Executive Summary
The UK breakfast cereals market includes cold ready-to-eat (RTE) cereals,
such as cornflakes and muesli, and hot cereals, such as porridge oats and other
instant hot cereals.
The retail market for breakfast cereals was worth an estimated £1.04bn in
1994. This represents an increase of 6.4% on the previous year and is 36.4% up
on the market's 1989 value. The volume of goods sold reached 450 tonnes in
1994, 2.5% up on the previous year, and 12.8% up on 1989 sales.
Between 1989 and 1994, both sectors achieved growth. Sales of RTE cereals rose
by 12.8% and value sales increased by 36%. Volume sales of hot cereals rose by
12.5% during this period, while value sales increased by 36.8%.
Growth in both sectors has been fuelled by the continuing trends towards
healthy eating and snacking. In addition, the RTE sector has benefited from the
increasing popularity of breakfast cereals among children and a growing child
population. In addition, innovative product launches have maintained consumer
interest, while heavyweight advertising serves as a constant reminder of the
leading brands.
The market is highly concentrated, dominated by the Kellogg Co. of Great
Britain, Weetabix Ltd, Cereal Partners UK and Quaker Oats Ltd. Kellogg holds
the major share, around 42% of total market volume, while Weetabix, Cereal
Partners and Quaker together hold 31%.
Main media advertising expenditure is exceptionally high in this fiercely
competitive market. In 1994, a total £104.8m was invested in the main
media, equivalent to more than 10% of total retail sales value and 23% up on
the previous year's expenditure.
The retailing of breakfast cereals is dominated by the grocery sector. The
multiples account for 86% of total sales volume, with the remainder going
through co-ops, independent grocers, discount stores and health food stores.
Growth is expected to continue in the breakfast cereals market over the next 5
years. Volume sales are forecast to increase by 5% between 1995 and 1998, to
reach 483 tonnes. Over the same period, the value of the market is forecast to
increase by more than 21%, bringing sales to just over £1.3bn.
Ninth Edition 1995
Edited by Samantha Miller
ISBN 1-85765-438-2
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