The big business of breakfast: IRI spotlights pockets of growth in the category

By Mary Ellen Shoup contact

- Last updated on GMT

Photo Credit: GettyImages / CocoSan
Photo Credit: GettyImages / CocoSan

Related tags: Iri, Breakfast, frozen foods

With 95% of consumers reporting to eat during the morning an average of six times a week, the breakfast occasion is a big business with several consumer trends shaping the future of the category, reports IRI.

"When you look across the universe​ [at total dollar sales]: In 2021, Total Breakfast (+4%) slightly outpaced Total Food & Beverage (+3%) but was slightly behind Total Store (+5%), but across the board we’re still seeing some large growth when you think about pre-pandemic,"​ said IRI EVP & practice leader Sally Lyons Wyatt during a recent webinar​.

"20% of grocery spending is allocated to breakfast foods and 12% of consumers increased eating and drinking in the morning more often since the start of the pandemic,"​ said Wyatt.

The vast majority (91%) of volume sales of breakfast foods is going through Brick & Mortar while 9% of dollars sales occurred online, a 1% increase from the year before, she added.

"The economic climate is driving a lot of swings, and these different swings have had an impact on what consumers are out and buying,"​ said Wyatt. 

Which breakfast categories are winning?

"There are categories that have also seen double-digit growth and have been able to weather the storm on supply chain issues, and really drive growth from a unit and dollar perspective,"​ noted Wyatt.

While many categories remained elevated vs. pre-pandemic (i.e. 2019) due to increased at-home eating occasions, some have drastically outpaced others, with weight control liquid/powder products (+23% dollar sales vs. 2020) and frozen breakfast foods (+11% dollar sales vs. 2020) leading category growth.

Other categories including milk (-1%), RTE cereal (-7%), and refrigerated eggs (-4%) all saw declines in 2021 vs. 2020, after an initial sales spikes experienced during the first year of the pandemic, according to IRI.

Evolving consumer terminology: Breakfast, morning snack, morning fuel up?

Over half (52%) reported that they are not sitting down for a full breakfast or even calling their morning time routine "breakfast,"​ so what are they calling it instead?

According to IRI, the terms that consumers used to best describe their morning eating/drinking occasion included: mini/small breakfast (31%), 23% called it a full breakfast, 21% called it a morning snack, 17% used the term 'morning fuel up'.

"We've been talking about snacking as pervasive across the day for years, and this just validated it,"​ said Wyatt, adding that IRI also found that consumers are snacking multiple times throughout the morning.

The takeaway for brands and retailers? Optimize versatility and convenience for consumers as most are looking for a quick and easy option in the morning.

Price and affordability over premiumization

For years the predominant trend across several categories was premiumization, in which consumers allocate more of their spend to premium products, but as prices continue to rise, consumers have become acutely aware of their grocery bill and are opting for different products as a result.

IRI found that eight in ten consumers noticed food and beverage price increases over the last year with a vast majority changing their behavior as a result -- 43% are paying more attention to product prices, 33% are reducing impulse purchases, and 24% are buying more private label products.

"Right now consumers are just trying to afford the groceries that they’re buying, and premiumization has kind of taken a back seat,"​ said Wyatt. 

"Expect that some consumers will turn to private brands over the next year since a majority (66%) do not see a big difference vs. name breakfast brands."

Winning on the weekend

The weekend presents an additional opportunity for brands in the breakfast category since many consumers take advantage of the additional time they have to sit down to eat during the morning hours and have more of a full meal, said Wyatt. 

"Weekends take on a slower pace and convenience falls off just a little bit,"​ noted Wyatt.

According to IRI, 52% of consumers said they make their breakfast from scratch (vs. heat & eat and pre-packaged options) on the weekend, and 71% of consumers will sit down to eat breakfast.

"If you want to continue to find growth in breakfast, target the weekend eating occasion,"​ said Wyatt. 

Breaking through the noise

Brands in the breakfast category have the unique challenge of having to break consumers out of their typical eating patterns as 78% of consumers surveyed said they prefer to stick to the same morning food/beverages they are used to and familiar with, as opposed to 22% who said they love to experiment with new/different types of food/beverages in the mornings. 

"Because you have consumers that are buying the same bars or pancake mix over and over again, you're going to have to find a way to break through the crowd,"​ said Wyatt, who added that some particularly successful innovation in the breakfast category has centered around specific ingredients including antioxidants, plant protein, pre/probiotics, and whole grains. 

"At the end of the day, if you deliver on taste, easy-to-make, and nutrition, you’re probably going to be fine,"​ she added. 

Related topics: Industry Voices

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