The most important meal of the day for many people is also a crucial battleground for the marketers of cereal brands.
The breakfast cereal market has experienced inflation as commodity costs have soared. Its value rose by almost 12% between 2007 and 2009 to reach £1.5bn, according to Mintel. While the cost of raw materials has gone up, retailers have been reluctant to pass on all these increases to price-conscious shoppers.
Government-backed healthy-eating campaigns have helped boost sales of breakfast cereals, and particularly benefited the 'better-for-you' options such as porridge oats. They have also increased pressure on manufacturers to improve the health credentials of their offerings: for example, Kellogg has reduced the salt content across brands such as Rice Krispies and Corn Flakes.
Product innovation remains a vital marketing tool and has been used extensively by brands fighting to maintain volume and value increases, despite the maturity of the market.
While hot breakfast cereals have performed well - value sales increased 23% between 2004 and 2009 - cold, or ready-to-eat (RTE), cereals still make up the greatest share of the market (90%). Penetration of cold cereals is high, with more than 85% of consumers eating them. There is greater room for expansion of hot cereals; just over half of consumers currently buy into the category, with the demographic skewed to the over-55s.
Families are a core audience as parents want to ensure their children start the day with a healthy meal - 55% of consumers believe 'children should always eat breakfast', according to research by Toluna. They are also likely to buy a range of cereals: more than half of consumers have at least three types in the home at any one time.
Cereal brands enjoy a high level of both awareness and loyalty among shoppers. However, a quarter say they can see no difference between branded and own-label products, so manufacturers still have work to do to convince people it is worth paying a premium for their brands. Competition in the children's market is particularly fierce.
Weetabix remains the leading cereal brand in the UK with a share of about 8%. It has maintained its position with product launches, especially in the healthy segment. These have included Oatibix Bites and Weetos Meteors. The latter variant is aimed at children and can be advertised directly to them because they are not classed as high in fat, sugar or salt.
Kellogg has been putting considerable support behind its Special K brand with TV advertising (it had the highest spend in 2009, according to The Nielsen Company) and adding variants to the range. The company has gone one step further than most by positioning the cereal as part of a dietary programme with the Special K Personal Plan for weight loss.
However, Kellogg has also come under pressure over the sugar content of some of its kids' brands, and been accused by consumer and lobbying groups of using misleading labelling.
PepsiCo's Quaker oats brand has done well on the back of the porridge revival. In 2009 it added a children's brand to its range. Paw Ridge comprises finely rolled wholegrain oats that can be cooked in the microwave.
Jordans is established in the healthier, natural cereal segment. It has redesigned its range to standardise the packaging for better shelf standout. Meanwhile, Dorset Cereals, now owned by Wellness Foods, and best known for its muesli range, extended into porridge in 2008 and added 'simple-to-cook' sachet versions last year.
Manufacturers continue to promote the consumption of cereals at eating occasions beyond breakfast to counter the effect of those who do not eat breakfast or opt for bread-based items.
Mintel predicts a further increase of 26% in value over the next five years to take the market to almost £1.9bn by 2014. When inflation is taken into account, this represents an increase of 14% in value over the period.
This article was first published on