We all know the sad story surrounding fluid milk consumption. Since the 1940s, milk consumption per capita has been trending downward in the United States. The good news is that consumption of dairy products is on the rise, with people eating their dairy rather than drinking it, but that doesn’t hide the fact that fluid milk sales are on a steady decline.

The reasons why people are drinking less milk are many, but one contributing factor is that milk’s common partner at the breakfast table is struggling as well. Just a few decades ago, dry cereal — covered in milk — ruled the breakfast menu in people’s homes. After the height of its popularity in the 1980s and 1990s, breakfast cereal sales have been trending downward.

Cereal sales saw a rebound early in the pandemic, rising 5.2% in 2020, according to data from Circana. However, that was followed by drop-off of 8.7% in 2021 and another 3.9% reduction in 2022 as people returned to work and school and more portable breakfast options once again became more desirable.

A recent article in The Wall Street Journal shed light on the challenges major cereal manufacturers are facing and what these companies are doing about it. For example, the article explained that Kellogg is going to separate its cereal division into a new company named WK Kellogg after its founder who invented cereal. This change will allow the parent company to focus on its brands in the flourishing snacking segment.

Meanwhile, General Mills is investing in its cereal line, particularly the Cheerios brand. From a heart-shaped logo on the box to television ads, General Mills is working hard to promote Cheerios’ role in heart health. They are also introducing new versions of the classic cereal, including Cheerios Oat Crunch, which the company says has visible whole grain oats added for more texture and crunch.

As cereal businesses attempt to find a path forward amid today’s consumers, hopefully it includes products that taste best with a serving of milk. Fluid milk sales could use the boost provided by breakfast cereal consumption, and the essential nutrients found in milk are a great way to start anyone’s day.

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(c) Hoard's Dairyman Intel 2023
October 9, 2023

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