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Why are cereal sales dropping?


Corn flakes was the focus of a recent piece in The Atlantic by writer Rachel Smith. She looked at what’s in them, what’s not in them, and how they were invented in Battle Creek by John Harvey Kellogg and his brother Will Keith.

Nowadays, cereal sales are dropping and Wall Street observers think Kellogg's is ripe for a takeover.

Declining sales or not, Kellogg's is still a big player in the West Michigan landscape and economy, and breakfast cereals still take up huge grocery store sections.

“It’s still the number-one thing that we’re having at breakfast all the time, but there’s definitely more influences at breakfast time now,” said Darren Seifer, a food and beverage analyst for NPD Group, a group that keeps close tabs on consumer behavior.

One of those influences is the growing importance of "freshness" for younger generations.

“That doesn’t necessarily bode well if you’re a category that’s located in the center of the store,” Seifer said. “And particularly at breakfast time, we’ve seen a lot of consumers have more eggs in the morning and more pancakes in the morning, as a way to get a little bit more freshness as they start their day.”

According to Seifer, convenience in the kitchen takes on a different meaning for millennials than it has for Generation X and older generations.

The older generations rely on frozen entrees and other quick options, like cereal, in order to save time.

“But when we look at millennials and younger, it looks as though they’ll spend a little more time with their products – the foods that they’re going to consume – in order to get some sense of freshness out of them,” Seifer said.

He added that millennials still want the kitchen experience to be a fast one, but instead of relying on quick food options, they’re relying on appliances for short cuts.

More than just freshness, people are now looking towards more healthy options. Some cereals fit the bill, if they’re made of whole grains and little sugar. The opposite is true of other cereals, however, which is problematic, since sugar is the meal component most adults are striving to avoid in their diets.

“And it doesn’t exactly bode well for something that is sugary, gluten-laced and not quite fresh sitting at the center of the store,” Seifer said.

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