I am, apparently, becoming a rare breed. We may be witnessing the end of cold cereal. Sales of cereal fell almost 3% in the last year. Still a handsome $6 billion market but a dwindling one, since those results have echoed declines in the last four years and are a far cry from the 1980s, when profits were 17% of sales and revenues were climbing. Oddly, the recent recession, which should make people flock to lower-priced alternatives, has not done so for cereal.
Instead, people love bagels. People love Pop-Tarts. People love McMuffins. They love cereal less and less despite it being healthier.
Part of it is likely due to health mullahs in the government and culture who want to make cartoon characters for cereals something only possible in Abu-Gharaib. They really seem to think Tony The Tiger is making kids fat and not the processed junk kids eat the rest of the day. Go-Gurt? Seriously? And you are an idiot if you think you are making healthier kids with individually packaged rolls of cheese in their lunches. Calories matter and those are way up, while the war on carbohydrates has sent those calories way down.
Last week we slapped around Big Sugar for fomenting an anti-science culture war against High Fructose Corn Syrup (see Does Corn Sugar Make You Fatter Than Sucrose?), alleging that their bleached white sucrose is somehow awesome for people and HFCS isn't. Today I have to defend sucrose a little. All the health mullahs have done by engaging in an ill-conceived and anti-scientific war on sugary cereals is promote higher calorie foods like fast-food breakfast sandwiches. There is no actual benefit to kids being won by knocking down sugar calories (10% drop since 1999) and boosting fat ones. Kids and adults have gotten fatter while consuming less sugar.
Since the War on Toucan Sam has not worked in making fat kids less fat, so-called nutritionists want to ban Ronald McDonald too. Really, they would have to ban spoons to keep some people from getting fat.
It isn't just sugary cereals in decline, though. A relatively harmless and therefore comparatively good for you product like Kellogg's Corn Flakes is also doing poorly. The reason, it seems to be, is that the 'organic' food people spend a ton of money on marketing and it seems to work. Any time we mention that organic is just a process, and not a great one (see Like E. Coli? Enjoy Organic Food) people educated by advertising go into apoplectic fits and insist we are shills for Big Farming, or whatever they call it, but the idea that some 'organic' round cereal that floats is superior to Cheerios is silly. So organic corn flakes - whatever that means - can be more expensive than corn flakes and still outsell them because some people have too much money.
Price can't be totally discounted and there is a squeeze on the other end. For people who are not buying McMuffin's or organic nonsense (and so, are actually smarter), store labels for cereal are the way to go. I never buy Post Raisin Bran, I buy a store label because I know they did not build a special factory to make their own Raisin Bran, they are using an existing cereal factory and if the ingredients are different ("two scoops or raisins!" is not a selling point to me) I can't tell. In a difficult economy, it may matter to many, but even in a good economy I don't like paying $2 more for the same box of cereal.
The decline in cereal may explain why Big Sugar is in a panic about HFCS; their market is dwindling so they might want to get back into Pepsi and soft drinks because some people must read labels or they wouldn't be down on sugary cereal; Kellogg's Corn Pops has 117 calories and 15 grams of sugar in a half cup. Come on, that is not healthy. No one reads labels on Coke cans, though.
If cereals continue to collapse, milk and sugar will follow - the tables have turned on low-fat fads and society is squarely low-carbohydrate now. If Big Sugar wants to get into a culture war, they should stop confusing people with how one type of sugar is less healthy than their unhealthy bleached white sugar and go after junk diets that discourage people from eating in moderation; while including carbohydrates.
(1) Not so on weekends. I make eggs and grits along with some sort of breakfast meat and pancakes, if the wife prepares them. Toast if I have my homemade jelly - I don't eat store bought jelly. I read the paper, I make coffee in one of my 14 coffee makers, life is good.
When I do make my own jelly, though, I use sucrose. Big Sugar wins there.