The decline in sales of breakfast foods suggests that Tony the Tiger and Toucan Sam may need to consider new career options. According to a report from the Wall Street Journal, the leading players in the cereal industry—Kellog, Post Holdings, and General Mills—have experienced a decrease in sales in recent years, and this trend is expected to continue. Aside from a significant (5.2%) sales increase in 2020 due to more people eating breakfast at home during the pandemic, sales have been steadily declining, with an 8.7% drop in 2021 and another 3.9% decrease in 2022.
The Journal highlights that while cereal consumption was high in the ’80s and ’90s due to nutritionists promoting carbohydrates over high-protein, high-cholesterol foods like eggs, experts now caution against starting the day with breakfast cereals due to their high sugar content. Barclays analyst Andrew Lazar tells the Journal that more consumers are turning to frozen breakfast options like burritos or convenient choices such as breakfast shakes or bars. A recent poll indicates that fewer Americans are eating breakfast, according to Paste Magazine, which further contributes to declining sales. The article suggests that repositioning cereal as a dessert or snack could help revive the appeal of sugary products that may not be suitable for the breakfast table, such as Cookie Crisp.
Among the major players, General Mills has managed to weather the decline in the cereal industry the best. Lazar states, “General Mills has been primarily responsible for driving growth in the category through marketing and innovation.” On the other hand, Kellog has separated its cereal business as a standalone entity. Yahoo! Finance notes that the gluten-free market is an exception to the trend, experiencing a surge in global sales and projected to reach a market size of $15.7 billion by 2032. (It’s worth noting that certain breakfast cereals fortified with vitamins may pose a risk to children.)
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