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An American author, Adelle Davis once said, “Eat breakfast like a king, lunch like a prince, and dinner like a pau-per”. Although there is much truth in this statement, the underlying impor-

tance seldom seems to have been realised by the average Indians.

By Rahul Ashok

Quest for a quick and healthy meal is fast transforming the Indian breakfast menu

M A R K E T

I N S I G H T

Breakfast-er than everbefore

How manufacturers can look at juggling the consumers’ demand for taste, nutrition and convenience, is what has become one of the most hurried meals of the day. With longer commutes, more distractions in the morning owing to a highly-connected lifestyle, and rising social-professional pressures, breakfast is one meal that seems to be a soft-tar-get for dietary modifications.

Over the last few years, it has been amply discussed in various me-dia, that parathas and idlis on the breakfast table have slowly given way to a new dietary system, which is skewed towards partially processed and packaged foods. While break-fast cereals undoubtedly account for a lion’s share of this transforma-tion, there are other contenders such as cereal bars, oats, etc., which are

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fast-emerging to be considered as se-rious enough options by consumers, as alternatives for a breakfast.

One of the fastest growing CPG categories in India

After overcoming initial hurdles in getting India as a nation to accept the concept of breakfast cereals into the fold, the growth of breakfast ce-reals is a story to be told. Even when one looks at a snapshot of the last five years, the market for breakfast cere-als in India has grown from $2.84bn in 2006 to over $6bn by 2010, at a CAGR of 21 percent. lifestyle needs and marketers’ interventions are ex-pected to impact the growth further, and the market is expected to cross $14bn by 2014.

looking at this from the context of Asian countries where there has been a long-standing tradition of various indigenous breakfast foods and concepts, India has been the fastest growing market over the pe-riod 2006-10, at a CAGR of almost 21 percent. In terms of absolute growth rates, only Pakistan comes

close on the heels of India, that too, with a CAGR of 18 percent.

Despite the ample optimism coming from these statistics and forecasted growth rates, what re-mains an area of debate and concern among many companies, is whether the impetus for breakfast cereals have built-up for a dietary transition and whether it is backbone-enough

for effective sustained growth in the years to come. Kellogg’s journey of setting up the market in India, from a time when Mohan Meakin’s was pretty much the only cornflakes brand in the country, has enough examples to stand testimony to the concern expressed by many, in terms of varying and indefinite consumer attitudes towards the segment.

In the following sections, we will delve into some trends, not only in the breakfast cereals space, but also categories such as, cereal bars, oats and pseudo-breakfast concepts that are being tailored into products from categories such as juices, as well. On the basis of these observations, we would look at some opportunities that are emerging in this space.

A call for more focused health management

Cornflakes as a category had a rather generic positioning in In-dia even until the year 2000, where brands usually talked to the family as a whole. While Kellogg’s struggled with various flavor concepts given the fact that many an average Indian was not ready to incorporate cere-als into the regular dietary intake. It was the positioning of “helping to enhance mental concentration”, and “Iron Shakti”, that helped change fortune of the brand.

Given that there were very few brands in the market, this category positioning stayed, until the launch of Kellogg’s special K. This brand, specifically targeted at women, and delivering the proposition of weight management, was a first in the category. Although the brand was worth more than billion dol-lars globally, the launch in India was only in 2008. This was surprising, considering the fact that obesity and weight management has been a cause for concern in India for long, and has seen much activity as a concept for the last decade through various product and service streams. Given that the health and wellness wave in India has manifested across various product categories, through various benefit platforms, breakfast cereals as a category seems to be sometimes challenged by a “too little, too late” phenomenon.

Kellogg’s special Kspecifically targeted at women, and delivering the proposition of weight management, was a first in the category.

2006 2010 2014

2.84

6.04

14.07

Figure 1: The breakfast cereals market in India is expected to heat-up even further over the next five years, with a forecasted growth rate of almost 24%

Note: Figures iN iNr billioN

CAGR 24%

CAGR 21%

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Taking for instance the case of biscuits, brands in this space have evolved from being associated with just tea-time consumption, to be considered seriously enough by those wanting to “have a health snack”, or those wanting to manage health con-cerns such as diabetes or cholesterol. At each juncture, brands have sup-ported major ingredient modifica-tions with sufficient product litera-ture and marketing, to educate the consumers.

Breakfast cereals, including oats and muesli, in spite of having an in-herent advantage of being healthy by virtue of the basic formulation, but

have not sufficiently leveraged upon it to talk to specific consumer groups. Given that the hectic lifestyle of In-dians is sapping their energy levels further, and testing their immune systems to the limits, there are ample opportunities for brands to deliver product concepts on all these fronts, and not only disease redressal as in the case of diabetes, obesity, etc.

Cereals++, but do people know?

Over the last few years, India-based players such as Baggry’s and Good Earth have launched varieties

of muesli and/or oats, each having different flavor combinations and ingredient modifications (trans-fat free, zero cholesterol, sugar free, fiber-rich, etc.). These brands have solely relied on the strength of their distribution, and in-store communi-cation to build the brand, without resorting to extensive campaigns on other media channels.

