Say good morning to sales
How can you cater to customers' breakfast needs in the smartphone age? Think fresh, frozen, healthy and portable
There’s no mistaking technology’s impact on our daily lives. Being connected everywhere (thank you, smartphone) has quickened our pace and encouraged us to do more in a day than ever before.
As it turns out, the same trends driving our desire to plug in are steering the way we fuel up at breakfast. Understanding this shift is important because the first meal of the day is just as crucial to grocery retailers as it is to consumers.
Overall, Canadians still eat breakfast. It’s just that they eat it differently than before. Ready-to-eat cereal, for example, is easily the largest breakfast category in Canada, at $1.1 billion annually. But sales are slipping. While most breakfast categories are growing, sales of ready-to-eat cereal have declined 4.2% since 2012.
Cereal’s slump doesn’t mean consumers no longer sit down to eat in the morning. They do. It’s just that, feeling rushed, they’re craving something else.
Many find that “something else” in the frozen aisle. Sales of frozen waffles, pancakes and French toast–a $124 million category–have jumped 3.3% over the past two years. Breakfast items baked in-store, such as bagels, muffins, cinnamon buns and croissants, as well as store-baked breads, are also benefiting from a desire for convenience around the breakfast table, with growth of 6% and 5% in the last year, respectively.
Yet convenience is only one part of today’s breakfast equation. Another is health and wellness. People want to start their day with something nutritious. Consequently, they’re reaching for alternatives to old standbys, such as toaster pastries and powdered instant breakfast beverages. The combination of being hungry for something quick and healthy has kick-started a boom for yogurt, driven by Greek yogurt. Sales in this growing category now total $1.4 billion, which is up 7% compared to 2012.
Cracking the Canadian breakfast market is no easy feat, but consumers’ quest for both healthy and portable options such as Greek yogurt has inspired brands to get creative. Take Mondelēz, for example. When the company looked across the Canadian breakfast category a few years ago, it knew consumers had many great options from which to choose. But it felt something was missing. To meet that unmet demand, Mondelēz introduced Canadian consumers to health and nutrition in the form of something new to them: a breakfast biscuit.
Why a biscuit? Mondelēz believed its BelVita breakfast biscuit, already a hit in Europe, offered something unique: a sustained energy benefit. Unlike caffeine’s shorter energy burst, BelVita biscuits have a combination of grains that, when baked, release energy into the body throughout the entire morning.
Even though many consumers are dashing and dining as they start their day, not everyone has abandoned the kitchen in the morning. For example, hot-cereal sales have been trending up even as their ready-to-eat siblings are losing favour. While sales of hot cereals grew only 2% for the 52 weeks ending August, they’re up 7.8% since the end of 2012. Fresh eggs are also still a breakfast staple, with sales up 3% in the 52 weeks to August, and 6.5% since 2012.
So how can you win at breakfast? For starters, keep in mind that consumers are busier today, which leaves less time for formal meals. Retailers and brands should also cater to key breakfast trends. So to start, focus on fresh. Consumers are spending less time planning and preparing meals, but they’re still focused on quality, taste and freshness. It’s no wonder store-baked goods sales (a $405-million segment) are up 5.4% in the past 52 weeks.
Second, offer products that taste good and pack a health benefit. For example, instant breakfast shakes. Even with sales at a shy $24 million, breakfast shakes are posting double-digit growth (up 29% versus a year ago). And don’t forget about cereal. Yes, sales of ready-to-eat cereals are down, but an opportunity still exists in gluten-free, no-GMO and no high- fructose offerings that cater to the more health-conscious consumer.
Lastly, remember your hurried customer, ever tethered to her smartphone. She wants convenience. Help her get it, whether she’s in your frozen department, bakery or, yes, even the cereal aisle.