It’s the Breakfast of Champions No More: Cereal Is in Long-Term Decline

livemint.com:

Americans have been out of love with cereal for a while. Now what? That is the question facing three giants of the industry that once dominated the American breakfast table: General Mills, Kellogg and Post Holdings. There is still money to be made in a slowly declining market, but there are no easy paths ahead.

Companies will have to be tireless in updating their products and marketing to match changing consumer tastes–an area where General Mills has lately stood out as the leader. In the 80s and 90s American families gorged on cereals. Powered in part by a not-quite-right belief that eggs were dangerously high in cholesterol, carbs ruled the morning.

But families stopped going coo-coo for Cocoa Puffs more than a decade ago. The pendulum has swung with a vengeance away from sugar and carbohydrates and back toward protein. The pandemic briefly brought out the tiger in cereal sales.

Families ate more breakfast at home and got less fussy about what they were eating. Unit sales of ready-to-eat cereal in the U.S. rose 5.2% in 2020, according to industry tacker Circana.

But they plummeted 8.7% in 2021 and another 3.9% in 2022. Recent trends seem to have given fresh momentum to the downturn, says Barclays analyst Andrew Lazar. A general shift to frozen foods has increased the popularity and availability of alternative, high-protein options like frozen breakfast sandwiches and burritos.

Meanwhile, on-the-go lifestyles have fueled demand for portable options like bars and shakes. Fast food companies have expanded their portable breakfast offerings too. Each of those alternatives is better suited for a morning spent on the run: Just try eating a bowl of Frosted Mini Wheats while driving to work.