SUBSCRIBE NOW Just 99¢ for your first month

ADVERTISEMENT

ADVERTISEMENT

Cereal was a winner in the pandemic, but sales show signs of wavering

The pandemic awoke the sleepy segment, pushing U.S. cereal sales back above $9 billion in 2020 — good news for the two Minnesota companies, General Mills and Post Consumer Brands, that together sell half of all ready-to-eat cereal in the U.S.

BIZ-CORONAVIRUS-CEREAL-MCT
The pandemic pushed U.S. cereal sales back above $9 billion in 2020 — good news for the two Minnesota companies, General Mills and Post Consumer Brands, that together sell half of all ready-to-eat cereal in the U.S.
General Mills / TNS
We are part of The Trust Project.

Consumers had been lured away from cereal aisles in recent years by a fast-growing menu of other exciting breakfast options, at restaurants and home.

The pandemic awoke the sleepy segment, pushing U.S. cereal sales back above $9 billion in 2020 — good news for the two Minnesota companies, General Mills and Post Consumer Brands, that together sell half of all ready-to-eat cereal in the U.S.

But as lockdown stockpiling eased from their heightened levels, sales slipped this year to $8.66 billion, according to IRI, a Chicago-based market research firm.

Still, General Mills has managed to increase its U.S. market share for 37 straight months, the company says, tightening its grip as the country's top cereal producer.

"Our performance is not driven by short-term competitive supply chain dislocations," said General Mills' president of North American retail, Jon Nudi. "It's the result of consistently bringing compelling consumer ideas, relevant innovation, strong levels of investment and excellent execution to the best brands in the category."

ADVERTISEMENT

Over 52 weeks ending Oct. 31, General Mills sold $2.85 billion worth of cereal in the U.S., according to IRI. That was 4.4% lower than the year before, but sales fell further among its largest competitors, Kellogg Co. and Post Consumer Brands.

General Mills' Honey Nut Cheerios remains the top-selling cereal in the U.S., with the Golden Valley-based company's Cinnamon Toast Crunch in second.

According to IRI, Honey Nut Cheerios had higher sales than all store brands — such as Target's Good & Gather or Costco's Kirkland Signature — combined.

Private label, as the often less-expensive store brands are collectively known, saw a 15% drop in sales over the past year even as inflation caused a spike in food prices.

Also Read
Columnist Lovina Eicher says warm weather means spring cleaning for the big upcoming church service.
Food writer Holly Ebel says the right glassware makes for a better drink at Rochester's Bitter & Pour.
U.S. President Joe Biden met on Thursday with executives from infant formula manufacturers and retailers, pressing them to do everything possible to get families access.

"People are not trading down to private label, people are going to brands they know and trust," General Mills chief executive Jeff Harmening said. "Eating at home raises all boats but we've done better than most."

Michigan-based Kellogg, which weathered a two-month strike at its cereal plants that recently ended, saw U.S. sales slip 8.8%. Its Frosted Flakes and Froot Loops are the third and seventh best-selling cereals, respectively.

The company in November blamed supply chain disruption for its slower cereal sales, which represents 20% of Kellogg's global business.

"The performance of key brands in the U.S. has been impacted by supply complications in North America, but internationally, we're seeing good growth," Kellogg chief executive Steve Cahillane told investors in November.

ADVERTISEMENT

Post Consumer Brands makes the fifth-best-selling cereal, Honey Bunches of Oats, which saw a 10% drop in sales after enjoying a pandemic-fueled bump the year before.

Among the top 20 best-selling cereal brands, only Fruity Pebbles and Cocoa Pebbles saw sales increase from Oct. 31, 2020, to Oct. 31, 2021, according to IRI.

The outlook for cereal has been revived somewhat by the lasting effects of pandemic-era grocery shopping and a permanent shift to more people working from home.

"People will work at home more than they have before, once this pandemic hopefully ends," Harmening said. "Which is more people eating at home, which is great for us."

©2021 StarTribune. Distributed by Tribune Content Agency, LLC.
Related Topics: FOOD
What to read next
Members Only
Brand Sampson and Marty Frana of Rochester-based Limb Lab recently received a patent for the design of a new "universal digit" prosthetic.
Members Only
On Thursday, Mayo Clinic posted an unaudited consolidated financial report from the first quarter on the Electronic Municipal Market Access website. The report showed revenue was up 6.9% over the same quarter in 2021, when Mayo Clinic reported $3.67 billion in revenue. However, the operating margin for Q1 2022 is 3.6%, which is well below the 6.6% margin that Mayo Clinic posted in the first quarter of 2021.
But convention activity hasn't returned to pre-pandemic levels as the number of city hotels grew.
Members Only
Eureka Kids, a Rochester child-care facility at 3675 Ninth St. NW, will double its capacity this fall after acquiring and remodeling an empty building, across Ninth Street from its current complex.