By Mary-Lynn Cesar
Once a beloved breakfast food, cereal is trying to stage a comeback as the solution to a late night snack attack.
They're just not eating cereal like they used to. And despite what The New York Times, Washington Post and other news outlets claim, they don't just mean millennials. Time-pressed consumers of various ages are passing on the bowl in the morning, hence why U.S. cereal sales fell by 2% in 2015.
Last year's sales decline wasn't a fluke. A 2015 study of American breakfast habits revealed that 53% of Americans fail to eat breakfast on a regular basis, with 12% skipping it altogether. This helps explain why cereal sales are suffering: according to Bloomberg, cereal sales have tumbled since 2012 and the slump is predicted to last through 2020 - at least.
What's a cereal maker to do?
In Kellogg's (NYSE:K) case, the solution lies in millennials' hands. The company behind Frosted Flakes, Corn Flakes, Special K and more, hopes to get millennials on board and revive sales by marketing its cereals as late-night snacks rather than breakfast foods. Kellogg cites the growing share of cereal consumed in the afternoon and evening - which reached approximately 35% last year - as proof of the rising demand for cereal as a snack.
Millennials' hands are playing a big role in the rebranding for another reason: portability. According to market-research company Mintel Group Ltd., 56% of millennials believe cereal should be easy to take on the go. Mintel senior food analyst Amanda Topper emphasized the importance of convenient breakfast options to GQ, highlighting McDonald's (NYSE:MCD) success with its All-Day Breakfast menu as proof that consumers like meals they can eat on the run.
So it should come as no surprise that Kellogg is introducing grab-and-go containers for several of its cereal brands. The company is also playing to millennial nostalgia, which Topper says plays a big role in cereal sales. In 2014, Kellogg released its "Bring Back the Awesome" Froot Loops commercial that featured young parents playing Super Nintendo. And at the end of 2015, Kellogg revived its formerly-discontinued Smorz cereal after being inundated with consumer requests (including a Change.org petition).
Will Kellogg's efforts to appeal to millennials succeed? And will other cereal brands follow suit? Below are four companies behind some of the most well-known cereals in the country. All four have seen a decline in sales quarter over quarter, but they're also outperforming the market - an impressive feat considering stocks' rocky start to the year.
1. General Mills Inc. (NYSE:GIS): Manufactures and markets branded consumer foods worldwide. Market cap at $37.36 billion, most recent closing price at $62.94.
Sales grew by 3.80% over the past five years. Sales fell by 8.00% quarter over quarter.
General Mills has outperformed the market by 10.01% year to date.
2. Kellogg Company: Manufactures and markets ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America and the Asia Pacific. Market cap at $26.99 billion, most recent closing price at $76.59.
Sales grew by 1.80% over the past five years. Sales fell by 10.60% quarter over quarter.
Kellogg has outperformed the market by 6.69% year to date.
3. PepsiCo Inc. (NYSE:PEP): Engages in the manufacture, marketing and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. Market cap at $149.62 billion, most recent closing price at $101.37.
Sales grew by 1.70% over the past five years. Sales fell by 6.80% quarter over quarter.
PepsiCo, parent company of Quaker Oats Company, has outperformed the market by 2.18% year to date.
4. Post Holdings Inc. (NYSE:POST): Manufactures, markets, and sells branded and private label ready-to-eat cereal products primarily in the United States, Puerto Rico, Canada, Mexico and the Caribbean. Market cap at $4.44 billion, most recent closing price at $70.24.
Sales grew by 36.10% over the past five years. Sales grew by 16.30% quarter over quarter.
Post has outperformed the market by 13.84% year to date.
Quarterly sales data sourced from Zacks Investment Research. All other data sourced from FINVIZ.