The consumption pattern of breakfast options have evolved over the years. While classics like poha, upma, and idlis maintain their popularity, the emergence of innovative alternatives like muesli and granola has reshaped the conventional breakfast market. The demand for convenience and variety is palpable, driving the proliferation of prepared breakfast foods across both traditional and specialty markets.
Changing Consumer Preferences in the Breakfast Category
These days, it’s an all-day way of eating, as people spoon cereal, toss a muffin into a backpack, pick up an egg-cheese and veggie burrito, or crank up the juicer at virtually any time. The all-hour drive for convenience and the concurrent clamor for choice is evident in the expansion of prepared breakfast foods in many traditional and specialty markets.
“Generation Z, Generation Alpha, and to a certain extent Millennials are reshaping the food landscape, particularly within the breakfast category, through a phenomenon known as ‘snackification.’ Driven by time constraints and a preference for on-the-go consumption, these cohorts are transforming traditional breakfast meals into convenient and portable snacks or accompaniments. Embracing a culture of frequent eating, they are seeking out healthier options such as quinoa puffs to satisfy their snacking needs,” points out Sameer Shaikh, Regional Head – Buying & Merchandising, bigbasket.com.
As per a report by Euromonitor, the consumption patterns of breakfast cereals have evolved beyond traditional breakfast hours, with consumers increasingly incorporating these products into their daily routines and snack choices. High versatility makes breakfast cereals ideal snacks, with manufacturers promoting muesli and granola not only for meals but also for direct consumption as snacks.
Consumers have started to consume muesli and granola as snacks, replacing fried savory alternatives. Muesli and granola are also being used as ingredients to prepare snack bars at home. Hot cereals like oats are being used to make many traditional Indian dishes like poha and idli, rather than conventional porridge. Owing to such multi-purpose uses, hot cereals, muesli, and granola continue to see faster growth compared to other breakfast cereals.
The report emphasizes that consumers are gradually moving towards hot cereals, muesli, and granola from flakes as they have started to realize the health benefits of the former. Consequently, retail value growth within flakes has been registering lower growth than for other breakfast cereals.
Flakes have high sugar content and are fried, thus making them unhealthy options for consumers who eat breakfast cereals regularly. It is expected that retail value growth within flakes will decline further going forward as consumers move towards healthier options in breakfast cereals. In response to growth opportunities in hot cereals, granola, and muesli, breakfast cereal manufacturers like Kellogg India have been introducing new flavors in flakes to promote sales. Smaller pack sizes, affordable pricing, trail packs, and attractive packaging are some of the strategies that will be used by manufacturers to promote sales of flakes.
Shaikh says that the era of the pandemic has underscored the importance of prioritizing health and wellness. As a result, there has been a significant shift in breakfast trends, with a move away from calorie-dense foods towards options that are lower in carbohydrates and fats. This shift has led to an influx of ‘ready-to-eat’ products tailored to meet the preferences of younger generations, prompting both established traditional brands and newcomers to enter this segment, with a particular focus on the frozen category.
“While traditional breakfast staples such as poha, upma, and idlis remain popular choices, the introduction of innovative alternatives like muesli and granola has disrupted the traditional cereal market. Additionally, alongside cereals, there has been a notable increase in the consumption of instant noodles, with a concurrent trend towards healthier alternatives such as energy bars,” points out Shaikh.
Consumption trends such as the ongoing growth of organic products and clean labeling, along with more “free-from” claims and “flexitarian” options are becoming ever-more popular as are trending bakery ingredients like functional flour and sprouted grains. Indeed, better-for-you options are on point right now for a variety of breakfast foods. The fact that many traditional breakfast foods are high in protein bodes well for these types of products.
Products like dark chocolate and granola, which are good sources of fiber, are finding higher consumer responsiveness and acceptance. Beyond the big companies, brands newer to the cereal industry are shaking things up with better-for-you options by offering products that are 100 percent organic, non-GMO, and come with a host of other health attributes. In addition to cereals, and other recent product launches support the idea that better-for-you breakfast foods are in shoppers’ sights across a variety of product types.
Rising demand for better-for-you foods — and the evolving definition of “better” — is evident in the breakfast sector. Many breakfast food companies are responding with new products and promotions geared toward better-for-you breakfast choices. The push for healthier eating has prompted cereal companies to focus on nutrients, which is what people are looking for in breakfast.
Cereal makers are introducing new varieties with no artificial flavors, no colors from artificial sources, or high-fructose corn syrup to bring movement to their brands. They are also offering a large variety of breakfast cereals in different flavors like tangy tomato, curry & spice, etc., to suit the taste of consumers, which is expected to fuel growth in the Indian breakfast cereal market over the coming years.
Innovations in the Category
Food innovations play a pivotal role in ensuring the continued relevance and dynamism of the market, particularly by addressing issues related to safety and security. Within the food industry, innovation serves to enhance efficiency and productivity, with advancements such as the integration of artificial intelligence (AI) for food safety management leading the charge.
“These innovative solutions not only mitigate risks but also optimize processes, thereby safeguarding consumer well-being while driving industry progress,” says Biyas Roy, Executive Director, Arambagh Foodmart adding that in the muesli and oats category, lots of new and yummy varieties have come up. “The introduction of zipper packs has prompted the purchase of bigger packs. Various types of cross-promos are making things exciting in this category. Recognizing the importance of catering to the evolving tastes and preferences of the younger demographic, companies are strategically gravitating toward the Ready-to-Eat (RTE) and Ready-to-Cook (RTC) categories to engage with newer generations. By establishing a presence in these segments, they aim to cultivate brand loyalty among this demographic, recognizing that capturing their interest early may translate into long-term patronage as they progress into earning members and establishing families of their own.
