The global breakfast cereals market is consolidated with the top three players – Kellogg’s, General Mills, and CP – accounting for 50% of the market in 2012. The threat of substitutes is extremely high for existing companies from breakfast options such as fruits, toast, and eggs. There exists low product differentiation and a negligible switching cost, increasing the intensity of rivalry among players. The threat of new entrants will likely be low as existing players have a strong foothold and global presence, states Transparency Market Research in its new study. As such, new players will find developing a unique brand image a challenge when entering the market. Supermarkets, hypermarkets, and other retail stores are key buyers of breakfast cereals and the bargaining power is low to medium, varying from region to region.
According to the report, the global breakfast cereals market is expected to rise from US$36.7 bn in 2015 to US$43.2 bn in 2019. On the basis of product, the ready to eat (RTE) cereals segment is anticipated to lead and will be worth US$35.39 bn by 2019. By geography, North America will continue to retain its leading position and account for 33% of the market by 2019. The U.S. is the key market for breakfast cereals in North America and is expected to be worth US$9.50 bn by 2019.
Growing Number of Convenience Stores to Aid Growth of Breakfast Cereals Market
The growing number of convenience stores is one of the key contributors boosting the sales of breakfast cereals as people prefer shopping for household utilities and foodstuff under one roof. In addition to this, convenience stores provide more visibility to food brands. The breakfast cereals market is also benefitting from the high demand from emerging economies in Asia Pacific. As consumers in these countries are switching from traditional breakfast items to wholesome breakfasts owing to increasing health consciousness, the breakfast cereals market is expected to grow tremendously.
Opting for Traditional and Snack Breakfasts to Remain a Hurdle for Market
Palm oil, which is essential for the production of breakfast cereals is specific only to a few limited areas as its plantation requires a particular type of climate. Around 90% of palm oil plantations are found in countries such as Malaysia and Indonesia. This is creating a problem in the procurement of palm oil and becoming a hurdle for the global breakfast cereals market. “Another factor hampering the growth of the market is the busy lifestyles of people compelling them to opt for snack breakfasts to save time,” states a TMR analyst. In addition to this, most countries have their own traditional breakfasts. For instance, congee is the traditional breakfast item in China, whereas bread and other flour-based foods are preferred in India. These alternatives remain a hurdle for the breakfast cereals industry.
New Taste and Flavors in Breakfast Cereals to Create Opportunities in Breakfast Cereals Market
Most manufacturers of breakfast cereals are targeting children and the younger population base to help drive sales. Other age groups offer growth opportunities to players operating in the global breakfast cereals market. In addition to this, products with new tastes and flavors will widen the scope of the market. Companies such as Kellogg’s have targeted the growing number of women consumers in Asia and thus, launched a Special K range of cereals.
This information is based on the findings of a report published by Transparency Market Research, titled “Breakfast Cereals Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019.”
The global breakfast cereals market is segmented as follows:
- Hot Cereals
- Ready to Eat Cereals
- North America
- Asia Pacific
- Rest of the World
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