Irish Breakfast Cereal Market
The Irish Breakfast Cereal Market – Stage 3 Project.
Introduction.
According to a consumption survey carried out by Kellogg’s in 2008, 97% of households purchased breakfast cereal in the ROI, placing Ireland as the largest consumer (per head) of breakfast cereal in the world. This translates into a €200 million per year market for the cereal industry. Though traditionally cereals have been consumed at breakfast time, of recent, the industry (Kellogg’s in particular) have marketed cereals as a snack food for consumption anytime during the day. (http://www.guardian.co.uk/business/2006/dec/28/food.usnews) Cereal manufacturing is a high margin-to-cost business, gross profit margins on processed cereals are 40-45%. According to analysts JP Morgan one of the biggest costs is the marketing, which on average is 20-25% of the sales value.
The market can be primarily segmented as cold and hot cereals, with 94% of the market taken by cold cereals and 6% by hot cereals.
The cold cereal market covers a broad spectrum of consumer tastes and requires milk, yogurt or fruit juice to be added for consumption. It is normally served in a bowl or dish.
The cold cereal market is at a mature stage with continuous development of brands, introduction of subbrands (such as Kellogg’s Crunchy Nut Feast), packaging design, as well as promotional offers and licensing tie ins have ensured the market stays relevant to consumers needs.
Additional nutrients and vitamins are regularly added during the production process as cereal processing often diminishes the nutritional value of the cereal, this also enables cereal manufactures to promote high in sugar products for example, children´s cereal Frosties, as a healthy product.
Research has shown that a leading branded product in one market is not always the same product in another and for example some cereals sold by Kellogg’s in Ireland contain higher percentages of sugar than in other markets in Europe.
The major players in the
Introduction.
According to a consumption survey carried out by Kellogg’s in 2008, 97% of households purchased breakfast cereal in the ROI, placing Ireland as the largest consumer (per head) of breakfast cereal in the world. This translates into a €200 million per year market for the cereal industry. Though traditionally cereals have been consumed at breakfast time, of recent, the industry (Kellogg’s in particular) have marketed cereals as a snack food for consumption anytime during the day. (http://www.guardian.co.uk/business/2006/dec/28/food.usnews) Cereal manufacturing is a high margin-to-cost business, gross profit margins on processed cereals are 40-45%. According to analysts JP Morgan one of the biggest costs is the marketing, which on average is 20-25% of the sales value.
The market can be primarily segmented as cold and hot cereals, with 94% of the market taken by cold cereals and 6% by hot cereals.
The cold cereal market covers a broad spectrum of consumer tastes and requires milk, yogurt or fruit juice to be added for consumption. It is normally served in a bowl or dish.
The cold cereal market is at a mature stage with continuous development of brands, introduction of subbrands (such as Kellogg’s Crunchy Nut Feast), packaging design, as well as promotional offers and licensing tie ins have ensured the market stays relevant to consumers needs.
Additional nutrients and vitamins are regularly added during the production process as cereal processing often diminishes the nutritional value of the cereal, this also enables cereal manufactures to promote high in sugar products for example, children´s cereal Frosties, as a healthy product.
Research has shown that a leading branded product in one market is not always the same product in another and for example some cereals sold by Kellogg’s in Ireland contain higher percentages of sugar than in other markets in Europe.
The major players in the