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Breakfast is Booming

Eating on the go continues to be one of the leading trends targeted by the food and drinks industry as formal meal patterns and increasingly busy lifestyles have brought about something of a revolution in the format and content of our diets. Nearly all meal and snack occasions can now be turned into ‘on the move’ eating options and an increasing range of formats across the market are now targeting this type of consumption.

One of the meal occasions where this trend is clearly apparent is breakfast, which has seen ongoing initiatives to adapt to changing consumer lifestyles, initially led largely by breakfast cereal companies looking for new opportunities in a relatively static market, but more recently joined by a raft of other suppliers seeking new usage occasions for a whole range of products.
The breakfast cereals market is now very large, with a value of over USD20bn globally, but it is relatively mature and highly competitive in its most established countries, including the US, the UK and Australia. It is increasingly facing competition from other products targeted at the breakfast occasion, both established and new and its responses have included new formats and packs more suitable for on-the-go consumption.
 
Initially, packaging initiatives tended to focus on providing more convenient formats, particularly single-serve lines with greater portability. This included more lines in single-serve boxes and sachets, sold either singly in impulse or catering outlets, or in multipacks through supermarkets, etc.  These could be easily transported for consumption in convenient locations, such as workplaces.

Options in single-serve pots or bowls with spoons and portions of milk have also been quite widely trialled, but other than for hot cereals, such as porridge, seem to have remained largely the preserve of the foodservice sector, although there have also been some products sold through impulse outlets.  This may be set to change with Kellogg’s reintroduction of its Kellogg’s to Go range in the UK in September 2014, making five of its leading brands available in portable pots to target the so-called ‘missed breakfasts’ market, which the Company values at GBP1.9bn a year.  Kellogg’s trialled the concept back in 2008, but perhaps the market is now ready for it in the wake of the success of to-go formats in the hot cereals market. 
Another development at about the same time was the revamp of the Rumblers portable breakfast brand in the UK under the Nomadic name. It had been on the market since the late 1990s, taking various formats and positionings before its latest incarnation with oat clusters and yoghurt in Strawberry, Chocolate and Raspberry variants. Over in the US, the move from hot to cold is also reflected in Quaker’s Real Medley’s hot oat cereal pots are being extended with Granola & Yogurt blends, designed to be made up with the addition of cold rather than hot  milk.

Porridge and other hot oat cereals have been more successful in individual pot formats to date.  These include instant products that just need the addition of milk or water prior to heating and microwaving, as well as some more premium ready-to-heat products sold through chill cabinets.  The US and the UK have again led activity in this area, reflecting the high level of consumption of breakfast cereals in general, and hot oat cereals in particular.

Recent activity in the US has included Quaker Instant Oatmeal 50% Less Sugar, made with stevia and General Mills’ Nature Valley Protein Oatmeal range, featuring a portion of granola topping in a lidded compartment, as well as 10-g of protein per serving. In the UK, recent launches have included gluten- and dairy-free options from Delicious Alchemy with its instant porridge products. 

Breakfast cereal companies have also played a significant role in driving the cereal/snack bar market forward, using their own existing ingredients, recipes and brands, recognising the potential for on-the-go breakfast replacements, as well as anytime meal replacements and snacks.  The number of global cereal bar launches recorded by Innova Market Insights has nearly doubled over a 5-year period and continues to show double-digit growth, reflecting this rising demand for convenient nutritious snacks and meal replacements, with the growing variety of formats, ingredients and target markets available. 
The market is relatively well established in most countries, particularly its original home of the US, where it is worth approaching USD5bn a year and is segmented into a number of sub-categories, including breakfast alternatives, granola or muesli bars and nutrition and performance bars.  Nutrition bars lead in terms of value and are seeing the best growth rates, but there is considerable overlap between the different sub-categories, resulting in a wide range of products used as convenient breakfast options.
The breakfast bar category is led by the major cereal companies, led by Kellogg and General Mills, with Kellogg’s range featuring cereal brands such as Rice Krispies and Special K, as well as its Nutri-Grain specialist breakfast bar. Most of Quaker’s range features in the granola bars sub-sector, however, as does General Mills’ Nature Valley portfolio.

The cereal bars market is also relatively well-developed in the UK, with sales worth over GBP300m a year.  There has been more recent evidence of falling sales in the category, particularly affecting breakfast bars as the breakfast biscuits sector has taken off in such a big way. Kellogg’s still leads the cereal bars market, however, with its Rice Krispies, Special K and Nutri-Grain brands.
The rise of breakfast biscuits in recent years has been one of the key trends not only in the breakfast sector, but in the biscuits category and even in the food and drinks market as a whole.  Biscuit consumption at breakfast time is relatively commonplace in some parts of the world, most notably European markets such as France, Spain and Italy.  It has only relatively recently become an area of much interest in other countries, including major biscuit markets such as the US, the UK and Germany, where cereal bars were previously really the closest alternative to be marketed as on-the-go breakfast options.  As a result of the initial success of breakfast biscuits in new markets, more traditional markets are also tending to be revitalised and see increased levels of activity and interest.

