Progressive Grocer

AUG 2015

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Planned purchases across breakfast category Source: Ipsos Marketing Together, these attributes and consumption trends suggest several projected growth areas in RTEC. Health and wellness-oriented cereals are projected to grow, as are granola and muesli, all of which wear the whole-grain "health halo." Meanwhile, the growth of beyond-breakfast cereal consumption bodes well for RTEC products designed for later-day or immediate eating occasions, such as smaller-sized, on-the-go cereal snack packs. In fact, leading brands have already begun leveraging innovation to jump start the conver- sation and boost growth: Kellogg and General Mills are launching more than 90 new products this year, according to Nielsen. 22 Category growth will also be fueled by several key demographics. Cereal has long been a go-to for busy parents, and RTEC continues to have a higher-than-av- erage buy rate among bustling families. 23 Other demo- graphics have emerged only more recently. Hispanics now represent one of the biggest RTEC consumer segments, averaging one extra box purchased per year compared with the general population; 24 the Top 6 Hispanic brands are Cheerios, Honey Bunches of Oats, Kellogg's Frosted Flakes, Special K, Cinnamon Toast Crunch, and Froot Loops. 25 By 2018, an estimated 83 percent of the category's growth will be fueled by His- panics, 26 which represents a challenge for retailers and manufacturers. Overall, cold cereal consumption remains very high, with 9 in 10 U.S. households purchasing cold cereal at least occasionally. 27 And though sales slipped in the past few years, the good news is that shoppers are not abandoning the category. Te opportunity is in buy- rate: Among households whose RTEC purchases have declined, most weren't even aware they were buying less cereal 28 –they were simply buying cereal less ofen. 29 Retailers can take additional steps to boost RTEC sales. In the next section, we'll lay out strategies for engaging with cereal consumers both before they enter the store and once they're in the aisle. RTEC path to purchase Let's start with a step-by-step look at the path to pur- chase in RTEC. As mentioned previously, cereal is usually a planned purchase. Accordingly, nearly all (98 percent) RTEC shoppers do some sort of preparation before they hit the grocery store, 30 with the majority opting to make a list (84 percent) 31 or check the pantry (60 percent) to see what's needed. 32 Many shoppers also ask other members of the house- hold what items are needed or preferred, and prioritize their budget around foods with "mass appeal," especial- ly in households with kids. 33 Many parents even fnd themselves craving foods their kids recommend–8 in 10 shoppers say a child's request has lef them wanting a breakfast food again. 34 Brand names also play a big role in the decision-mak- ing process. In fact, the Top 10 RTEC brands make up 45 percent of all category sales, 35 including Cheerios, Special K, Kellogg's Frosted Flakes, Cinnamon Toast Crunch, Mini-Wheats, Kellogg's Raisin Bran, Lucky Charms, Froot Loops, Chex, and Cap'n Crunch. 36 3 R T E C A N D H I G H E R C E N T E R S T O R E S A L E S Product Planned purchase Eggs 94% Yogurt 89% Fresh fruit 89% Cold cereal 89% Bagels/bread/toast 88% Breakfast meats 88% Hot cereal 87% Hash browns/tater tots 82% Energy drinks 80% Frozen pancakes/wafles 80%

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