Cereals won in the pandemic
In recent years, consumers had been drawn away from the grain aisles by a rapidly growing menu of other exciting breakfast options, in restaurants and at home.
The pandemic has woken up the sleepy segment, pushing US grain sales above $ 9 billion in 2020 – good news for the two Minnesota companies, General Mills and Post Consumer Brands, which together sell half of all ready-to-eat cereals in the United States
But as foreclosure stocks fell from their high levels, sales have fallen this year to $ 8.66 billion, according to IRI, a Chicago-based market research firm.
Nonetheless, General Mills has managed to increase its market share in the United States for 37 consecutive months, according to the company, thereby strengthening its grip as the country’s largest grain producer.
“Our performance is not driven by short-term competitive dislocations in the supply chain,” said Jon Nudi, General Mills president of North American retail. “It’s the result of consistently bringing compelling consumer ideas, relevant innovation, high investment levels and excellent execution to best-in-class brands. “
In the 52 weeks ending Oct. 31, General Mills sold $ 2.85 billion worth of grain in the United States, according to IRI. This was 4.4% lower than the year before, but sales fell further at its biggest competitors, Kellogg Co. and Post Consumer Brands.
General Mills Cheerios Honey Nut remains the best-selling cereal in the United States, 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 labels, as the often cheaper store brands are collectively known, have seen their sales drop 15% in the past year, even as inflation has caused food prices to soar.
“People don’t go to private label brands, people go to brands they know and trust,” said General Mills chief executive Jeff Harmening. “Eating at home lifts all boats, but we did better than most. “
Michigan-based Kellogg, which survived a two-month strike at its grain factories that recently ended, saw sales in the United States drop 8.8%. Its Frosted Flakes and Froot Loops are the third and seventh best-selling cereals, respectively.
In November, the company blamed the supply chain disruption for its slower grain sales, which account for 20% of Kellogg’s global business.
“The performance of key brands in the United States has been affected by supply complications in North America, but internationally we are seeing good growth,” Kellogg Managing Director Steve Cahillane told the investors in November.
Post Consumer Brands makes the fifth-best-selling cereal, Honey Bunches of Oats, which saw sales drop 10% after experiencing a pandemic-fueled crisis the previous year.
Among the 20 best-selling cereal brands, only Fruity Pebbles and Cocoa Pebbles saw their sales increase from October 31, 2020 to October 31, 2021, according to IRI.
The outlook for grains has been revived somewhat by the lasting effects of grocery shopping in the era of the pandemic and a permanent shift towards more people working from home.
“People will be working from home more than they did before, hopefully once this pandemic is over,” Harmening said. “Meaning more people are eating at home, which is great for us. “
The pandemic has brought grain sales in the United States above $ 9 billion in 2020 – good news for the two Minnesota companies, General Mills and Post Consumer Brands, which together sell half of all ready grain to consume in the United States