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
Aug 5, 2013 1:51PM
I think cereal sales are declining because the prices are just TOO high. Families just cannot afford to pay $4.00 + for a box of cereal.  Especially when the boxes also contain less and are smaller!!
Aug 5, 2013 1:27PM
I don't buy nearly as much cereal as I used to. Smaller boxes, higher prices, and lower wages since 2008. Most of the money I used to spend on grocery extras and things like movies and restaurants now goes to increased taxes and gas .
Aug 5, 2013 1:37PM
Health, excitement, fun, and what ever else has nothing to do with why people stop buying that crap. It has everything to do with how much you are getting to how much you are paying for it. They put that stuff in these big boxes and fill them half way up. Then charge 5$ a box for it. People have just wised up to this and stopped throwing away money none of us have. Every extra penny goes in the tank now!
Aug 5, 2013 2:11PM
Costs are higher, boxes are smaller.  Enough said.

Aug 5, 2013 1:35PM

 I try to eat healthy cereals...but for the life of  me, I can't see why regular, plain corn flakes should cost more as much as they do!  Cereal should be half what it costs...no to mention the hyper inflated costs of a gallon of milk anymore.


Sorta sad that the dollar menu at the drive thru is not that much more than a bowl of cereal!


Actually...it's just sad what all the 'good for you' food costs anymore!


Aug 5, 2013 2:01PM
I don't buy as much cereal because they are getting way to expensive
Aug 5, 2013 1:42PM
Cereal is just too expensive, especially when compared to it's true nutritive value, and high sugar content.  You're paying for the marketing.  What happened to a nice breakfast of an egg, whole wheat toast, serving of fruit, and a beverage?  On mornings that I don't want to eat an egg, a nice chicken sandwich (real chicken, not deli "meat") on whole wheat is extremely satisfying, healthy, and keeps me happy until lunch time.  Natural peanut butter is another good breakfast option, for those who don't have allergies. If you are truly a cereal eater, you can buy steel cut oats in bulk.  They are very healthy, but do require some extra cooking time.
Aug 5, 2013 1:58PM
I walk right past the cereal section any more.  $4.25 for a box with twelve ounces of cereal.  At some point folks will have to figure out calories are becoming more and more valuable and shopping for a good value does not include $4.25 or 35 cents per ounce for cereal.  Packaging, transportation, advertising, are all beginning to make cereal look over the top. I make a good living and when I start price comparing believe me many many others see the same thing.
Aug 5, 2013 2:10PM
Simple... We don't buy because the boxes are smaller (less content)  cost over $4 a box! then you have to buy $4+ a gallon milk to go with it... EXPENSIVE... just like I cut cable and expensive cell phone plans...  gotta go.. gotta go...  I don't make enough dough!!
Aug 5, 2013 1:29PM
maybe people are tired of eating pure sugar?  Frosted flakes, capt crunch, cocco puffs, etc. about as healthy as a candy cane.
Aug 5, 2013 1:55PM
Maybe Americans have realized that these breakfast cereals are made from genetically modified grains and are now questioning the safety of such foods.  Maybe.
Aug 5, 2013 1:54PM
Cause YOU GET What you deserve when you use Roundup and excessive PESTICIDES And GMO corn . Stop the Monsanto dangerous modified foods. Only God can make what we need, not humans. Humans screw up everything they touch. YOU can't improve on it or fix it. But you CAN STOP meddling in everything. Can't you get it? Stop it.
Aug 5, 2013 12:42PM

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


Does food need to be exciting before people will eat it, or is it just too hard for them to sit still for the 10 minutes it takes to eat a bowl of cereal ? 

Jesus, Joseph and Mary, this country is getting more brain dead every day. The photo of mom with the little one says it all. You don't let a little kid pick out what kind of sugar laden crap they want to eat. You pick out 3 or 4 healthy brands and give them a choice. On another note, only an idiot takes a child that age to the grocery store. 

Before you bitch about the cost of a box of cereal, think about what you are paying for your "sack o crap" breakfast from Mickey D's.

Aug 5, 2013 1:58PM

It is not just sugar or gluten content. A lot has to do with the  "engineered grains"  they use.

It is just not cereal, investigate bread and other wheat and oat products. I was a big cereal fan, was being the optimum word. 

Aug 5, 2013 2:16PM
Cereals just got so expensive; thus I think the fall off in sales.  Years ago they were considered the food of the poor...but that's no longer true.  I guess, you could conclude, cereal makers just shot themselves in the food with price gouging, plus they failed to see the need to reduce the sugar content.
Aug 5, 2013 2:20PM
I agree!!  Too expensive and lot of sugar content. The ones that are to suppose to be better for you are over $5.00.
Aug 5, 2013 2:03PM
Could it also be that the price of milk is ASTRONOMICAL?!
Aug 5, 2013 2:02PM
This is not about health but simple economics. Cereal and milk cost too much and people can't afford it. Why is a box of cereal $4-$5? And we all know milk it ridiculously high. You can buy 10+ yogurts for the cost of cereal and milk. But yogurt isn't that healthy either especially with companies using cochineal bugs in your food, which is considered a "natural" substance so can be used in "Natural" products. Personally I prefer the sugar to bugs, but to each his own. If you think m****duced food is healthy in any sense, you are sadly mistaken. The US uses several products that have been banned in other countries! This is what happens when you give up your rights and let big business (major corporations and the US government) run your life. So for the health nuts, unless you are growing it yourself, feeding it yourself, etc., look at those ingredients - they may not be as healthy as you think.
Aug 5, 2013 1:58PM
John Doe 2 is right on. It is important that parents do just that, parent. It is really simple. "This is what is for breakfast." In some ways how a parent deals with breakfast is a good example of how they are going to deal with more critical issues. Take a moment and explain that this food is healthy and this is what you have to eat for breakfast. Don't cave just because a child says " I don't want that." You can offer a substitute next time you buy groceries but limit the options. Come on folks stand up and be a parent. You are doing your children a disservice to do anything less.
Aug 5, 2013 2:12PM

It might have something to do with consumers noticing that they aren't eating food anymore but something that is a food alternative. Then you look at the price of the products that are made out of real food then you notice that hey it's cheaper to go to mcdonalds and eat some more fake food on the go. The biggest factor has to be the fact that people can't get up early anymore because we go to bed so late and get up so late that we have a routine of chaos in the morning. Hit the alarm a few times then jump out of bed in a panic as you notice that you have 15 minutes before you have to leave or you'll be late for work, hit the shower, dry off, brush your teeth, shave, apply deodorant, get dressed then fix your hair and out the front door you go. Really who gets up early enough now to actually sit down for less than 30 minutes each morning to just "relax" and wake up fully before getting the day under way while you eat breakfast? We don't program ourselves like that anymore. We are programmed to be on the go now.

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