Snaxshot #06: Part of A Complete Breakfast
tastes like nostalgia
A newsletter on upcoming food and beverage trends that offers a curation of brands and aesthetics written by Andrea Hernández.
🔮 Peek into the future:
Is cereal breakfast still a staple?
Snaxshot of market + who’s making moves.
Favorite brands in the space.
Market challenges + opportunities.
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Spoonful of Nostalgia 🌀
The earliest memories of participating in the ritual that is consuming milk and cereal in a bowl go hand in hand with Saturday morning cartoons. HBU? For 90s kids, cereals were not just a source of dubious nutrition but of entertainment, the characters on the cover became friends and we were more than happy to join in their adventures laid out on the back of each cereal box.
But as our generation grew up, the popularity of cereal declined and whether we had overindulged in nostalgia or sugar, it seemed that we collectively lost interest in preserving this ritual, even less when we became enamored with the concept of avocado toast, #foodgram and intermittent fasting.
That is until now —a new wave of cereal brands is emerging, challenging legacy brands and BigFood, as nostalgia remains a big key driver of demand for cereals as well as the rise of cereal bars across the world as the new CaaS (cereal-as-a-service)
Cereal is Dead, Long Live Cereal 🥣
Cereal has lost ground to eggs, fruit, and breakfast sandwiches as consumers are increasingly trying to reduce sugar in their diet and incorporate healthy, on-the-go, and satiating morning meals.
—U.S. cereal sales have gone stale in recent years as consumer tastes change.After several years of declining sales trends, the $8 billion U.S. cereal market’s sales were flat in 2019.
—Ready to eat cereals segment is expected to register a CAGR of 3.8% from 2020-2025.
—More than halfway through the company’s fiscal 2020, General Mills’ U.S. cereal retail sales have risen 2%.
—Kellogg saw U.S. sales decline 1% in its fourth quarter of 2019.
—General Mills expanded its market share to more than 31.5%, Kellogg’s holds 28.5% and Post holds nearly 20% of cereal category.
—Volume sales increase as of 2020:
Sales of the leading ready-to-eat cereal brands of the United States in 2019(in million U.S. dollars)
Cereal Aisle Goes URL 🛒
If you strolled past an IRL cereal aisle in the last decade, you may have noticed a dichotomy, either sugary cereals which most millennials grew up with or the boring but healthy cereal we saw our parents succumb to, cereals were overdue for disruption.
Enter Magic Spoon, Three Wishes and Off Limits —just a few of the most recognized DTC cereal startups banking on healthier and functional cereals that are reminiscent of millennials’ childhood —balancing health and good taste, something that legacy brands struggled with. (Consider the myriad of lawsuits these brand have endured over the years)
Not only have these companies innovated on a product but also how they deliver—DTC cereal does not come as a surprise for millennials who have been Primed (pun intended) to purchase more online. For upcoming brands, being able to cut the middle man allowed for them to allocate funds towards discovery and stay away from crowded shelves.
Breakfast of Champions 🏆
Magic Spoon: They’ve raised over $5.5 million dollars from the likes of Lightspeed Ventures and Neil Blumenthal as of 2020. They’ve recently celebrated their 1st year by launching a Birthday Cake flavored cereal as well as launched fall flavors featuring Apple Cinnamon and Salted Caramel. They’ve got customizable cases ($39) and also sell their own spoon and bowl set (very 90s of them)
Three Wishes: Vegan and made from chickpea, tapioca and pea protein, they also market themselves as a “childhood favorite” with “modern ingredients.” They recently launched a cocoa flavor that was tried by the original cast of Willy Wonka. They raised a small seed round at the beginning of 2020.
Off Limits: Enter functional cereals, they have two flavors: DASH, which is made with Intelligentsia coffee and cacao, and ZOMBIE that includes relaxing adaptogens like pandan, vanilla, and ashwagandha. Their boxes also come in mini sizes. They’ve modernized cereal box games and have been able to transfer that experience URL.
Thinking Outside The Box ◼️
—Licked: They are an unconventional company, they do food “drops” and their “studio” which seems to be a cafe of sorts is coming soon. My favorite thing about their cereal is that it is specifically made to be consumed only with cold brew coffee, yes, you read that right.
—Cereal and Such: They are a cereal bar in Los Angeles, launched in May of 2017. The company functions as a creative office and product company led by artist Theo Martins. The company has gone on to collaborate with Nike, Footaction, Westfield Malls & more. They label their own cereal as “ Your 2am cereal.Not your 9am cereal” which caters to adults. The artist also sells colorful bowls that go with their whole aesthetic.
—Spoon Cereal: Their Big Blue cereal is made with gluten free grains and and organic blueberries that turn milk blue. For every pack sold, they donate to The Big Blue Ocean Cleanup charity.
—Milk Over Matter: This company gets an honorary mention as its sole product are “cereal infused milks”
Crunch Time (challenges) 🛑
Low brand loyalty.
Perception of cereal as a “sugary” treat, associated with high levels of sugar.
Cereal consumption being limited to “breakfast” which poses challenges with changing dietary habits in younger generations.
Double Serving (opportunities) 🖍️
Snackification of cereal to encourage the eating of cereal after AM hours.
Highly fragmented market, highly competitive.
New ingredients that are more sustainable, healthier and gluten-free fare better with younger consumers.
Have Your Lifestyle, And Eat It Too
From Magic Spoon to Cereal and Such to Dada offering bowls and spoons as well as napkin rings and candles—brands are serving you aesthetics along with their snacks. They know that their curated looks are what has made them popular to begin with (think Magic Spoon becoming an IG sensation) as well as Dada’s infamous tablescape scenarios that feature their various snacks and it goes beyond the normal “merch” that other brands limit themselves too (shirts, caps, hoodies)
Spoonful of News
Nestlé's launching Cinnamon Toast Crunch flavored milk.
Mountain Dew is launching a hot sauce?!
Oreo created a Doomsday vault that will preserve their recipes when the world ends.
California passes Prop 22, leaving gig workers as independent contractors.
Woowa robots will deliver food to your door in 2021.
Stouffer’s is doing a merch drop on November 17th —check out their lasagna fanny pack.
See you again next week, a different future, same place.
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