Shoshy Ciment/Business Insider
Anything can be breakfast food, if you want it to be.
At least, that’s what Kraft Mac & Cheese is theorizing with its latest marketing campaign. The brand is giving away limited-edition Kraft Mac and Cheese “Breakfast Boxes,” and advertising the noodles as a breakfast option on social media.
Fast-food chains including McDonald’s, Dunkin’, and Panera said that breakfast sales have been hardest hit during the pandemic, and continue to drag down overall business.
“There’s not much recovery in the breakfast day part right now. In terms of day part, breakfast has dried up,” Panera CEO Niren Chaudhary told Business Insider.
Read more: Breakfast sales at fast-food giants like Starbucks and McDonald’s ‘dried up’ during the pandemic
Reuters
But in 2020, cereal sales have grown 11.8%, to $5.4 billion, through the week ending July 25.
Sales are additionally up 6.7% over the last 12 months, Nielsen said. Prior to this recent surge, cereal sales had dropped at least 1% year-over-year dating back to 2017.
Now that many Americans are stuck at home, cereal is once again a convenient option for people unable to pick up a bagel or coffee on their way to work.
General Mills reported in early July that its net sales grew 16% in its most recent quarter, driven by meals, banking, and cereal categories. US cereal sales were up 26% in the period, with the company announcing in last month that it planned to add up to 40 new cereal supply-chain partnerships.
Kellogg’s also reported in late July that net sales grew 9% in its most recent quarter. On a call with investors, CEO Steven Cahillane said cereal consumption in the US was up almost 16% compared to last year.
Magic Spoon
With cereal sales on the rise, some buzzy startups are trying to cash in. One of the biggest names in the breakfast startup world is Magic Spoon, a direct-to-consumer, keto-friendly line of cereals.
“We have seen a bigger demand in our cereal, from both new customers discovering Magic Spoon for the first time, whether from social media or word of mouth, but also our longtime customers who have been ordering more cereal at a time while at home,” Magic Spoon cofounder Gabi Lewis told Business Insider in May.
Post Consumer Brands
Established cereal giants are also turning to partnerships. And new stakeholders, includigfast-food chains to Disney, seem happy to get their own small piece of the booming breakfast business.
Dunkin’ branded breakfast cereals are rolling out through a partnership with Post in early August. The two flavors — Dunkin’ Caramel Macchiato and Mocha Latte — are slightly caffeinated, with about 10% of the caffeine of a cup of coffee.
General Mills launched a cereal inspired by Disney’s “The Mandalorian” with Baby Yoda front-and-center on the box. Kellogg’s recently rolled out “Minecraft Creeper Crunch,” referencing the video game.
Time will tell if the current cereal renaissance sparked by the at-home breakfast boom will last. As both industry giants and startups make new investments, they’re banking on people continuing to eat cereal in the long term — even if growth slows as people return to their normal routines.
“It’s one to watch, obviously, but we’re pretty confident that the at-home consumption is going to remain elevated,” Cahillane said of cereal sales on a recent Kellogg’s investor call. “And we’re assuming a deceleration, obviously, from the height of it as people become more mobile and things do return back to normal, but we’re still seeing good overall consumption”