convenience foods. Thinking beyond breakfast

The ‘healthy’ breakfast cereals segment is heating up in India, with new entrants and start-ups joining the fray.

Meanwhile, existing players are ramping up their distribution and product range for a crunchier bite of the breakfast pie. What’s more, the cereal makers are serving up their offerings as evening snacks as well, expanding the scope of their products to new consumption occasions. As time-starved executives, discerning mothers and health-focussed millennials bite into these products, breakast cereal companies are eyeing good growth.

A significant player that has entered the packaged breakfast segment in India this year is Nestle India, which made its foray into the category with the launch of its multi-grain NesPlus Breakfast Cereals. It marked its entry with a high-decibel launch on Amazon on Prime Day in July.

It’s a well-thought-out move by the Swiss major as it can leverage the synergies of its other products, such as ready-to-drink coffee, packaged milk and greek yoghurt, with breakfast cereals, to grab a more significant share of the overall pie. HUL too is betting big on the breakfast consumption occasion. Earlier this year, it launched the Lever Ayush breakfast mix range that includes Aval Millet Pongal, Masala Millet Upma and Classic Millet Khichdi .

As Abhneesh Roy, Senior Vice-President, Edelweiss Securities, in an analyst note, points out, “We expect the breakfast category to expand with entry of behemoths like Nestle and HUL. Although, in terms of pricing, it (NesPlus breakfast cereals) is at premium to competition…its taste, differentiation and health benefits will be the key for scale-up.”

Despite the presence of multiple players like Kellogg’s, Quaker and Bagrry’s, among others, the per capita consumption of breakfast cereal is still very low in India compared to other developed markets.

According to estimates by Euromonitor International, the market size of breakfast cereals, which is an aggregation of ready-to-eat and hot cereals, stood at ₹25.8 billion in 2018 in terms of retail sales value. It is expected to grow only at a CAGR of 5.6 per cent till 2023.

So, what is encouraging these companies to make bigger bets on this breakfast cereals segment?

Dilip Radhakrishna, Research Analyst-Food & Nutrition at Euromonitor International, feels the doubling of this category as snacks is one reason. He says, “Since breakfast cereals are becoming essential daily meals for most households, demand is set to increase. Along with the growing popularity of traditional Indian dishes available in hot cereals, children’s breakfast cereals will keep being favoured as snack options among many households, which will thus contribute to the overall sales growth.”

From am to pm

Besides the new entrants, existing national and regional players have also been steadily ramping up their presence in terms of product portfolio as well as distribution. For instance, Bagrry’s India entered the kids’ cereal segment with Choco Plus this year to complete its portfolio of breakfast cereals.

The home-grown company is betting on this product getting on to the dining table on occasions other than breakfast. Says Aditya Bagri, Director, Bagrry’s India, “Our products, especially muesli, are increasingly now being consumed as evening or mid-night snacks, especially by millennials, young working professionals and students who are time-pressed and looking at ready-to-eat snack options. We will continue to focus on products which will have a dual role of breakfast and healthy snacking.”

He adds, “I believe the breakfast cereals segment, though still in its early stages in India, is poised to reach an inflection point. The entry of new players will help grow the size, scale and penetration of the category. Over a period of time, cost on category education for breakfast cereals has come down and entry of new players will further help in building the scale of the category.”

In the meantime, start-ups are doing their bit by leveraging on e-commerce and modern trade to scale up their innovations. Some are bringing back ancient grains to the table in new forms.

Millets and more

Take, for instance, Bengaluru-based Kottaram Agro Food, which is focusing on offering traditional Indian healthy grains such as millets and ragi in modern formats targeted at breakfast and snacking consumption occasions. One of its recent launches has been Millet Smoothix, a powdered instant drink that it sells under its brand Soulfull.

Prashant Parameswaran, MD, Kottaram Agro Foods, explains, “We are trying to build a new category within what is known as the breakfast cereals space, by focusing on the goodness of traditional Indian grains and leveraging on India’s nutritional diversity.”

Parameswaran too points out how Kottaram’s products are being increasingly consumed not just for breakfast but as evening snacks as well. Seeing this trend, the company has introduced a new packaging for its products to enable parents to give to their kids a single-serve 4 pm snack.

It’s smart marketing for sure. Now, let’s wait and see if the cereal makers manage to get on to more plates and bowls.

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