Until the 14th century, big meals began only around midday for Indians. It was not customary for the population then, chiefly comprising farmers and gatherers, to eat breakfast. After sunset, people consumed supper – the other meal of the day. When Indians began working extensively in other people’s houses and establishments, they may have opted for early morning snacks. With the advent of industrialization, Europeans would commonly consume coffee, tea and chocolate along with crackers and cereals. And when they came to India, they may have brought this custom. Soon, elite Indians too ate breakfast cereals and started the process of commercialization of the western breakfast cereal category in India.
From then to now, the much-awaited 2022-2028 India Breakfast & Cereal Market Overview has been released and one of its chief observations is that the domestic Breakfast Cereals Market has been on a sustained uptick, riding the expansive demand for cornflakes, muesli and oats. In a significant shift in trends, South India – which has traditionally backed its regional rice-based breakfast options – has emerged as the leading consumer of oats. Tier I cities are also materializing as premium buyers of both hot and cold cereal categories. And the competition is increasing with growing awareness among the Tier II towns’ and cities’ hefty consumer bases about the overall western breakfast cereal category.
India is choosing Western Breakfast Cereal Options Consistently
The Report shows how the nation’s Cereals Market has registered remarkable growth over the years. The hot cereal subdivision (especially oats) is the fastest growing segment in the category – certain experts even pegged the growth of oats at approximately 24% in the last few years. The entire category has performed strongly on its own as well, having grown at a vigorous pace, at a CAGR of approximately 22% over the last five years.
As it is, we Indians have always liked our breakfasts hot. But we were unhappy when our bowlful of cornflakes turned soggy the moment we poured warm milk over it. This was noted by manufacturers who have since made the cereal crunchier than ever before and have also worked to expand the hot breakfast segment with various indigenous oats flavours, such as masala, tomato, curry, etc.
Benefitting from all this attention, the oats segment has flourished partly because Indians discovered that it tasted great with warm milk. Oats’ high acceptance and popularity is also driven sharply by growing consumer awareness of its health benefits. The burgeoning middle-class, double-income households of young millennial-led India is a big market for western breakfast cereals, as they seek healthy, delicious and convenient options. Thus, it has emerged as a top contender for the most popular hot western breakfast cereals’ crown. At present, while plain oats is the category topper, flavoured oats is also showing promise growing in a sustained and steady fashion. Along with plain and flavoured oats, wheat bran and porridge are what make up the overall hot cereal or Ready-to-Cook Market in the subcontinent.
Muesli: The Dark Horse
The other subgroup is the Ready-to-Eat or cold breakfast cereals that comprise of corn flakes, choco flakes, wheat flakes, muesli, etc. This range is growing at its own steady pace, with muesli growing expansively at 16-18% CAGR with an estimated market size of INR 275 crores. Since muesli is an oats-based healthy cereal, it is winning the market with all the extra nutrition it offers.
Other than oats, the cereal usually includes dried fruits such as raisins or dates, nuts such as almonds or walnuts and also seeds and sometimes even other grains such as millet or barley. This nutritious mixture is a goldmine of soluble fibre, proteins, iron, vitamins, antioxidants, Omega-3 fatty acids, etc., making it a complete healthy meal by itself or when combined with milk. Having muesli for breakfast guarantees you a good supply of fibres to keep your gut happy, reduces bad cholesterol making your heart happy and gives you sustained energy, thus balancing your blood sugar levels. No wonder it’s hugely popular in Europe and the US and going by reports, gradually winning hearts in the subcontinent as well.
Why this Shift in Trends
The new-found health consciousness is a result of the pandemic, following which consumers have flocked to the formerly niche category of breakfast cereals, tremendously boosting its appeal. Companies noticed the demand and introduced regular innovations. Several start-ups mushroomed specifically to cater to this demand and expanded the market size.
The Market at Present
At present, the overarching consumer demand is very simple and huge – simply because they want healthy and hygienic packaged breakfast cereals. And huge because the category revenue adds up to USD 4.15 billion in 2022, with a projected year-on-year growth rate of 8.75% till 2027. The volume is also expected to grow to 1,489 kg by 2027. By 2023, the market is expected to witness volume growth of 7.4%, as the average per capita volume consumption is expected to touch nearly 0.9 kg in 2022. All this when a study shows that nearly 44% of urban Indian millennials continue to skip breakfast – indicative of a colossal untapped market potential if this population can be pursued with healthy, delicious and convenient breakfast options.
The Shining Future
From the tough initial days of the segment in the 1990s, the struggle is no longer for mass acceptance; in the present times it is about offering quality products and keeping ones’ consumers happy, while expanding the market share. With so much development over the past five years, the Western Breakfast Market in India stands poised at a precipice now.
In this extremely competitive atmosphere, if the manufacturers play their cards well, all global and domestic players will enjoy their share of the pie. For this to happen, detailed plans involving continual innovation and investment in R&D, new product launches and category expansion, strategic partnerships and acquisitions and market expansion will be necessary to negotiate the new norms of the market, but in the end, it will pay rich dividends.
About the Author:
Amarnath Halember
Executive Director & CEO,
NextG Apex India Pvt. Ltd.
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