500% since 2009.
Skelly said a number of new brands, such as Eat Natural and 9bar, had already been launched to exploit the relatively untapped opportunity offered by the breakfast on-the-go trend.
Traditional cereals dip
Meanwhile, traditional cereals remained in a difficult situation, Skelly said, with volume sales flat and value sales in decline.
“The discounters are putting unit prices under pressure; it is a big problem for cereal manufacturers. Their non-branded cereals are half the price of branded options and it is driving value down. Snack bars are maintaining their higher unit prices,” he said.
Over the last five years, he said that there had been “no important growth” in breakfast cereals anywhere in Western Europe. Sales were up only 11% in total over the five years, or just 2% yearly.
The German market was in decline, as was the Italian market, and sales in France were seeing only 1% annual growth.
The UK was one of the better-performing markets for breakfast cereals, he said, although volumes remained flat.
Skelly said even porridge pots – a cereal format that had shown potential – were now peaking.
“Our data suggests that porridge pots were doing well, but they are now taking a bit of a hit and seeing a slowdown in growth.”