The breakfast cereal segment in India is expected to grow to Rs 2,610 crore by 2020, as per estimates by research firm Euromonitor International
Written By Priyanka Golikeri
Nestle India is the newest brand to dish out a cup of breakfast cereals. The Swiss multinational company has rolled out Nesplus, a range of cereals made from oats and traditional Indian cereals like rice, wheat and jowar, with flavours to entice Indian taste-buds.
This move by Nestle to enter the ready-to-eat (RTE) breakfast segment which primarily consists of cereals rolled into cornflakes, wheat flakes and muesli reflects the shifting behaviour of the millennial consumer and the increasing acceptance of the market towards a packet of cereals as a breakfast option.
Experts say like the ready-to-cook (RTC) breakfast options such as upma/poha mixes and idli/dosa batters, breakfast cereals is gaining popularity as a niche category for it is positioned under the segment that requires absolutely no cooking.
“Since it is about simply pouring the cereals in a cup, adding milk and consuming, the convenience factor rides high. Working professionals, especially those under 30-35 years who are low on time and cooking skills, tend to focus more on work and leisure, and are driven to breakfast cereals,” says Devangshu Dutta from consulting firm Third Eyesight.
The breakfast cereal segment in India is expected to grow to Rs 2,610 crore by 2020, as per estimates by research firm Euromonitor International.
Kellog’s, the first entrant into this segment way back in 1994, dominates breakfast cereals with a 37% share. PepsiCo India, Dr.Oetkers and Bagrry’s are the other notable brands in breakfast cereals.
Although the number of known brands per se is still limited, experts say for a new entrant to make a mark, the positioning and marketing has to be crafted intelligently since the Indian palate overall is still greatly focused on traditional Indian breakfasts and their RTC options.
“Our internal data records sourced from over 150 million food logs show that overall breakfast is the unhealthiest meal of the day with least protein consumption. Cereals account for around 4% of our users’ breakfast logs with traditional breakfast constituting 16%. The remainder consists of bread, beverages, etc., Idli, dosa, upma are greatly popular than cereals,” says Tushar Vashisht, co-founder and CEO, HealthifyMe, a health and fitness app.
In such a scenario, say experts, brands should be clever enough while positioning their product and should refrain from ruffling traditional mindsets by reiterating that their bag of cereals is far healthier and more nutritious than Indian home-made breakfasts. “Brands should position their cereals as a breakfast option high on the convenience and fun factors, while also being healthy. The fact that Nestle has utilised jowar, wheat and rice which is typically eaten in any Indian household, works in their favour,” say experts. Nestle has emphasised that their cereals remain crunchy even in warm milk, which experts say is another attempt by the brand to appeal to Indian consumers who prefer warm milk and hot breakfasts over cold options. “For brands, cereal is a dynamic market with a niche consumer segment. Cereals need to be viewed as a separate breakfast category, aside from RTC mixes and batters that cater to a segment slightly older than millennials. For millennials, anything requiring cooking and spending time in the kitchen, which includes RTC mixes and batters, can become a friction point,” says Dutta.
Hello Green, a brand of healthy meal packs, is introducing RTE steel-cut oats that would require mere pouring of hot water and no cooking. “Millennials will consume options like oatmeal when the delivery mechanisms and flavours appeal to them. Ready-to-eat oats with skimmed milk powder in various flavours can make a super-fast and easy breakfast option. The millennial time conserving habits will play a role in this breakfast cereal category,” says Sunjay Ghai, CEO, Hello Green by Revofit.
However, certain experts feel that irrespective of millennial consumption patterns, breakfast cereals will only be used as a substitute to mainstream Indian traditional breakfasts. Kartik Singhal, VP-Sales, Sattviko, which is into sattvik foods, says cereals cannot be enjoyed on a regular basis. “In general, RTC mixes and batters will continue to hold an edge over breakfast cereals. Moreover, the traditional Indian breakfast will be always preferred since it is preservative free.”