Magazine article Marketing

All-Day Breakfast

Magazine article Marketing

All-Day Breakfast

Article excerpt

Consumers have changed their perception of cereal bars from a breakfast alternative to healthier snack option.

Cereal bars have proved a lucrative market extension for breakfast cereal manufacturers as they tap into the snacking tendencies of UK consumers.

As the market has grown, new entrants have joined in, recognising that these bars are in step with trends such as eating on the go, healthier diets and increasing fibre intake.

By the end of last year the market was estimated to be worth pounds 324m, up 41% since 2004, according to Mintel.

Cereal bars are classed as baked cereal-based bars, usually made with oats and typically either crunchy or chewy. Added ingredients range from fruit to chocolate. The bars defined as everyday and healthy account for almost three-quarters of sales.

The recession has put pressure on this category as it is a discretionary spend that is easily curbed. As with many food sectors, rising commodity prices have also put pressure on brands to try to balance the increasing cost of raw materials with the retailers' desire to keep food prices down.

This is particularly unfortunate for cereal bars, as they already suffer from a poor value for money perception among shoppers, according to TGI; only one in six people sees them as offering value for money.

Cereal bars were initially introduced as an alternative option for those with no time to sit down to a bowl of cereal and milk. While they still meet this need for many, they are now most likely to be eaten as a snack. So their main competition comes from other healthy snacks such as fruit, as well as more indulgent ones, like crisps.

One in three adults (35%) eats cereal or snack bars, according to Mintel, so there is still considerable room to grow this market if brands can find the right positioning for their products.

Cereal bars suffer from not being clearly defined; while some consumers don't consider them tasty, others don't consider them healthy. Their image has been hit by media coverage focusing on the high sugar and fat content of many bars. Some brands have countered this criticism by creating products that are credible healthier options.

Making full use of its breakfast cereal credentials, Kellogg brands account for about a third of the market, with United Biscuits close behind. These two companies hold about 50% of the market between them. The market is otherwise highly fragmented, with no other brand taking much more than 5% share and own-label growing slightly to take 21%.

Kellogg is present in every cereal-bar category, with Special K in diet, Rice Krispies Squares in children's and Nutri-Grain in everyday. Special K bars have performed well, helped by the strength of the brand and the advertising support for the umbrella cereal brand, positioning it as a weight-management programme.

At the start of the year Kellogg updated Nutri-Grain to more clearly define Nutri-Grain Morning Bars as an on-the-go breakfast replacement while Elevenses is promoted as a snack option.

Eat Natural is one of the few premium-placed cereal bars and its sales have grown. As well as its core range it has Lunchies, a nut-free bar for kids.

The over-55s - one of the demographics expected to grow the most in the coming five years - is not a big spender in the category. However, the number of ABs is also on the rise, and this more affluent segment places an emphasis on health and naturalness when it comes to their food purchases, which should benefit cereal bars. …

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