It is interesting to note that al-though these brand has been success-ful in terms of formulating products that are aligned with the lifestyles and needs of Indian consumers, the awareness levels regarding the products (apart from cornflakes), are still very low. There are so many households in India, where they do

consume breakfast cereals, but are not familiar with the concept or ben-efits of a product like muesli.

One can recall scores of regional and smaller players, such as Good Earth muesli and even private label brands from Future Group, which have launched breakfast cereals, but have failed to see the traction one can expect from a market like India. Although these brands have helped expand the market for such prod-ucts, there still remains a need for companies to educate the consumers through more focused campaigns on mass media, as was done in the case of Quaker oats, with their extensive heart-related communication fol-lowing the launch of the brand.

Figure 2: Among the five fastest growing breakfast cereals market in Asia from 2006-10, India tops the

chart, with a CAGR of almost 21%

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011 2012 2013 2014

India Pakistan Singapore Republic of Korea China

Mar

ket v

alue

in $

bn

The companies should educate the consumers through more focused campaigns on mass media.

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Sailing in the same oat

Although the concept of eating oats as a healthier alternative has been in existence for ages in India, it was more popular among slightly older consumers, who were usually con-suming it out of unavoidable health concerns. From such a positioning, Oats as a category has evolved to be perceived even by relatively younger consumers to be a healthy way to start their day. This transition can be largely attributed to the marketing efforts of Quaker in India.

The market for oats is much smaller compared to breakfast cere-als, and valued at INR 1.2bn as of 2010, but the hot cereals market, which accounted for 23 percent of the overall market as of 2006, is ex-pected to reach 25percent by 2014. This upward trends point at the

inherent preference for warm breakfast-concepts among In-dians, what Kellogg’s fought against for more than a decade.

The fact that oats as a cat-egory has come to be strongly associated with heart health, is certainly a marketing win, but to grow sales further, compa-nies need to innovate with re-spect to product delivery plat-forms. More so, considering the fact that oats has reached a stage where it is considered a super-ingredient (such as aloe vera in the case of personal care products), and is being used across product categories such as biscuits, health drinks, bread, etc. So oats as a breakfast

concept, if it fails to sustain the in-terest of consumers, might give way to possible intake through other product formats.

This in itself could also be turned into an opportunity, as was indirectly done in the case of Kellogg’s, which positioned cornflakes as a healthy snack in smaller pack sizes. Or take the case of Kissan jams which have recently come out with a campaign that says Kissan jams can be enjoyed even in the form of lassi (yoghurt drinks). Such adjacencies could prove worthy product line exten-sions for major cereal manufacturers in the years to come.

No bar to cereal bar

One of the major challenges in launching a new breakfast-time category always lies in building the

relevance of a consumption occasion and benefit, into the consumers’ life-styles. Such has been the increase in the incidence of skipped breakfast meals and the desire for on-the-go/out-of-home consumption, that in-spite of the fact that cereal bars went main-stream in the country as late as 2006, the category has grown from just INR 71m then to INR 355m in 2010, which is at a whopping CAGR of 49 percent!

Domestic brands such as Rite-Bite have played a very vital role in growing the category, through GTM strategies involving careful channel selection, and targeted for-mulation concepts. But there still remains an uphill task, of retaining and growing the consumer base that has been built up. Cereal bars have been positioned as rich in vitamins, minerals, iron, and other similar ingredients — so there is definitely a consumer understanding of the goodness of the product and its rel-evance, but reach and availability is still a concern that manufacturers need to address.

The fact that cereal bars are po-sitioned as a gap-fill, and a satisfy-ing nutritious product, would ne-cessitate it being accessible in those circumstances. The category has not achieved a level of awareness where it benefits from top-of-mind recall, when hunger strikes. Plus, given the slew of snacking products that are now claiming to be healthy, thereby moving closer to the sweet-spot of taste and health, products in catego-ries such as cereal bars, have to work

that much harder to be preferred over other alternatives.

To achieve this, the strategy has to be two-pronged. Firstly, the avail-ability of these products should move beyond the walls of modern trade outlets (which still remain the key distribution channel), and en-sure that there is product presence and communication at other retail outlets, so that a potential target au-dience is not lost out at touch points such as, schools, colleges, workplac-es, gyms, etc.

Also, the category needs to move away from the proposition of solely talking about “concentrated and con-venient nutrition”. All the brands available in the market, such as Hor-licks and Nature Valley, are built on this platform, and each bar provides about 100-150 calories. The reason this does not strike a chord with In-dians is that, consumers look at any meal occasion or even a skipped meal-compensation as part health-part in-dulgence, owing of the inherent be-havior of gustatory pleasure seeking.

So the concept of eating some-thing within a minute, but claiming to deliver a lot of the daily recom-mended nutritional intake, does not go down too well. So instead of the positioning of “skipped-breakfast compensation”, the category could possibly take the route of a “healthy snack” or something like what Tropi-cana has, in terms of “making break-fast 100 percent”. n

Rahul Ashok is consumer markets con-sultant at Datamonitor.

Figure 3: The proportion of hot cereals (oats, porridge, etc.) as a part of the overall Indian breakfast cereals

market value is poised to increase further over the next five years

2006

2010

2014

77%

76%

75%

23%

24%

25%

Ready-to-eat cereals Hot cereals

The hot cereals market, which accounted for 23 percent of the overall market as of 2006, is expected to reach 25 percent by 2014.