Cereal sales in the United States have fallen in the last three years, from $8.4 billion in 1994 to $7.5 billion in 1996, according to Information Resources Inc. in Chicago.
Why the drop? As prices on name brands rose, many consumers voted with their wallets. They stopped buying cereal, bought less or tried store brands. Information Resources reports that sales of store-brand cereals jumped from $476 million in 1994 to $524 million in 1996.
When competition heated up, prices fell. The average retail price per pound for cereal dropped from $3.09 in 1994 to $2.92 in 1996. By mid1997, prices had dropped again to $2.80 per pound.
“Another issue affecting the decline in cereal sales might be that people are trying to simplify what they are doing to prepare meals,” says Ann Hanson, director of the NPD Group in Rosemont, which tracks national eating trends. “The growth in sales of bagels and products like toaster pastries, which are grab-it-and-go foods, has had an impact.”
So what are manufacturers doing? Some are relying on product loyalty and introductory specials to jumpstart sales as they roll out updated (read: sweetened) versions of their classics.
Kellogg’s newest Rice Krispies product is Razzle Dazzle Rice Krispies - blue, green, red and orange flakes that are sweetened.
General Mills had so much success with last summer’s Team USA Cheerios, in conjunction with the Summer Olympics, that it created Team Cheerios.
Nabisco/Post has coupled its 100-year success with Shredded Wheat and the popularity of honey-sweetened cereals to create Honey Nut Shredded Wheat in bite-size pieces.
Bonnie Liebman, a registered dietitian and director of nutrition for the Center for Science in the Public Interest in Washington, D.C., says that “consumers should beware of spinoffs, because nutritionally, they are all worse than their namesakes.”
Liebman offers some shopping tips for choosing a cereal:
Read the fine print. Whole grain or bran should be the first flour or grain on the ingredient list.
There should be no more than 3 grams of fat per serving. (Some cereals have as much fat as a regular burger from McDonald’s.)
There should be no more than 5 grams of added sugar per serving.