Food Market brings news, talk and insight into the food business, from farms to supermarkets to restaurants. Reporters Mike Hughlett and Tom Meersman delve into the work of Minnesota’s food companies and issues such as food safety and labeling.

Cereal bowl half empty?

Posted by: Mike Hughlett Updated: May 2, 2014 - 11:18 AM

There's more evidence this week that the U.S. cereal business isn't exactly snapping and crackling.

Michigan-based Kellogg Co., maker of Frosted Flakes, Mini-Wheats and Froot Loops, reported Thursday that first quarter sales for its breakfast division fell 5.5. percent, dragged down by cereal.

And the company says that despite a big upcoming marketing campaign, it expects the downward cereal trend to continue.

Kellogg and Golden Valley-based General Mills are the nation's two breakfast cereal behemoths, each with about a market share of about 30 percent. Mills has fared better than Kellogg in recent quarters, its U.S. cereal sales up 2 percent over the first nine months of its fiscal year.

But there's no denying that the cereal category has been historically weak over the past two to three years. Cereal simply faces more competition at breakfast time these days.

Greek yogurt has become a morning staple. With the growing consumer craze for more protein, the classic bacon-and-eggs combo is hot.

And fast-food restaurant chains are expanding their breakfast offerings, pressuring consumer packaged food makers like Kellogg and General Mills.

We'll find out General Mills' latest cereal sales results on June 25. That's when the company is scheduled to release its fourth quarter earnings.

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