General Mills Inc.'s global cereal partnership with Nestlé, Cereal Partners Worldwide, turns 25 years old this year, and is as important as ever.
Boosting sales of cereal and other packaged food products internationally is particularly important these days as big food companies face stagnant U.S. growth. In fact, the U.S. cereal market — Golden Valley-based General Mills' largest business — has been notably weak in recent years.
But a bowl full of milk and flaked grains can be a hard sell in some emerging markets where the typical morning meal is steamed rice or bread and cheese.
And in countries where cereal is ensconced, consumers are increasingly forsaking the breakfast classic for yogurt, breakfast bars or other more convenient items. It's a familiar trend for both General Mills and Kellogg.
"In developed markets, some of the same challenges as in the U.S. are playing out there," said Dave Homer, the Switzerland-based CEO of Cereal Partners Worldwide. "You've just got more alternatives at breakfast. But people are not eating less breakfast."
Globally, ready-to-eat cereal is a $27.7 billion business, which has seen sales grow about 1 percent over the past three years, according to Euromonitor International. That's no great shakes, but it's better than the 5 percent decline during the same period in the United States, where cereal is a $9.7 billion market.
Cereal Partners Worldwide — a partnership that results in Cheerios being sold under the Nestlé brand in Europe — is a solid contributor to General Mills' bottom line.
Here in the United States, Kellogg and Golden Valley-based General Mills dominate the industry, each with about 30 percent of the market. But globally, Kellogg has a 30 percent share, and General Mills — through Cereal Partners Worldwide or by itself — has 18 percent.