News highlights, market trends, and original data analysis related to the U.S. retail food & beverage industry … by Jay Nargundkar

GMO-Free Can’t Slow Cheerios’ Decline

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In early January, General Mills made headlines for announcing that Cheerios would now be produced without the use of genetically-modified ingredients (GMOs). Although only the “original” line was affected (i.e., not Honey Nut Cheerios and other popular varieties), and the switch was relatively minor (the only GM-ingredients prior were a small amount of corn starch and one gram of sugar), the move received substantial press coverage. Many people wondered if this would be the “domino” that would lead to many other mainstream products adopting a GMO-free ingredient policy.

Other potential benefits aside, General Mills hasn’t seen financial dividends for making a switch. Nielsen data suggests original Cheerios sales declined nearly 8% in the first-quarter of this year compared to Q1 2013, continuing a downward slide of recent years. Overall cereal sales have been losing share to morning alternatives, especially protein-heavy options like breakfast sandwiches and Greek yogurt. Cheerios remains the #4 best-selling cereal in America, while its Honey Nut cousin is #1.

Cheerios Q1 sales by Year:

2014: $82.0M
2013: $88.9M
2012: $92.7M
2011: $94.6M
2010: $100.5M

Source: Nielsen Scan Market xAOC

The ready-to-eat cereal category as a whole has posted consecutive years of slight declines in total sales dollars, from a high of $9.5B in 2011 to $9.2B last year. Over that time period, the still far-smaller yogurt, “breakfast meat”, and “frozen breakfast sandwich” sales are up 21%, 24%, and 38%, respectively.



This entry was posted on April 23, 2014 by in Natural & Organic, Products and tagged , , , .

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