Global Breakfast Cereal Strategies

DETROITGlobal demand for American-style breakfast foods is on the rise, and cereal manufacturers are scrambling to gain market share in countries like China, India and Brazil, as reported by Advertising Age in a recent feature (see Cereal Marketers Race for Global Bowl Domination). The competition is largely comprised of the Kellogg Company, PepsiCo (via its Quaker brand) and Cereal Partners Worldwide, a joint venture of General Mills and Nestlé.

These companies often find that the primary source of competition is traditionthe breakfast foods that people in these countries have eaten for many years (often centuries). Breakfast around the world is probably the meal that is most rooted in tradition, says Gannon Jones, chief marketing officer PepsiCo, in the AdAge article. For instance, a common breakfast item in China is congee, a type of rice porridgeeither left thin and watery, or drained so it has a texture not unlike oatmealsometimes accented with dried breadsticks called youtiao. In such markets, hot cereals like oatmeal might find appeal (PepsiCo is ramping up a globally positioned, more-universal healthy fuel campaign for Quaker). In fact, Quaker is selling a version of congee in China that includes oats, touting its quick, 10-minute preparation time (traditional congee can take one or two hours to make). In some countries, where breakfast cereal is a foreign concept, marketers are distributing cereal kits that include a bowl, spoon and cereal pouch.

Sometimes new traditions surfaceor formulators fine-tune products to mesh with local tastes. The folks at Kellogg discovered that people in Spain were adding All-Bran cereal to their coffee, and subsequently began marketing it along such lines. In parts of Europe where cold milk is not common, marketers are suggesting parings of cold breakfast cereal with hot milk. To appeal to local tastes in India, Kellogg is planning a Corn Flakes product with saffron.

Although the United States, Canada, the United Kingdom and Australia still account for 54% of global breakfast cereal consumption (by 6% of the global population), Euromonitor International predicts that the category will only grow by 3.6% in those markets between 2011 and 2016. By contrast, the market-research firm predicts growth of 38% in China and 108% in India.