According to Mintel estimates, India is one of the leading countries where hot breakfast cereals make up a large share of the total cereal market. There exists an opportunity for brands to promote hot breakfast options that are in line with Indian taste buds. To capitalize on the trend, Nestlé launched a cereal called NesPlus made from better-for-you grains, such as oats and jowar. Interestingly, it emphasizes on the pack that it can be consumed with warm milk and will maintain its crunchy texture. Manufacturers, on their part, need to keep reinventing their cereal offerings by continuously rolling out new products and remaking old ones through new flavors, line extensions, premiums, websites, and flavor and nutritional enhancements that appeal to kids and their moms, youth, and adults.
The breakfast cereal market offers a diverse array of options, particularly in multi-grain and multi-millet varieties. Enriched with essential nutrients, including vitamins and minerals, these cereals cater to children’s preferences with enticing flavors like chocolate, strawberry, and vanilla. By presenting millets in familiar formats such as flakes, we aim to encourage children to incorporate healthier choices into their diets,” says V.P. Kannan, Chief Operating Officer, Rebala Nutri Foodee Pvt Ltd, a B2B contract manufacturer specializing in private label production for reputed food brands such as Too Yumm, Sluurp Farm, Bigbasket, and numerous others.
He adds, “We see the breakfast cereal market as a gateway to promoting healthier eating habits among families. Through our innovative offerings, we aim to provide nutritious alternatives to traditional cereals. By introducing multi-grain and multi-millet variations, enriched with vital nutrients, and offering a range of appealing flavors, we seek to make healthy eating more accessible and enjoyable for children. By seamlessly integrating millets into breakfast routines, we believe we can facilitate positive lifestyle changes and foster a culture of wellness.”
A growing percentage of consumers today are limiting their carb intake, but finding foods that taste good and offer variety in their diets is challenging. Manufacturers can respond to this challenge by introducing breakfast cereals that give consumers a good-tasting, wholesome option for a low-carb lifestyle, and that also help them get important nutrients they may be missing with popular low-carb diets.
“We’ve just launched instant Millet noodles, inspired by the success of well-known brands like Maggie. These noodles contain a significant portion — 40 to 60% — of millet, offering a nutritious twist on a beloved classic. By incorporating whole wheat atta, our product not only offers nutritional benefits but also appeals to a broader audience. This move reflects a growing trend towards incorporating millet into daily diets, with consumers increasingly recognizing their health benefits. In the past, noodles were primarily made with refined atta, but as awareness of healthier options like oats and millets has increased, consumers are now eager to incorporate millets into their noodle consumption, thereby driving demand for our product,” says Kannan.
Whether from the big brands or specialty manufacturers, the low-carb choices for cereal buyers keep growing, and herein lies an opportunity to market cereal products as ‘high-fiber,’ ‘high protein,’ or ‘low-carb.’ However, it is important that manufacturers have a strong baseline of products, keep introducing new products, and a package redesign. Products that offer consumers healthy, delicious options made from wholesome, natural ingredients catch on faster.
The packaged breakfast foods market is seeing a move from international offerings, like cold cereal, to more traditional breakfast options such as upma, poha, suji halwa, among others. Big players in this category include MTR Foods, Quaker Nutri Foods, and Nestlé. “Brands such as ITC have ventured into the ready-to-cook category in recent years, introducing a range of convenient offerings including idli sambhar, upma, instant poha, instant suji halwa, and instant dosa mixes. Similarly, MTR and Gits have already established themselves in this domain. Leveraging their extensive presence and deep-rooted understanding of consumption behaviors, palate preferences, and taste profiles across India, these companies are strategically aligning their offerings to resonate with the preferences of the younger audience,” says Shaikh.
The discerning preferences of consumers for healthier alternatives serve as a catalyst for food business owners to proactively explore and develop more nutritionally-conscious offerings. Annually, the food industry diligently pursues avenues to enhance the convenience and productivity of both consumers and business proprietors alike. For instance, in July 2022, Tata Consumer Products launched Tata Soulfull Masala Oats + made with wholegrain oats and traditional Indian millets like Navane and Jowar
Constant innovation by companies and the mushrooming of startups are increasing the market size of the breakfast cereal category. This commitment to innovation has been underscored by a multitude of advancements witnessed in recent years, particularly in response to the globalization of food markets.
Mintel research points to the opportunity for portable and on-the-go products, as well as the potential for advertising campaigns that address out-of-home consumption. As consumers are looking for food options that can be eaten on the go, opportunities exist for innovations in packaging and food formats that allow for single-hand consumption. Brands like Soulfull have quickly identified this need by launching an on-the-go smoothie that claims to provide a combination of cereals and protein.
To summarize, Generations Z and Alpha, alongside Millennials, are reshaping breakfast trends opting for convenient and healthier options. Euromonitor reports a shift in breakfast cereal consumption beyond traditional hours, with muesli and granola gaining popularity as snacks and ingredients in homemade bars. Hot cereals like oats are replacing flakes due to perceived health benefits, prompting manufacturers to introduce new flavors and smaller pack sizes. The pandemic has accelerated a shift towards healthier breakfast options, leading to an influx of “ready-to-eat” products and a focus on health attributes like organic, non-GMO, and high fiber content.
Traditional breakfast options are also gaining popularity, with brands venturing into ready-to-cook categories. Startups and established players contribute to market growth through constant innovation, meeting consumer needs for portable and on-the-go products. Companies are aligning their offerings with consumer preferences, leveraging their understanding of consumption behaviors and taste profiles. This approach aims to fuel growth in the Indian breakfast cereal market by catering to the changing consumer tastes and preferences of the target segment.
