The industry is constantly innovating to satisfy a health-conscious market
London, United Kingdom (PRWEB) July 25, 2012
The Breakfast Cereals Production industry has managed to retain its crunch over the past five years despite a difficult trading climate. Britons are the largest consumers of breakfast cereals in Europe and the second-largest in the world, with about 87.0% of households consuming a cold breakfast cereal at least once per day. While this is an encouraging trend, the industry's operating environment has been affected by commodity price volatility, falling consumer spending and the global economic malaise, which have put pressure on prices and volumes. However, producers have been proactive and able to respond to changing markets by releasing innovative products and advertising aggressively. According to IBISWorld industry analyst Suzannah Rowley, “the main focus has been on health, convenience and portability, which has been successful in making inroads in a mature and stagnant market”. In the five years through 2012-13, industry revenue is expected to grow by an annualised 0.5%. The industry is forecast to generate revenue of £2.1 billion in 2012-13, an increase of 0.4% on the previous year.
Over the next five years, the industry will remain resilient. Growth is expected to be driven by innovation, the economic recovery and a continuing trend of snacking. Busy lifestyles, health concerns and convenience will continue to determine new product introductions and the type of strategy followed by producers. Rowley adds, “products such as cereal bars, fruit bars and muesli bars are expected to be strong drivers of revenue and profitability due to their higher margins and brand equity”. The economy is forecast to trend favourably over the next year, which will result in a resurgence of consumer confidence and spending. Threats posed by an aging population will shift consumption trends, with more adult-focused products expected to come on-stream. Over the five years through 2017-18, industry revenue will grow.
The Breakfast Cereals Production industry is estimated to have a medium level of market share concentration with the top four players accounting for over 45% of the industry. The market is dominated by multinational food giants such as Kellogg's, Latimer Group (Weetabix), Cereal Partners Worldwide (Nestle and General Mills) and PepsiCo that own iconic household cereal brands such as Coco Pops, Special K, Weetabix and Cheerios that command a high level of customer loyalty. Consequently, manufacturers have spent large amounts of money in protecting their market share by constant new product introductions and aggressive promotional campaigns.
For more information on the Breakfast Cereals Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes companies that manufacture cereal breakfast foods and undertake rice milling and vegetable milling activities, except the production of potato flour and meal.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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