Article written by Rahul Ashok, (Senior Consultant, Datamonitor), published in Progressive Grocer, July 2011

1. M A R K E T
I N S I G H T
Breakfast-er
than ever
before
Quest for a quick and healthy meal is fast
transforming the Indian breakfast menu
A
By Rahul Ashok
How manufacturers can look at Over the last few years, it has
n American author, Adelle Davis once juggling the consumers’ demand for been amply discussed in various me-
taste, nutrition and convenience, is dia, that parathas and idlis on the
said, “Eat breakfast like a king, lunch what has become one of the most breakfast table have slowly given
like a prince, and dinner like a pau- hurried meals of the day. With way to a new dietary system, which
longer commutes, more distractions is skewed towards partially processed
per”. Although there is much truth in in the morning owing to a highly- and packaged foods. While break-
this statement, the underlying impor- connected lifestyle, and rising social- fast cereals undoubtedly account
professional pressures, breakfast is for a lion’s share of this transforma-
tance seldom seems to have been realised by the one meal that seems to be a soft-tar- tion, there are other contenders such
average Indians. get for dietary modifications. as cereal bars, oats, etc., which are
26 • PROGRESSIVE GROCER • July 2011 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM

2. Kellogg’s special K
specifically targeted
at women, and
delivering the
proposition of weight
management, was a
first in the category.
for effective sustained growth in the A call for more focused
years to come. Kellogg’s journey of health management
setting up the market in India, from
a time when Mohan Meakin’s was Cornflakes as a category had a
pretty much the only cornflakes rather generic positioning in In-
brand in the country, has enough dia even until the year 2000, where
examples to stand testimony to the brands usually talked to the family
concern expressed by many, in terms as a whole. While Kellogg’s struggled
of varying and indefinite consumer with various flavor concepts given
attitudes towards the segment. the fact that many an average Indian
fast-emerging to be considered as se- close on the heels of India, that too, In the following sections, we will was not ready to incorporate cere-
rious enough options by consumers, with a CAGR of 18 percent. delve into some trends, not only in als into the regular dietary intake. It
as alternatives for a breakfast. Despite the ample optimism the breakfast cereals space, but also was the positioning of “helping to
coming from these statistics and categories such as, cereal bars, oats enhance mental concentration”, and
One of the fastest growing forecasted growth rates, what re- and pseudo-breakfast concepts that “Iron Shakti”, that helped change
CPG categories in India mains an area of debate and concern are being tailored into products from fortune of the brand.
among many companies, is whether categories such as juices, as well. On Given that there were very few
After overcoming initial hurdles the impetus for breakfast cereals the basis of these observations, we brands in the market, this category
in getting India as a nation to accept have built-up for a dietary transition would look at some opportunities positioning stayed, until the launch
the concept of breakfast cereals into and whether it is backbone-enough that are emerging in this space. of Kellogg’s special K. This brand,
the fold, the growth of breakfast ce- specifically targeted at women,
reals is a story to be told. Even when Figure 1: The breakfast cereals market in India is and delivering the proposition of
one looks at a snapshot of the last five expected to heat-up even further over the next five weight management, was a first in
years, the market for breakfast cere- years, with a forecasted growth rate of almost 24% the category. Although the brand
als in India has grown from $2.84bn was worth more than billion dol-
in 2006 to over $6bn by 2010, at a lars globally, the launch in India was
CAGR of 21 percent. lifestyle needs only in 2008. This was surprising,
14.07
and marketers’ interventions are ex- considering the fact that obesity and
pected to impact the growth further, weight management has been a cause
and the market is expected to cross for concern in India for long, and
%
24
$14bn by 2014. has seen much activity as a concept
R
AG
looking at this from the context for the last decade through various
C
of Asian countries where there has
%
product and service streams. Given
21
6.04
been a long-standing tradition of that the health and wellness wave in
R
AG
various indigenous breakfast foods India has manifested across various
C
and concepts, India has been the 2.84 product categories, through various
fastest growing market over the pe- benefit platforms, breakfast cereals
riod 2006-10, at a CAGR of almost 2006 2010 2014 as a category seems to be sometimes
21 percent. In terms of absolute Note: Figures iN iNr billioN
challenged by a “too little, too late”
growth rates, only Pakistan comes phenomenon.
WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT July 2011 • PROGRESSIVE GROCER • 27

3. The companies Figure 2: Among the five fastest growing breakfast
should educate the cereals market in Asia from 2006-10, India tops the
chart, with a CAGR of almost 21%
consumers through 350
more focused 300
Market value in $bn
campaigns on mass
250
200
media. 150
100
50
0
2006 2007 2008 2009 2010 2011 2012 2013 2014
India Pakistan Singapore Republic of Korea China
of muesli and/or oats, each having consume breakfast cereals, but are
Taking for instance the case of have not sufficiently leveraged upon different flavor combinations and not familiar with the concept or ben-
biscuits, brands in this space have it to talk to specific consumer groups. ingredient modifications (trans-fat efits of a product like muesli.
evolved from being associated with Given that the hectic lifestyle of In- free, zero cholesterol, sugar free, One can recall scores of regional
just tea-time consumption, to be dians is sapping their energy levels fiber-rich, etc.). These brands have and smaller players, such as Good
considered seriously enough by those further, and testing their immune solely relied on the strength of their Earth muesli and even private label
wanting to “have a health snack”, or systems to the limits, there are ample distribution, and in-store communi- brands from Future Group, which
those wanting to manage health con- opportunities for brands to deliver cation to build the brand, without have launched breakfast cereals, but
cerns such as diabetes or cholesterol. product concepts on all these fronts, resorting to extensive campaigns on have failed to see the traction one
At each juncture, brands have sup- and not only disease redressal as in other media channels. can expect from a market like India.
ported major ingredient modifica- the case of diabetes, obesity, etc. It is interesting to note that al- Although these brands have helped
tions with sufficient product litera- though these brand has been success- expand the market for such prod-
ture and marketing, to educate the Cereals++, but do people ful in terms of formulating products ucts, there still remains a need for
consumers. know? that are aligned with the lifestyles companies to educate the consumers
Breakfast cereals, including oats and needs of Indian consumers, through more focused campaigns on
and muesli, in spite of having an in- Over the last few years, India- the awareness levels regarding the mass media, as was done in the case
herent advantage of being healthy by based players such as Baggry’s and products (apart from cornflakes), of Quaker oats, with their extensive
virtue of the basic formulation, but Good Earth have launched varieties are still very low. There are so many heart-related communication fol-
households in India, where they do lowing the launch of the brand.
28 • PROGRESSIVE GROCER • July 2011 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM

