Still hungry: Rising competition from breakfast substitutes will limit industry revenue growth

Conflicting trends over the past five years hampered the Cereal Production industry. Wary of the economy, many consumers turned to cereal as an inexpensive breakfast option. However, demand has waned as consumers shifted to pricier breakfasts as disposable incomes recovered. Moreover, as people returned to work they had less time to prepare breakfast. Instead, Canadians opted to buy food at cafes or coffee shops, decreasing demand for cereal. Over the next five years, recovering disposable income will encourage consumers to purchase brand-name, high-end cereals, which is expected to improve industry returns. In addition, more Canadians will purchase organic and whole grain cereal options due to growing health more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22

Industry Threats & Opportunities

  • Revenue will partially recover, but competition from breakfast substitutes will slow growth
  • Consumers have shifted their appetites, demanding more organic, low-fat and whole grain cereals
  • Time-poor consumers will shift toward more convenient breakfast products
  • Industry Report - Industry Analysis Chapter

    The Cereal Production industry in Canada has struggled over the past five years, with economic conditions largely guiding demand fluctuations. According to industry operator General Mills, Canada ranks third in the world in per capita cereal consumption, at an annual 4.7 kilograms per person, only behind the United Kingdom and Australia. Wary of the economy, low consumer confidence drove demand for breakfast cereals; however, economic recovery in subsequent years has limited demand. Additionally, the price of wheat has fallen since 2012. Furthermore, as the economy began to recover, customers quickly turned away from cereals, rushing to satisfy cravings for alternative breakfast items. The...purchase to read more.

    Additional Insights for the Cereal Production Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cereal Production Industry are

  • Supply contracts in place for key inputs
  • Economies of scale and scope
  • Ability to pass on cost increases
  • IBISWorld analysts also discuss how external factors such as Demand from grocery stores and US dollar exchange rate in the Cereal Production industry impact industry performance..

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    What's in this report

    What is the Cereal Production Industry?

    This industry acquires raw materials, such as corn, wheat, flour, sugar, malt extract, rice and salt from various sources, and processes these ingredients into ready-to-eat cereal, granola cereal (except bars and clusters) and hot cereal. It also purchases raw materials such as plastic and paperboard containers from other manufacturers for packaging purposes. The finished breakfast cereals are subsequently sold to grocery wholesalers, retailers and food service providers.

    Industry Products
  • Ready-to-eat corn breakfast foods
  • Ready-to-eat wheat breakfast foods
  • Other ready-to-eat grain breakfast foods
  • Hot cereal
  • Industry Activities
  • Corn breakfast foods
  • Wheat breakfast cereal
  • Oatmeal (i.e. cereal breakfast food)
  • Grain breakfast cereal
  • Mix grain breakfast
  • Manufacturing granola breakfast cereal (except bars and clusters)
  • Manufacturing ready-to-serve breakfast and instant hot cereal foods
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from grocery stores
  • US dollar exchange rate
  • Per capita disposable income
  • National unemployment rate
  • Canadian-dollar effective exchange rate index
  • World price of wheat

  • Current Performance
  • Changing tastes and suppliers
  • Commodity costs and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Healthy appetite drives growth
  • Industry consolidation and profit stabilization
  • Table: Cereal Production Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cereal Production Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Grocery Wholesaling in Canada
  • Supermarkets & Grocery Stores in Canada
  • Convenience Stores in Canada
  • Food Service Contractors in Canada

  • Key Selling Industries
  • Baking Mix & Prepared Food Manufacturing in Canada
  • Canned Fruit & Vegetable Processing in Canada
  • Corn Farming in Canada
  • Flour Milling in Canada
  • Seasoning, Sauce and Condiment Production in Canada

  • Products & Services
  • Other ready-to-eat grain breakfast foods
  • Ready-to-eat corn breakfast foods
  • Ready-to-eat wheat breakfast foods
  • Hot cereal
  • Chart: Cereal Production Industry Products and Services Segmentation

  • Demand Determinants
  • Changing consumer lifestyles
  • Product innovation
  • Pricing and the presence of substitutes
  • Household disposable income

  • Major Markets
  • Supermarkets and convenience stores
  • Exports
  • Grocery wholesalers
  • Food service providers
  • Chart: Major Market Segmentation for the Cereal Production Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesDepreciation, rent and other costs
  • Chart: Cost Structure Benchmarking – Sector vs Cereal Production

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cereal Production Industry

  • Industry Globalization
    Kellogg Company, Post Holdings Inc., General Mills, PepsiCo Inc.,
  • Table: Kellogg Company - financial performance
  • Table: Post Holdings Inc. - financial performance
  • Table: General Mills - financial performance
  • Table: PepsiCo Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Cereal Production Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Cereal Production Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)
  • Price of coarse grains (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Genetically Modified (Gm)
  • A technique whereby specific changes are introduced into a plant or animal's DNA by genetic engineering techniques. The most common modified foods include soybean, corn and canola.
  • Hypermarket
  • A very large store that carries products found in a supermarket, as well as merchandise commonly found in department stores.
  • Private Label
  • A label associated with a specific chain store; a brand or product having a private label.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Cereal Production market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

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    This report on Cereal Production:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cereal Production market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

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