Breakfast in America is undergoing some major changes. The popularity of cold cereal has gone mushy. Orange juice sales are at an all-time low. Home-brewed coffee consumption is weak.
There's also been a significant shift in how we eat breakfast. The demands of work and parenthood mean we average just 12 to 13 minutes on breakfast. Some people are looking for a better nutritional balance -- more protein and less sugar -- and for others, breakfast has become a collection of snacks.
Fruit, yogurt (especially Greek yogurt), breakfast bars, breakfast sandwiches and toaster pastries are in. "They're the new convenient breakfast," said Harry Balzer, chief food industry analyst at NPD Group. "Only yogurt needs a spoon. The rest are eat as is. You don't even have to sit down."
The Fast Food Version
Fast food chains are trying to capitalize on our desire to eat fast and eat on the run. In fact, breakfast is the only segment of their business that's growing. As a result, many chains are introducing items for the breakfast crowd. Taco Bell (YUM) has the Waffle Taco, and Dunkin' Donuts offers an eggs benedict sandwich. Burger King (BKW) just spent $11 billion to buy the Canadian doughnut and coffee chain Tim Hortons (THI), partly to capture more of the breakfast market. Of course, industry giants McDonald's (MCD) Starbucks (SBUX) and Subway added breakfast years ago.
"Even when you eat out, breakfast is relatively inexpensive," according to Phil Lempert, editor of supermarketguru.com. "People like to eat out, and breakfast is a cheap and convenient way to do it."
Too Much Sugar?
The changes in our breakfast habits are having a huge impact on some food and beverage industry giants. Kellogg (K), the nation's leading cereal maker, recently reported a 16 percent drop in quarterly earnings, and General Mills (GIS), the second largest cereal maker, is also struggling.
Sales of cold cereal fell by 5 percent in the second quarter from a year ago. According to Balzer, cereal consumption peaked in 1996, when 38 percent of all Americans started their day with a bowl of cereal. That's down to 29 percent now.
The slump in sales of orange juice has been even steeper. Nielsen reports sales dropped 9 percent in July from a year ago and 39 percent from a decade ago, to the lowest level since it began tracking the numbers in 2002.
Not that long ago, a bowl of cereal and a glass of OJ was considered a healthy meal, but recent attention on the high level of sugar in both has hurt their image. OJ sales are also being hurt by the high price, partly because of a supply shortage. The average price for a gallon of orange juice has soared to about $6.45. Forecasters expect Florida's orange harvest to be the smallest it's been in about 50 years.
Orange juice sales have also been squeezed by greater competition from sports and energy drinks, water and other juices. "We're seeing more exotic juices, two or three fruits mixed together," said Lempert. "It's more interesting from a flavor profile as well from a health profile."
Coffee consumption has had a bit of a revival after many lean years, helped by the growing popularity of single-serve coffee pods, even though some experts say that trend may be leveling off.
Produce and Protein?
The trend of fast, easy and more nutritious is likely to continue. "The next generation of fast food at home and eating out could be to include more produce," according to Lempert. "That will help from a nutritional standpoint." He says many people are also looking to add more protein at the start of the day by including nuts, tofu and meat.
Despite all of the changes, we haven't given up on the traditional breakfast altogether, and cereal makers are reformulating products to add protein and fiber and reduce sugar. "Most of us will still have cereal sometime in the morning in the next few weeks," said Balzer. "What's changed is the frequency."
Cereal, OJ and Coffee for Breakfast? Not So Much Anymore
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