Industry Insights

2021 Trends in Cereal Category – Keto Cereal Niche Players

2021 Trends in Cereal Category – Keto Cereal Niche Players

Across the grocery aisle, niche brands that are eCommerce savvy and heavily focused on data analytics are troubling larger, conventional brands by identifying new areas of opportunities far quicker. While big brands struggle to keep up, the nimbleness of niche players allows them to spot and act on trends in a matter of months—not years.

With the stay-at-home lifestyle now exceeding over a year, research shows the average person gains nearly one pound per month during lockdown-driven home isolation. As a result, consumers are increasingly switching to weight conscientious diets, with the ketogenic diet (“keto”) being among the forefront. The diet requires eating very low amounts of carbohydrates and high amounts of natural fats, to spur a body’s fat-burning process known as “ketosis.”

Consumer interest in the keto diet has grown 8X since the start of 2017 across the United States, according to Simporter data. With consumers on the lookout for quick weight loss strategies, major Consumer Packaged Goods (“CPG”) brands are stepping up to the plate to provide keto-friendly, low carb alternatives to traditionally high carb foods.

8X

Consumer Interest in Keto

2017 —> 2021

Current State of Cereal Brands

Kellogg’s, General Mills, and Post Holdings have traditionally controlled the cereal aisle, boasting the top 10 brands in category for years. While other major players like Nestle have entered, they still have not penetrated the top 10. Intriguingly, Simporter data shows that a majority of the top 10 cereal brands target children and teenagers, such as Lucky Charms, Froot Loops, and Reese’s Puffs.

*Blue Rows mean the brands target Children & Teenagers.

RankBrandConsumer Interest Score
1Cheerios47
2Lucky Charms29
3Froot Loops23
4Special K15
5Captain Crunch15
6Frosted Flakes14
7Raisin Bran12
8Cinnamon Toast Crunch8
9Reese’s Puffs7
10Mini-Wheats6

Parents often buy cereal as an easy breakfast routine that their children will enjoy. With flavor and aesthetic as the focus of these brands, children and teenagers enjoy the quick to make meal. Typically, these cereals contain high amounts of sugar, vibrant colors, and friendly characters on the box. Beyond convenience, the long shelf life and low price entry point means virtually every child has tasted one of these cereals at some point in their life.

The Growth of Keto Cereals among cereal brands

Consumer interest has grown 1.6X in the past year forketo cereals. Compared to similar topics in the cereal category, consumer interest in keto cereal has grown 2.9X quicker than vegan cereals, 8.3X quicker than natural cereals, and 2.2X quicker than organic cereals in just the past year.

As a result, major manufacturers have branched out and begun developing keto-friendly cereals for people on the ketogenic diet. Accordingly, Kellogg’s launched Kashi’s Go Cereal and General Mills debuted Wonderworks Keto Friendly Cereal.pasted-image.tiff

The Opportunity: Youth Focused Keto Cereals

Children and teenagers are skipped by big brand keto-friendly cereal options. Whether the packaging is dull, flavors are plain, or mascots are missing—Kellogg’s and General Mills have missed the boat so far in meeting the younger demographic’s needs for keto-friendly cereal.

Consumers under the age of 21 are the largest demographic of cereals. With parents as the gatekeepers of grocery, when scanning an aisle, a keto parent is increasingly likely to pick out a fun, health alternative to the typical sugary cereal. As a result, children’s keto cereals are growing rapidly — without major brands yet stepping in.

Niche players like Magic Spoon and Snack House are leading the category, creating keto cereals for kids that are colorful, feature fun characters, and promoted as a family snack.

Takeaway

The latest trends in cereal range from low sugar alternatives, convenience-focused snack bars, high protein, and, now, keto-friendly. Today, major brands’ keto strategies focus on adult cereals, ignoring children and teenagers whose parents are on the diet. Niche brands, however, are grasping the larger opportunity in the cereal category, creating keto-friendly cereals for the youth demographic. Companies like Kellogg’s, Post Foods, and General Mills should take note, as keto friendly cereal becomes one of the quickest growing cereal segments in decades.

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