Why cereal sales are getting soggy

Americans apparently have had their fill of the onetime breakfast staple, and Kellogg and other packaged-food companies are feeling the pinch.

By Aimee Picchi Aug 5, 2013 12:15PM

Girl grocery shopping with her mother © image100 , SuperStock Americans aren't going cuckoo for Cocoa Puffs these days. 

Breakfast cereal sales are declining as U.S. consumers increasingly shun carb-heavy morning meals in favor of breakfast bars and Greek yogurts such as Chobani. 

Kellogg (K), which produces Raisin Bran and other cereals, said last week that sales of "morning foods" slipped by 3.3% in the second quarter.

Rival General Mills (GIS) has also been hit by slumping demand, with cereal sales slipping about 2% in a 12-month period that ended in May, Businessweek reports. 

Part of the issue may be how marketers are now positioning breakfast. It's no longer enough to pour some flakes into a bowl and top them with a lashing of milk. Instead, packaged-food companies are telling us that breakfast is "an occasion," Businessweek notes. 

That may be backfiring for cereal makers. After all, if you're trying to make your first meal a little more special, a bowl of flakes probably won't compare with grabbing some 7-Eleven Breakfast Empanada Bites

Cereal makers' woes might extend beyond competing with more exciting breakfast foods, however.

Sugar content is increasingly an issue for parents. Harvard's School of Public Health reports that some cereals are more than 40% sugar. Kellogg's Honey Smacks and Post's (POST) Golden Crisp include as much sugar as a Hostess Twinkie, a 2011 report found.

But healthier cereals are also feeling the impact. Kellogg's Corn Flakes and Special K have been hit by changing habits. Consumers may be balking at paying more, given that some cereals now cost more than $5 per box

Together, the trends are pushing Americans to find more appetizing breakfasts elsewhere. 

Follow Aimee Picchi on Twitter at @aimeepicchi. 

More on moneyNOW

Tags: FoodGISK


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