The rebirth of the breakfast biscuits market started in the UK with the launch of the Belvita brand from Mondelez in 2010, featuring wholegrain biscuits positioned specifically for the breakfast market. Sales have reached over GBP76m a year, although there are now signs that the market has started to mature, with falling sales from some brands in 2014. Sales of Belvita reached over GBP67m a year by September 2015, making it the number five biscuit brand in the UK overall, as well as leader in the healthy biscuits sub-category.  Most recently, in August 2015, the brand was extended further with a Soft Bakes range, already available in the US. This followed the addition of a Crunchy Hazelnut variant to the original range in May 2015 and the late 2014 introduction of Belvita Tops with chocolate or fruit-flavored toppings. 

The success of Belvita spawned a raft of competitive activity, including from cereals companies, such as Kellogg, Weetabix and Quaker, biscuits market leader McVitie’s (UB) and Premier Foods’ Hovis bread brand, as well as retailer own-labels. Recent activity has included the relaunch of United Biscuits’s Breakfast biscuits range with new Oaty Breaks variants and two Fruit & Oat Bakes option.

Germany, another market where biscuits are not traditionally a breakfast option, also saw the arrival of Belvita with the introduction of Belvita Frühstückskeks in three variants in April 2012, since extended with further variants and joined by competition from companies such as Brandt with its Frühstückszwieback. .

Meanwhile, in established European breakfast biscuits markets, there were signs of renewed interest.  The Belvita name was first introduced in France in 2009 as a healthy biscuit line, replacing the Taillefine healthy biscuit brand, licensed by Kraft from Danone for a limited period. With its success elsewhere in Europe, the Belvita name was moved into the breakfast biscuit market permanently when Lu Petit Dejeuner was renamed Lu Belvita Petit Dejeuner in 2012.
Belvita was also launched in the US under the market-leading Nabisco biscuits umbrella in early 2012, where it also had to pioneer a new sweet biscuits sector in the breakfast foods market or a new breakfast option in the cookies market, depending on how you look at it.  The range also includes a Belvita Soft Baked range to cater for the traditional US love of soft cookies.   Most recently, in early 2015, a Belvita Bites range of mini snack biscuits was also introduced.  Competition in the market includes Kelloggs To Go Morning Breakfast Biscuits, as well as ranges from cereal bars brand Nature Valley (General Mills) and cereal company Post with the Honey Bunches of Oats name Belvita is now available in 54 countries worldwide, generating income of over USD650m for Mondelez, up about 35% per annum since 2011.   Most recently, in October 2015, it was announced that the brand was to be launched in China.

Another area of growing interest in the on-the-go breakfast category is that of breakfast drinks, led by dairy-based lines with cereals and, more recently, protein beverages. 

Liquid breakfasts have been on the market for a number of years, with products featuring ingredients such as cereals, milk or yoghurt, juices, and fruit, but have been relatively slow to take off in many instances.  Australia was one of the few countries seeing some success in this area, and even there the market was largely confined to one product, Sanitarium’s Up & Go, launched back in 1998 and now worth nearly GBP80m a year. It is reported to account for 40% of all Australian breakfasts eaten on the move and to have overtaken Weet-Bix as the best-selling product in the breakfast category.  The range was extended in late 2014 with three Oats2Go variants, claimed to be the only oat-based liquid breakfasts on the Australian market.  This was followed in the spring of 2015 with two Reduced Sugar variants in the Up & Go portfolio, launched in Choc Ice and Vanilla flavors. 
The Up & Go brand was also launched onto the UK market in early 2015, reflecting rising interest in the liquid breakfasts category. Other activity in the UK has included the launch of Smooth Oatie Shakes from Moma Foods, also in January 2015, and the extension of the Weetabix on the Go breakfast drinks brand with a Protein option and the Fuel 10K liquid breakfast range with a banana option, both in June.

In the US, Kellogg’s competes in the liquid breakfast market with its Kellogg’s To Go breakfast shakes range, which has been on the market since 2013 and competes with an increasing range of breakfast options, particularly protein drinks, which may or may not have a specific breakfast positioning. Introductions in this area include Morning Protein Smoothies from Sprout Foods, Plus Protein Dairy Beverage from retailer Safeway and TruMoo Protein Milks from Dean Foods.  A more unusual introduction is Chimp Food, launched in early 2015, described as ‘liquid food in a bottle for breakfast, lunch and dinner’ and featuring ingredients traditional found in a chimp’s diet (fruit, vegetables, nuts and seeds). 

Back across the Atlantic, in Continental Europe, breakfast drink launches have focused more on the traditional flavored milks arena, including Lactel Milk’n’Go from Lactalis in France, featuring milk with fruit puree and cereals, and Breakfast Cacao-lat Upp! From Cacaolat in Spain, offering a more nutritive drink than its traditional chocolate milks, featuring cereals in the form of rice and corn, calcium and vitamins.

Nutritionists frequently refer to breakfast as the most important meal of the day, citing studies that find that people who skip breakfast are disproportionately likely to have problems with concentration, metabolism and weight.  Even so, there are large numbers of people who still skip breakfast on a regular or occasional basis, most often citing lack of time or lack of appetite.   This perceived lack of time has been crucial in the rising demand for breakfast ‘on-the-go’ options and has helped to drive the further development of the market

Lu Ann Williams, Innova Market Insights