Consumers had been lured away from cereal aisles in recent years by a fast-growing menu of other exciting breakfast options at restaurants and at home.
Cereal was a winner in the pandemic. How does your favorite kind rank?
The 2020 boost in cereal sales has receded, but General Mills continues growing market share.
December 27, 2021 at 4:41PM
The COVID-19 pandemic awoke the sleepy segment, pushing U.S. cereal sales back above $9 billion in 2020 — good news for the two Minnesota companies, General Mills and Post Consumer Brands, that together sell half of all ready-to-eat cereal in the country.
But as lockdown stockpiling eased from their heightened levels, sales slipped this year to $8.66 billion, according to IRI, a Chicago-based market research firm.
Still, General Mills has increased its U.S. market share for 37 straight months, the company says, tightening its grip as the country's top cereal producer.
"Our performance is not driven by short-term competitive supply chain dislocations," said Jon Nudi, General Mills' president of North American retail. "It's the result of consistently bringing compelling consumer ideas, relevant innovation, strong levels of investment and excellent execution to the best brands in the category."
Over 52 weeks ending Oct. 31, General Mills sold $2.85 billion worth of cereal in the U.S., according to IRI. That was 4.4% less than the year before, but sales fell further among its largest competitors, Kellogg Co. and Lakeville-based Post Consumer Brands.
General Mills' Honey Nut Cheerios remains the top-selling cereal in the U.S. The Golden Valley-based company's Cinnamon Toast Crunch is second.
According to IRI, Honey Nut Cheerios was the top seller among all store brands, including Target's Good & Gather or Costco's Kirkland Signature, combined.
Private label, as the often less-expensive store brands are collectively known, saw a 15% drop in sales over the past year, even as inflation caused a spike in food prices.
"People are not trading down to private label; people are going to brands they know and trust," General Mills chief executive Jeff Harmening said. "Eating at home raises all boats, but we've done better than most."
Michigan-based Kellogg, which weathered a two-month strike at its cereal plants that recently ended, saw U.S. sales slip 8.8%. Its Frosted Flakes and Froot Loops are the third and seventh best-selling cereals, respectively.
The company in November blamed supply chain disruption for its slower cereal sales, which represents 20% of its global business.
"The performance of key brands in the U.S. has been impacted by supply complications in North America, but internationally, we're seeing good growth," Kellogg chief executive Steve Cahillane told investors in November.
Post Consumer Brands makes the fifth-best-selling cereal, Honey Bunches of Oats, which saw a 10% drop in sales after enjoying a pandemic-fueled bump the year before.
Among the 20 best-selling cereal brands, only Fruity Pebbles and Cocoa Pebbles saw sales increase from Oct. 31, 2020, to Oct. 31, 2021, according to IRI.
The outlook for cereal has been revived somewhat by the lasting effects of pandemic-era grocery shopping and a permanent shift to more people working from home.
"People will work at home more than they have before, once this pandemic hopefully ends," Harmening said. "Which is more people eating at home, which is great for us."
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