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Sweetening the Cereal Aisle image

Sweetening the Cereal Aisle

There’s no shortage of researchers and analysts ready to expound on consumers’ increasing attention to health and wellness in their lifestyles and eating habits.

In a strange bit of counterprogramming, though, there’s been a noticeable uptick of cereal manufacturers licensing candy, cookie and confectionery brands into the cereal aisle, looking to stem declines in a category whose sales have dropped 17% in the last decade. Examples abound.

  • Just a couple of weeks ago, General Mills, long-time Hershey’s cereal licensee, announced extensions to include Jolly Rancher, Hershey’s Kisses, and Reese’s Puffs Big Puffs versions.
  • That’s about a year after Post launched Hostess Brand Donettes and Honey Bun cereals with prominent endcap placement at Walmart; in December, it added a Twinkies version.
  • Post earlier relaunched Oreo O’s and Honey Maid S’mores cereals (brands licensed from Mondelez).
  • And, in a seasonal effort, Kellogg’s marketed a Peeps cereal (licensed from Just Born)last spring.
  • Kellogg’s even licensed a cereal café in Times Square in 2016; a later iteration elsewhere in Manhattan closed just last month.

So, what gives?

One financial analyst says “the sugary stuff is actually what’s selling now,” driven by factors such as millennials’ nostalgia for brands they grew up with, and cereal marketers recurring efforts to position their products for dinner and late night snacks.

What seems to have changed is that millennials – the better-for-you standard bearers – are no longer viewing cereal as strictly a breakfast meal, but rather a sugary snack. (That’s a marketing tactic that cereal makers have used every so often as a hedge against breakfast slumps.)In fact, more than 50% of millennials say they eat cereal as a snack, compared to 33% of baby boomers.

For brand owners, the cereal aisle is a loyalty builder and marketing billboard to promote other SKUs carrying the brand.

Hostess last year hired its first Chief Marketing Officer since emerging from bankruptcy several years ago, and has since formed a Chicago-based brand group that works with Global Icons on licensing. In addition to cereals, it has licensed Trilliant Food and Nutrition for coffee pods (Ding Dong, Ho-Hos, Twinkie flavors) with eyes on other categories.

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