The Global Cereal Market is expected to grow at a high CAGR during the forecasting period (2022-2029).
Cereal is the edible grass that yields starchy seeds suitable for food. It is the source of nutrients in both developed and developing countries. It is a vital source of energy, carbohydrate, protein, and fiber. It also contains a range of micronutrients such as vitamin E & B, magnesium, and zinc. Cereals are cheap to produce, easy to store & transport, and do not deteriorate readily if kept dry.
The market growth is driven by the rising adoption of healthy and convenient food products. Consumers have replaced the traditional breakfast with the cereal breakfast. They are focusing heavily on minimizing their intake of calories. There is a rising demand for gluten-free breakfast cereals and breakfast cereals for people with diabetes due to rising awareness about health worldwide. Consumers prefer cereals due to health benefits over chronic disorders such as cancer, diabetes, hypertension, liver disorders, and coronary heart disease.
Market players are introducing innovative, fruit-flavored, and fiber-rich products to differentiate their products from their competitors. For instance, Gat Foods of Givat Haim had replaced the unhealthy white stuff in cereals with Fruitlift, which comes in two forms, i.e., one form is injected into the flour mix of puffed cereals in a very mild apple, apple-orange, or apple-mango-citrus flavor that would not overpower the cereal’s signature taste and another is sprayed as a coating onto finished cereal, lending a more pronounced apple, pineapple, citrus or lemon flavor. In May 2019, General Mills had launched drumstick cereal in classic vanilla and mint chocolate flavors.
However, market growth is hindered by the availability of alternatives such as eggs, waffles, yogurts, puddings, smoothies, and sausages. The availability of other low-cost and nutritious meal options and sugar and food preservatives in cereals hurt the consumption and demand of cereal.
The global Cereal market is segmented based on type as hot cereal, ready-to-eat cereal. Among these segments, ready-to-eat cereal dominates the market due to growing preferences for ready-to-eat cereal because of the busy lifestyle. There is an increase in demand for ready-to-eat cereal due to low prices and easy availability. For instance, children love to eat cereal bars due to their attractive packaging, effective advertising strategies, and improved taste.
Hot cereal contributes a significant market share due to the rising adoption of organic and nutrient food. This has resulted in increasing the demand for multi-grain cereals, including grains, seeds, and beans. Moreover, the introduction of new flavors, diversification, and taste innovation increase the consumption of hot cereals.
Further, the market is also classified based on ingredient types: barley, corn, rice, wheat, oat, etc. Wheat and rice are the most important crops, which account for 50% of the world’s cereal production. Wheat is grown both as a winter and spring cereal in many countries such as the United States, China, India, Russia, Pakistan, Europe, Canada, Australia, and Argentina. According to the Food and Agriculture Organization of the United Nations, the global wheat production was 766.4 million tonnes and is expected to increase over the forecasted period due to rising wheat consumption. It has high calorific and nutritional value. Wheat is widely used to produce a meal, breakfast cereals, and flour for bakery products.
Rice accounts for a significant market share as it is one of the largest cereal crops. It is widely consumed as a staple food in Asia. It is used for producing meals, breakfast cereals, and alcoholic beverages, i.e., brew sake. Different varieties of rice such as brown rice, wild rice, white rice, and others are produced. According to the Food and Agriculture Organization of the United Nations, global rice production was 515 million tonnes and is expected to increase over the forecasted period.
By region, the global cereal market is segmented into North America, South America, Europe, Asia-Pacific, Middle-East, and Africa. North America accounted for the highest market share among all of the regions due to rising consumption for cereals, leading to increased cereals' processing and production. According to the United States consumers’ cereal habits survey, 201cereals' processing and production of consumers purchase cereal during their grocery shopping trips, 41% of consumers buy two cereal boxes per shopping trip, and 19% buy three more. Around 50% of consumers take their cereal purchase decision based on flavor over nutritional value (18%), price (17%), and children’s preference (15%). North America is witnessing the high adoption of new cereal products with diversification and innovations. This could have a positive impact on the market.
The growing food industry has resulted in rising demand for cereals in Europe. According to the European Commission, the cereal market is expected to grow through further differentiation with the rising number of exports. European cereal production was 312 million tonnes in 2019 and is expected to increase and reach 320 million tonnes by 2030 due to enhanced competition globally and rising production in the Black Sea region.
Asia-Pacific region contributes to the prominent market share due to the consumers' rising busy lifestyles, leading to increased demand for ready-to-eat cereals. Hot cereal consumers s are majorly preferred; leading wing urbanization, changing purchasing behavior, increasing disposable income, & rising influence of westernization on the consumers' food habits increase the cereal demand. According to United Nations prospects, India, China, and Nigeria would account for 35% of the world's projected growth of the world’s urban population during 2018-2050.
The global cereal market is competitive with forwarding and backward integration. Several local and international players are present in the market. Marico Limited, B&G Foods Inc., Bagrrys India Ltd., Kellogg Company, General Mills, Inc., and Nestlé S.A are the leading companies with a prominent market share.
Companies focus on product reformulation, product innovation, portion sizing, developing new plants, and consumer messaging. They are using definitive brand positioning strategies for placing their products in the market. For instance, in October 2019, Kellogg Company had launched All Together cereal, which contains mini boxes of Frosted Flakes, Froot Loops, Rice Krispies, Raisin Bran, Frosted Mini-Wheats, and Corn Flakes in one package. This product was launched in partnership with the Gay & Lesbian Alliance against Defamation’s anti-bullying campaign. In January 2019, Nissin Foods initiated a 30 million Hong Kong dollar ($3.82 million) processing plant to ship granola to China. It would help the company to save on transportation costs and tariffs and handle the orders.
The companies enter into collaborations, mergers, strategic partnerships, and acquisitions to increase Cereal's demand and expansion across the globe. For instance, in June 2019, Kellogg Company had entered into a partnership with the Seven Bro7hers Brewery to release new craft beers made with rejected breakfast cereals. The Kellogg’s Manchester Factory earlier rejected these breakfast cereals for being too large, too small, overcooked, uncoated, or discolored. These bears are expected to have strong consumer interests. In August 2019, Arcadia Biosciences, Inc. had agreed with Arista Cereal Technologies and Bay State Milling Company to commercialize its high fiber resistant starch wheat in key wheat markets, including North America, Europe, and parts of Asia. Under the terms of the agreement, Bay State Milling would become the exclusive commercial partner for Arcadia's high fiber wheat in North America under Bay State Milling's HealthSense brand portfolio. At the same time, Arista would receive exclusive rights under Arcadia's intellectual property in Australia, New Zealand, Europe, Japan, and South Korea. Arcadia would market its high fiber wheat under its GoodWheat portfolio of specialty wheat ingredients in other international markets.
The companies are also investing to increase their production capabilities around the globe. For instance, in September 2019, Magic Spoon had raised an investment of USD 5.5 million in the seed round for the expansion of its cereal products to more consumers. This investment would be used for scaling up the cereal sales and growing the monthly subscriptions available through the Magic Spoon website. In January 2019, Lok Capital had raised the investment for Monsoon Harvest. The company would be using this funding for geographic expansion and marketing activities such as in-store promotions and. Participating in gourmet exhibitions.
**The global Cereal report will provide access to approximately 53 market data tables, 44 figures, and 178 pages
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