Industry Snapshot

In the early 2000s breakfast cereal makers were facing stagnant, if not declining, sales. Gone are the days of the family breakfast, of which a bowl of cereal was standard fare. The fast-paced American lifestyle has more and more consumers eating breakfast on the go. Quick serve restaurants like McDonald's, ready-to-eat breakfast bars, bagels, and muffins offer consumers less labor-intensive alternatives to cereal. Although the value of product shipped by cereal manufacturers grew from $9.1 billion in 1997 to $11.4 billion in 2001, increased revenues came primarily from price hikes rather than market growth.

Consumer awareness of health and nutrition also played a major part in shaping the industry in recent years. Cereal manufacturers began to tout the benefits of eating breakfast cereal right on the package—vitamin-fortified, low in fat, and a good source of fiber. Another trend, begun in the 1990s and picking up steam in the 2000s, is adding dehydrated whole fruits to cereal, which provides color, flavor, and nutritional value. Yet touting health benefits to adults and marketing film characters to children have not been sufficient to reinvigorate this mature industry.