The formula “cereal” for American breakfast is shaking. This is due to growing concerns about various additives included in cereal and the change in eating habits centered on Generation Z, which is spreading the trend of finding simple and healthy alternatives such as yogurt and shakes. As a result, cereal sales continue to decline, affecting the industry as a whole. Recently, the U.S. business magazine Fortune said in an article titled “How Generation Z brought down cereal during the COVID-19 pandemic,” “Many office workers stayed at home and enjoyed breakfast with cereal and milk. Excluding this short period, cereal sales have steadily declined over the past 25 years.”
Sales figures also show this trend. According to market research firm NielsenIQ, Americans purchased about 2.5 billion cereal products in the year from the beginning of July 2020 to the beginning of July 2021, but only 2.1 billion were reduced by more than 13% during the same period this year. Several factors have contributed to the decline in cereal popularity. First of all, as simple and easy-to-carry breakfast alternatives like energy bars that appeared in the early 1990s became popular, more and more consumers tried to solve their meals quickly and easily. In addition to this, interest in cereals has gradually faded, adding to health concerns about high sugar content and artificial additives.
Tom Reese, manager of Euromonitor Global Food Insights, said, “Cereal is hard to get out of the image of processed food. Consumer perception is limited in that it is not a food material obtained from nature, but an artificially made food.” He added, “Cereal manufacturers have tried to build a healthy image by adding vitamins and minerals for decades, but consumers trust a simple ingredient list more.” Changes in eating habits, centered on the younger generation, are also considered a major cause of the cereal market downturn. They prefer healthy and convenient foods such as yogurt and shakes, and they tend to value “health-conscious choices” in their diet as a whole. Kenton Barrello, vice president of market research firm YouGov, explained, “Generation Z, who was born between 1997 and 2007, has a higher rate of eating vegetables for breakfast than other generations.”
Generation Z also often replaces their breakfast with convenience food or skips breakfast depending on circumstances. Instead, they consume cereal at different times, such as snacks and late-night snacks. “Generation Z no longer considers cereal to be part of their breakfast,” Fortune said. “They tend to consume cereal as a snack at 2 p.m. or as a snack late at night.” “They have no memory of eating cereal with cartoons on Saturday morning, so they are not attached to the perfume marketing that cereal brands have put in front of them,” he said.
Such consumption changes have led to a restructuring of cereal companies. The 100-year-old U.S.-based Kellogg Group has split its snack business into two companies, cereal maker WK Kellogg and snack maker Kellanova. However, WK Kellogg has not been performing as expected since the launch. WK Kellogg’s net debt is reportedly $569 million as of March this year.
SALLY LEE
US ASIA JOURNAL
