PepsiCo and Kellogg lead breakfast cereal sales on Amazon: One Click Retail

According to One Click Retail’s analysis, breakfast cereal, which is divided into cold and hot subcategories, has reached around $50m on Amazon so far this year.

While cold cereal is larger than its hot counterpart in sales value, registering slightly more than $30m, hot cereal grew faster with a 30% growth rate, driven by a strong winter season in terms of sales in 2018.

According to One Click Retail, ‘Weekly sales of hot cereal from January to March of the year peaked just shy of $500k, compared to only about $300k during the first three months of 2017.’​

Variety packs are the biggest trend

Jacob Porter, global marketing director at One Click Retail, said Kellogg and PepsiCo’s Quaker led in the cold and hot cereal subcategories respectively, with products like Kellogg’s Frosted Mini-Wheats and Favorites Single Serve Cups, and Quaker’s Instant Oatmeal Express Cups.

He said the biggest trend is variety packs, which account for two-thirds of these leading items, including Quaker’s Instant Oatmeal Variety Pack and Instant Oatmeal Lower Sugar Variety Pack.

“The leading cold cereal, Kellogg’s Frosted Mini-Wheats, is the exception to this trend,”​ Porter said, adding the product is also the only one of the six major-brand items on the list that does not come in single-serve packaging.

“Individually-packaged servings are common in the breakfast cereal category because of their portability and their shelf-stability.​

“But a broader look at the category indicates that single-serve packaging may be losing its appeal, especially when look at third-party (3P) sellers and emerging brands,”​ said Porter.

Third-party sellers respond faster

Although major brands make up the majority of the top-selling cereal products on Amazon, 3P sellers are able to respond to changing consumer needs more quickly, especially in the cold cereal category.

Porter noted first-party (1P) sales grew 10% in the category, which as a whole grew 20% in sales year-over-year, while 3P sales nearly doubled.

“This brings 3P cold cereal sales to almost $12m, a 40% share of the subcategory and growing,”​ he said.

“3P sales of cold cereal is entirely comprised of products marketed to health-conscious consumers. For instance, the bestselling 3P cold cereal from ProGranola includes the following in its Amazon product title: ‘Paleo; low net carb; gluten free and grain free’.”​

However, healthy products are not limited to 3P sellers, added One Click Retail. Some of the emerging brands sold by 1P sellers, such as Nature’s Path Organic Cereal, are attracting more consumers by marketing healthy ingredients on their packaging.

Porter added the same trends are also visible in the hot cereal subcategory.

“The number two breakfast cereal year-to-date on Amazon is a 3P hot cereal: Bob’s Red Mill Rolled Oats. [It is] also the number two hot cereal brand by market share, controlling 20% of the subcategory.​

“This success can be attributed to numerous factors including high-quality page content, which accentuates the nutritional benefits of whole grain oats, and a very prominent ‘Non-GMO’ stamp on the product detail page,” ​he said.