Removing Artificial Ingredients Helped Turn Around Cereal Sales

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SOURCEBullHorn

When New York Times reporter Kim Severson wrote about the past, present, and unsure future of breakfast cereal last month, the Internet lost its mind over one fact included in the story: 40 percent of millennials surveyed by the market research firm Mintel said they didn’t eat cereal for breakfast “because they had to clean up after eating it.”

It was a tidbit that fed into the kind of overwrought hand-wringing about lazy, entitled youngsters that boomers and, to a degree, Gen Xers revel in. Sales figures reported by General Mills, however, suggest that the decline in cereal sales cannot wholly be attributed to a generation unwilling to do the dishes. In a Wednesday conference call with investors, General Mills CEO Ken Powell said seven cereals that had been reformulated to remove all artificial colors and flavors saw a 6 percent uptick in sales as of January, regaining the 6 percent drop in sales they suffered last year. Consumers bought more beige Cheerios and Technicolor Lucky Charms alike.

Overall, General Mills’ cereal sales dipped by 2 percent in the third quarter, but the increases among artificial ingredient-free products suggest that perhaps it’s not a problem with cereal per se that has caused Americans to turn away from the breakfast of champions, but rather what they’re made with. Across the industry, sales have dropped from $13.9 billion in 2000 to around $10 billion today.

General Mills has reformulated 75 percent of its cereals to have no artificial colors or flavors, and aims to hit 90 percent by the end of the year. The food company, along with its major cereal competitor Kellogg’s (which is also phasing out artificial colors and flavors), will soon include GMO labeling on all of its products as well. If, as some analysts have suggested, the move toward labeling foods made with genetically engineered ingredients results in companies moving to non-GMO alternatives, that shift could potentially bring more Americans back to the cereal aisle as well—maybe even millennials.

Kellogg’s CEO John A. Bryant, for one, is bullish: He predicted a 1 to 2 percent rise sales for his cereal products this year.

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