The market research firm puts total US retail sales of packaged breakfast baked goods at $4.9 billion for 2012. However, it said health and diet concerns surrounding both packaged foods and bread and pastry products have “stunted” the segment’s growth.
Meanwhile, a Euromonitor analyst says price is likely to steer consumers away from the increasingly expensive cereal aisle in search of cheaper alternatives.
Too busy to breakfast
Tom Pastre, an analyst behind the report, told BakeryandSnacks.com that the on-the-go trend could potentially benefit the packaged breakfast baked goods segment more than the struggling cereal sector since these products are portable. However ultimately he said the continued US trend towards skipping breakfast or eating it on the go hurts both cereal and packaged breakfast baked goods since cereal does not play to the convenience trend and packaged bread and pastry products may not appeal to increasingly health-conscious consumers.
Wake up and smell the…
Pastre said: “People are looking to cut back on sugar, fat and bread. Plus more and more for breakfast they are grabbing snack, granola and cereal bars, or handheld breakfast sandwiches at home or in fast food restaurants, coffee shops, etc.”
He pinpointed Kellogg’s Special K as a good example of a traditional cereal that has evolved into a breakfast product brand.
The report said the packaged baked breakfast goods market had been stunted by health and diet concerns, changing eating patterns and an increasing desire for fresh rather than packaged foods.
“Sales have increased slowly by a CAGR of 0.4% since 2008. They rebounded a bit in 2009 and 2010 but declined in 2011 and 2012, partially the result of Hostess’ bankruptcy and closing of its business,” it said.
Searching for an alternative
Discussing the breakfast market with BakeryandSnacks.com, Stuart Becker, Canada analyst for Euromonitor International, said there would be a consumer shift away from cereal based on price.
“The cereal aisle has evolved into one of the most expensive categories in frequently shopped household food products and at some point people will look for alternatives. There are many other products that can be eaten for breakfast, including a growing selection of fresh baked goods such as bagels, croissants and breads in grocery stores, which are significantly lower cost. Healthy options such as fruit and yoghurt are also replacing cereal,” he said on a Linkedin discussion.
Becker said that pressures on family budgets are making expensive cereals an increasingly less attractive choice when shopping.
However, according to Packaged Facts, growth in the packaged breakfast baked goods market will essentially be flat. The firm forecasts a CAGR of 0.2%, reaching $5bn in sales by 2017. Within this donuts hold the largest slice of total US sales (20%), followed by shelf-stable pastry/Danish/coffee cake (18%), bagels and bialys (17%) English muffins (14%) and toaster pastries/tarts (13%) and muffins (10%).
Bimbo controls 35% of mass market
According to the Packaged Facts report, in the US Bimbo Bakeries accounted for 35% of retail sales for the 52 weeks ending mid June 2013, with the nearest competitor holding a 12% share and all other players just single digits.
The firm derived nearly 90% of its 2013 sales from two brands – the muffin, bagel and flavored toast brand Thomas' and the cake and bread brand Entenmann's.
According to the report a 60% drop in sales for firm Hostess between the periods 2012 and 2013 created a “void in the market” and opportunity for other mass producers of sweet breakfast goods. The researchers said McKee Foods’ Little Debbie brand experienced a sales increase of 25% as a result, while Bimbo and Flowers saw a 60% increase in sales for its Tastykake brand in this period.