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Global Breakfast & Cereal Industry

Part of the world cereal product business, the breakfast & cereal industry was worth $28 billion in 2010, having recorded close to 4% yearly growth for the four preceding years, reports MarketLine. Ready-to-eat cereals represented the leading market segment, generating almost $24.5 billion in 2010 to account for more than 87% of the overall market in terms of value. Market growth is expected to accelerate to exceed a yearly rate of 4% between 2010 and 2015, when it should generate more than $34 billion.

Growth in the global breakfast cereal market is being fuelled by changing lifestyles, consumer awareness regarding the importance of healthy eating habits and evolving food consumption patterns, reports Global Industry Analysts. Due to increased focus on the benefits of a healthy diet, cereal manufacturers are producing more organic and specialty food products. Breakfast cereals provide a varied, inexpensive and convenient source of nutrition, helping to build a multi-billion dollar global industry. Their manufacture involves processing raw materials such as rice, sugar, flour, wheat, corn and malt extract into ready-to-eat cereals, cereal bars and hot cereals, reports Ibis World. The finished cereal products are sold to retailers, food service providers and grocery wholesalers.

Regional Market Share

The global breakfast cereal market is led by the US, the UK, France, Spain, Italy and Russia, with these countries both producing and consuming the largest volume of cereals, according to research from Global Industry Analysts. Around 35% of the global population buys cereal products, mostly in the US and the EU. Demand in these regions is driven by rising awareness as to the health benefits involved in including these products as part of a healthy diet. Cereal products are also proving a popular snack choice as an alternative to less-healthy options like chocolate amid rising concern regarding diseases such as diabetes and heart disease.

The Asian market is recording increased demand as consumers follow western eating habits, influenced by healthy eating campaigns in countries such as the UK, the US and Germany. Alternatives to breakfast cereals, like cereal bars and convenience cereals, have been encroaching on the breakfast cereals market over recent years.

According to Business Insights, the EU represents the leading regional market for bakery and cereals. The market is expected to record close to 2.5% yearly growth to generate sales of $185 billion in 2013. With the majority of EU consumers including bread as part of a staple diet, demand for baked goods continues to rise.

In the EU, evolving health claim regulation is likely to prove an obstacle to the expansion of the functional bakery and cereals products market. Manufacturers are paying increasing attention to limiting potentially harmful ingredients like sugar, sodium and fat. Companies are taking consumer eating habits into account, offering a range of baked and cereal products free of trans fats, or fortifying products with nutritious ingredients including whole grains, and limiting the calorie count of products and selling calorie-counted portion packs.

Breakfast & Cereal Industry Trends

Breakfast cereals have long been popular for their convenience. The market is now competing with alternative products like cereal bars and on-the-go-eat cereals, packaged for even greater convenience and not requiring consumers to add milk. The cereal market is facing challenges in the form of rising energy and commodity prices, market maturity and saturation in developed nations, concern over ingredients such as acrylamide and gluten, and changing consumer eating habits as a result of increasing emphasis on healthy eating, reports Global Industry Analysts.

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