Cereal Behavior

Top cereal manufacturers are introducing gluten-free offerings in hopes of sparking the category. According to a number of industry observers, one reason for the slowdown in cereal sales is the growing awareness of celiac disease and more and more consumers’ desire for a gluten-free diet. The various cereal suppliers are trying to alleviate these concerns. For example, General Mills announced earlier this year that starting this summer five Cheerios products (original, honey nut, multi-grain, apple cinnamon and frosted) will be gluten-free. Company officials say that as much as 30% of consumers avoid gluten and these consumers are searching for other options. Not to be outdone, Kellogg offers a gluten-free version of its Special K Touch of Brown sugar cereal. In general, these have not been heady times for the ready-to-eat cereal market. According to Chicago-based IRI, dollar and unit sales dropped during the 52-week period ended May 17, and that has many retailers and suppliers concerned. At the same time, many merchants remain committed to the category, realizing its importance to the overall center store and the total operation. “This is simply too important a category for us to start fooling around with it and taking away space,” says one cereal buyer for a Florida-based chain. “Actually, with all these line extensions, we are giving the category even more room. There are not too many categories that have no sales growth but get more room at our chain.” Some good news for the overall cereal market comes from the hot cereal/oatmeal segment, where dollar sales grew by more than 2% during the tracked period.