The rise of hot cereals and a clamour for convenience products in the morning has presented c-stores with a huge opportunity, but it’s one that not every shop is embracing yet. by Kevin Scott
Since 2005 sales of hot cereal have doubled, which given porridge was hardly a new product a decade ago highlights one of the biggest shifts in any area of convenience retail. And with breakfast now back on the increase as the message of ‘most important meal of the day’ is embraced by a new generation, retailers must ensure that their breakfast offering includes a hearty range of hot (and cold) cereal. And if a bigger clue as to the long-term health of the sector is needed, note that the country’s biggest porridge brand, Quaker, has increased production by a quarter to help meet demand. The good news for c-stores is that convenience has been identified as a major trend in breakfast this year. Matt Goddard, Head of Impulse Field Sales, PepsiCo, says: “It is important for retailers to maximise this sales opportunity by focusing on the right range of products.
Quaker has driven 66% of total hot cereal growth in convenience in the past three years but is currently only stocked by one in five independent retailers meaning they are missing out on this hot sales opportunity.” A glaring omission from too many shelves then. In fact, breakfast on the go represents a significant sales opportunity for retailers, with 3.1 billion ‘out of home’ breakfast occasions each year across the UK.
This equates to 19% of all breakfast occasions but makes up a significant 43% of breakfast spend, evidence that shoppers are willing to pay more for convenient products. Goddard says: “It is important for retailers to understand their customers and the size of the store to ensure they stock the optimum range. PepsiCo can help smaller retailers maximise the breakfast sales opportunity with the core range of Quaker products which drive the biggest profits. Larger stores can also benefit from Quaker’s wider range of formats, flavours and new products.” Among these new products are Quaker Heaps of Fruit and Quaker Multi-grain. In addition, a smaller 500g bag of Quaker Oat So Simple is now available, aimed at younger, smaller households. Hamlyns of Scotland is another firm making the most of the increased demand in hot cereals.
The company is poised to launch two new products this month, adding Porridge Pots and Single Portion Sachets, each in three flavours – Original, Golden Syrup and Mixed Berry – to their popular ranges of Scottish porridge oats and Scottish oatmeal. Hamlyns’ Managing Director, Alan Meikle says: “We’re very excited about our two new product ranges. Our NPD team has spent a lot of time perfecting the recipes, and are confident that both products really are the very best on the market.” John Kerr from The JFK Partnership, which is responsible for Hamlyns sales adds: “The reaction from the trade we have presented the products to has been very positive, with excellent feedback on both the packaging and the porridge.
The new varieties give us the opportunity to introduce the Hamlyns of Scotland brand to a new range of consumers who are looking for a more convenient product, with the same health benefits. However we know that we have a very loyal customer base, who love our products and the fact that we’re a Scottish brand. We’re confident that they will also be enthusiastic about using our new convenient products, while continuing to purchase our traditional range.”
What’s more, packaging on the rest of the Hamlyns of Scotland range will be re-designed later this year, to reflect the design of the two new ranges. In the meantime, Hamlyns have teamed up with VisitScotland, with an on-pack short-break competition on current packs of Hamlyns Scottish Porridge Oats and Scottish Oatmeal, to be followed in February by one-third extra free packs on both products. It’s not only hot cereals that are growing. Bakery at breakfast is also seeing growth. Warburtons says its performance in the breakfast sector has been driven by its Crumpets. Beyond that Warburtons also offers a range including Pancakes and Muffins – as well as its range of traditional bread.
Its latest activity will be focusing on the breakfast sector with a £3.9m investment beginning with a campaign this month aimed at inspiring families across the country to discover different pancake possibilities by encouraging them to try new flavor combinations and usage occasions. The national campaign will be supported by TV advertising, out of home billboards, PR and social media activity to generate interest and trial in Warburtons existing 6-pack Pancakes and NPD products – Chocolate Chip Cookie Pancakes and Cookie Pancakes.
Stock yogurt, sell yogurt
With yogurt being a popular product for a quick and healthy breakfast, this is another area where retailers can improve sales. The range of Mullerlight has grown of late, with sales up 10%, while Müllerlight Greek Style has just launched a Mouthwatering Mango flavour. Michael Inpong, Marketing and R&D Director at Müller Dairy UK comments: “Health continues to be a key driving factor in the breakfast category. The combination of indulgent flavours in a tasty fat free yogurt makes both Müllerlight and Müllerlight Greek Style favourites with the nation’s consumers and both are perfect to be enjoyed as part of a healthy, nutritious and indulgent breakfast.”
Despite the success of brands like Muller, the category of Chilled Yogurt & Pots Deserts (CYPD) remains under-stocked in convenience. In fact that, a staggering 43% of convenience store retailers don’t even stock yogurts or chilled pot desserts. The reasons for CYPD being a ‘must stock’ category are: Q 96% of households purchase yogurts and chilled pot dessert Q 68% of shoppers say that dairy is the ‘most important’ category when it comes to shopping in the convenience sector Q Within dairy, the CYPD is the third biggest sector after milk and cheese Q Chilled items are now the most frequently purchased category in the convenience sector – more so even than newspapers. Inpong says: “The concern over potential wastage and a perception that CYPD products “won’t sell” in stores are the main barriers to stocking. However, following a few basic rules on range, such as focusing on stocking the best sellers, adopting a disciplined approach merchandising (Order Management, Shelf Edge Strips/Shelf Barkers & Promotions etc), should enable retailers to sell stock well within the shelf-life of all Müller products.”
New pastries boost Jus-Rold range
Jus-Rol is launching two new Bake-it-Fresh products for 2014 – Apple Danish Pastries and Cinnamon Swirls. Available nationwide now, the new SKUs will join the existing range of Croissant and Pain au Chocolat lines from the General Mills brand and will allow shoppers to bake a complete range of fresh pastries for the at-home breakfast occasion. The Apple Danish Pastry is available in 320g packs of six, with an rrp of £2.10, while the Cinnamon Swirl with glaze SKU is available in packs of six, with an rrp of £2.10.
Nutella commits to further investment
This year, Ferrero, maker of Nutella chocolate spread, is focusing on adding value to the spreads category which includes investments such as our latest TV campaign. Nutella has the highest media spend in the spreads category and Ferrero says it is committed to increasing this investment even further over the next year to support its ambitious growth strategy. All three formats in the Nutella range (200g, 400g and 750g) are ranked in the top 10 selling SKUs, with the 400g pack the leading spread SKU. Currently, 74% of Nutella consumption occurs at the breakfast occasion but nutella also taps into a number of different eating occasions such as Pancake Day, snacking, and desserts.
New cereal keeps consumers going
A new low-GI cereal has been launched by Freedom Cereals. Keep Me Going also claims to be low in fat, salt and sugar. Consisting of whole-grain barley and oat pillows, Keep Me Going has a GI (Glycaemic Index) of just 50. Including low-GI foods in your diet can help you to feel fuller for longer, reducing the temptation to eat between meals and thereby helping people who are trying to control or lose weight.
