For the FMCG foods sector, the breakfast and healthy snacks category has materialised as an outlier. With the increasing awareness around healthy eating, snacking through the day and growth beyond metros into tier-2 towns are driving the breakfast and healthy snacks segment, even while the FMCG foods sector reported negative growth.
Kellogg’s MD (India & South Asia markets) Prashant Peres, quoting Nielsen Consumer data, said volume growth in breakfast and healthy snacks—when put together and compared with other food categories—has been consistent over a span of two years from July-September 2020 to January-March this year.
The segment showed 1.8% volume growth in the first three months of this year as compared to the year-ago period. In comparison, the average FMCG food growth was a negative 1.8% in the same period.
“We see good grip on the penetration opportunity for the brand.” “Kellogg’s achieved the highest ever penetration in the March quarter, with an increase of approximately 1.5x vs the past and exceeding 15% for SEC A/B households in MAT (moving annual total) March 2022 at an all India level,” said Peres.
Aditya Bagri, Bagrry’s group director, stated that there has been a noticeable post-pandemic shift toward healthier eating.While initially it was more intent, he added that now it’s converting into actual consumer demand.
“There’s a significant change in the consumers’ choice of what they want to eat. The factors driving this are nutrition and convenience. We get a lot of feedback that our muesli is consumed not just as a cereal with milk but also as a snack during the day, on-the-go, and also as a mid-night munch. So, the opportunity to consume the product has expanded,” said Bagri.
Different cereals are consumed at different times by different people. According to a product test study done with 200 homemakers across the country in partnership with IPSOS earlier this year, Kellogg’s found that its cornflakes are eaten by more than 80% of consumers during morning breakfast time and close to 30% as evening snacks.
“The consumption trend of Kellogg’s Chocos also shows 74% having it in the morning as breakfast. What is good to see is that a significant part of the same is also on snacking occasions, with more than 60% of consumers eating this cereal in the evening,” said Peres.
A Nestle India spokesperson said the breakfast cereals category is gaining relevance beyond the metros and tier-1 towns. Nestle is seeing increased traction in tier-2 towns. The spokesperson added that the adult segment (granola and muesli) is seeing the fastest growth, while there is also an increasing trend of delivering functional nutrition (protein, probiotics) and local grains (millets) through breakfast cereals, catering to the health-conscious millennials.
Other than that, the growth of the e-commerce channel has also acted as an enabler, with more variety available to consumers.
Bagri said, “The consumption of breakfast cereals is also moving from urban to semi-urban and, to some extent, rural as well. That is definitely going to spur growth. But there’s a caveat.”
Unlike categories like staples that have grown with consumers converting from loose to packaged products, breakfast cereals are a 100% organised category and they do not get the tailwind advantage that other categories have—consumers shifting from loose to packaged.