4. inherent preference for warm
breakfast-concepts among In- The hot cereals
dians, what Kellogg’s fought
against for more than a decade. market, which
The fact that oats as a cat-
egory has come to be strongly accounted for 23
associated with heart health, is
percent of the overall
market as of 2006, is
certainly a marketing win, but
to grow sales further, compa-
expected to reach 25
nies need to innovate with re-
spect to product delivery plat-
percent by 2014.
forms. More so, considering
the fact that oats has reached
a stage where it is considered a
super-ingredient (such as aloe
vera in the case of personal
care products), and is being
used across product categories
such as biscuits, health drinks,
bread, etc. So oats as a breakfast
Sailing in the same oat concept, if it fails to sustain the in-
terest of consumers, might give way relevance of a consumption occasion that much harder to be preferred
Although the concept of eating to possible intake through other and benefit, into the consumers’ life- over other alternatives.
oats as a healthier alternative has been product formats. styles. Such has been the increase in To achieve this, the strategy has
in existence for ages in India, it was This in itself could also be turned the incidence of skipped breakfast to be two-pronged. Firstly, the avail-
more popular among slightly older into an opportunity, as was indirectly meals and the desire for on-the-go/ ability of these products should
consumers, who were usually con- done in the case of Kellogg’s, which out-of-home consumption, that in- move beyond the walls of modern
suming it out of unavoidable health positioned cornflakes as a healthy spite of the fact that cereal bars went trade outlets (which still remain the
concerns. From such a positioning, snack in smaller pack sizes. Or take main-stream in the country as late as key distribution channel), and en-
Oats as a category has evolved to be the case of Kissan jams which have 2006, the category has grown from sure that there is product presence
perceived even by relatively younger recently come out with a campaign just INR 71m then to INR 355m in and communication at other retail
consumers to be a healthy way to that says Kissan jams can be enjoyed 2010, which is at a whopping CAGR outlets, so that a potential target au-
start their day. This transition can be even in the form of lassi (yoghurt of 49 percent! dience is not lost out at touch points
largely attributed to the marketing drinks). Such adjacencies could Domestic brands such as Rite- such as, schools, colleges, workplac-
efforts of Quaker in India. prove worthy product line exten- Bite have played a very vital role es, gyms, etc.
The market for oats is much sions for major cereal manufacturers in growing the category, through Also, the category needs to move
smaller compared to breakfast cere- in the years to come. GTM strategies involving careful away from the proposition of solely
als, and valued at INR 1.2bn as of channel selection, and targeted for- talking about “concentrated and con-
2010, but the hot cereals market, No bar to cereal bar mulation concepts. But there still venient nutrition”. All the brands
which accounted for 23 percent of remains an uphill task, of retaining available in the market, such as Hor-
the overall market as of 2006, is ex- One of the major challenges and growing the consumer base that licks and Nature Valley, are built on
pected to reach 25percent by 2014. in launching a new breakfast-time has been built up. Cereal bars have this platform, and each bar provides
This upward trends point at the category always lies in building the been positioned as rich in vitamins, about 100-150 calories. The reason
minerals, iron, and other similar this does not strike a chord with In-
ingredients — so there is definitely dians is that, consumers look at any
Figure 3: The proportion of hot cereals (oats, porridge,
a consumer understanding of the meal occasion or even a skipped meal-
etc.) as a part of the overall Indian breakfast cereals
goodness of the product and its rel- compensation as part health-part in-
market value is poised to increase further over
evance, but reach and availability is dulgence, owing of the inherent be-
the next five years
still a concern that manufacturers havior of gustatory pleasure seeking.
need to address. So the concept of eating some-
The fact that cereal bars are po- thing within a minute, but claiming
2014 75% 25% sitioned as a gap-fill, and a satisfy- to deliver a lot of the daily recom-
ing nutritious product, would ne- mended nutritional intake, does not
cessitate it being accessible in those go down too well. So instead of the
2010 76% 24%
circumstances. The category has not positioning of “skipped-breakfast
achieved a level of awareness where compensation”, the category could
it benefits from top-of-mind recall, possibly take the route of a “healthy
when hunger strikes. Plus, given the snack” or something like what Tropi-
2006 77% 23% slew of snacking products that are cana has, in terms of “making break-
now claiming to be healthy, thereby fast 100 percent”. n
moving closer to the sweet-spot of
Ready-to-eat cereals Hot cereals taste and health, products in catego- Rahul Ashok is consumer markets con-
ries such as cereal bars, have to work sultant at Datamonitor.
WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT July 2011 • PROGRESSIVE GROCER • 29