If your idea of a good breakfast is a bowl of Frosties, Cheerios or Shredded Wheat you're pretty much in tune with the rest of the nation. According to Mintel, 53% of British adults eat cereals at least once a day, which explains why the UK accounts for just over half the entire European market.
But our ready-to-eat (RTE) cereals business is not exactly booming. Mintel estimates UK sales will grow by just 6% in value over the next four years, compared with 34% in the burgeoning Italian market.
It's easy to blame the rise of on-the-hoof cereal bars for taking the shine off the traditional cereal category, but Asda cereal buyer Ian Martin says that's too simplistic. Yes, cereal bars do provide growth opportunities, he says -- new launches are evenly split between bars and RTE -- but traditional cereals are still the biggie. At Asda, for example, bars account for just 15% of category sales. "The conundrum is that the margin and price points are better for retailers on bars," says Martin.
Meanwhile, Britain's plummeting birth rate is causing manufacturers concern. The number of under-15s -- a key target for RTE cereals -- has been falling for five years, and that's forcing the sector to look at other segments of the population for growth.
Fortunately, the advance into middle age of the baby-boomer generation is better news for cereal makers. Forty- and 50-somethings, as Mintel points out, combine traditional eating habits with healthy diets and over the next few years, the researcher suggests, this will inspire a broad range of wellness cereals.
As in so many categories, health has been the watchword of late, but cereals have a head start. Always seen as a healthy option -- even if that's not always justified by what's in the packet -- the range of genuinely healthy cereals is definitely growing with the addition of everything from added-fruit mueslis to functional products with probiotic bacteria.
"In the past few years, we have seen a move towards more scientific and specific health claims," says Mintel in its latest market report, "with prebiotic and probiotic cereals starting to become more widely available." And this trend is not limited to a few niche producers. Supermarket own-label and major brands have also leapt on the bandwagon, both in the UK and further afield.
In Spain, for example, retailer Carrefour has launched its own muesli with added 'good bacteria' in the form of balls of lactobacillus acidophilus yoghurt. In Germany, Bioquelle's Knüsperli Flakes Probody Plus contains prebiotic active agents, including oligofructose, to promote gut flora and help balance the digestive system. Closer to home, Kellogg's has recently hit the kids' market with Rice Krispies Muddles. Made with rice, oats and maize, Muddles contains the plant extract inulin -- again, to promote those 'friendly' gut bacteria.
Mounting concerns over salt, sugar and fat levels in processed foods, especially those aimed at children, have added impetus to the creation of healthier options -- provided they taste good, too. "There are always opportunities to improve," says Asda's Martin. "The key issue is maintaining taste while improving salt and sugar levels. We have to remove them slowly to allow the majority of consumers' tastes to develop, while at the same time offering truly healthy alternatives." But he predicts these will emerge slowly, with NPD focusing on 'cleaning up' existing RTE cereals, such as Kellogg's Reduced Sugar Frosties.
Ingredient suppliers have not been slow to see which way the wind is blowing. "Demand for natural and healthy products is rising," declares Meneba, a Dutch producer of speciality grain-based ingredients which has just opened a multi-purpose processing plant in Weert to provide grains and milled flours with health as well as functional benefits. It says products offering higher nutritional values -- without compromising quality -- are increasingly replacing conventional cereals.
Meneba's ingredient range includes cereal flakes made from oats, corn, wheat, barley, rice and rye, all offering a natural source of dietary fibre as well as good bite. It also sells wheat bran, which is rich in fibre, and wheat germ, which is a good source of Vitamin E and folic acid as well as adding a nutty flavour and texture.
Meneba is also using its own, patented system to produce an all-natural puffed cereal that, the supplier says, "loses none of its nutritional value". The process, dubbed Presco, uses a form of steam pressure-cooking to 'explode' the grain, and can be applied to wheat, rice, rye, barley and maize. These can be purchased either as whole, expanded grains or in ground form, dried to a specified moisture content. They are also available with a sweet coating.
At global ingredient supplier National Starch, Mike Croghan, global business director, nutrition, says that while there are some nutritionally-sound cereals on the market "they tend to be quite niche"
"Cereals are perceived by consumers as being nutritious, but in many cases they don't deliver," he says, pointing out that sugar content as high as 40% is not uncommon. He is particularly scathing about the majority of kids' products. "They may be high in vitamins, but you are basically eating a bag of sugar."
Arguments about the nutritional value of breakfast cereals swiftly move into a confusing world of scientific claim and counter-claim. And the Atkins diet hasn't helped. For years we were told to eat a diet high in carbohydrates, such as cereals, and low in fat. But Atkins reversed the perceived wisdom and created widespread interest in low-carb options.
Mintel reports that in the 12 months to March 2004, low-carb/high-protein products accounted for 9% of cereal launches in the US, the homeland of Dr Atkins. Globally the figure was only 1%.
But there are carbohydrates and carbohydrates, and the complex carbs that are considered more beneficial can be virtually destroyed in some manufacturing processes. The result, says National Starch's Croghan, is that many carb-rich cereals fail to deliver a slow, steady release of energy.
"What they give is a massive upsurge in blood glucose, accompanied by a massive surge in insulin, and then it comes crashing down. The focus should be on glycaemic index, or 'steady energy', and avoiding that roller-coaster."
There are signs that the emphasis on nutrition is already moving from low-carb to low-GI (glycaemic index), which measures the effect of carbohydrates on blood sugar levels. South Africa and Australia have already led the way in on-pack GI labelling to help consumers choose steady energy foods over quick-hit varieties. And this is where National Starch is putting much of its focus, principally through its Hi-Maize resistant starch.
Resistant starches have been around since the 1980s, and appear to offer several benefits in terms of processing and nutrition. They are not absorbed in the small intestine, but pass undigested into the large intestine where they can be fermented by natural bacteria giving improved colonic health, greater faecal bulk and controlled energy release.
Not all resistant starches perform in the same way, but National Starch's Hi-Maize is relatively process-tolerant and has already been used for fibre enrichment, textural enhancement and for extending 'bowl life'. Reformulating products to include 10-20% of a resistant starch can also significantly improve their GI rating.
In countries like Australia, where low-GI technology is being taken on by the mainstream, Hi-Maize is a supported brand with the logo featured on cereal packets. National Starch, meanwhile, promotes it through dieticians and nutritionists.
Only one Hi-Maize co-branded cereal has so far been launched in the UK, a Dr Vogel product, and Croghan predicts other UK food sectors may adopt resistant starches before mainstream cereals brands. Products do have to be thoroughly reformulated to accommodate it, and only about 40% would be able to do so easily, while a further 30% would call for "a bit of tweaking". The other 30% high temperature, high shear extrusion processes would probably "rip it apart", says Croghan. But he is confident resistant starches are the way forward for breakfast cereals. It's just a question of when.
"We've just seen the Food Standards Agency come down heavily on salt. Maybe people will start saying we shouldn't be eating products with 30% sugar?" FM
Sources: Mintel Pan-European Breakfast Cereals, April 2004, and Mintel Global New Products Database.