“Ofcom’s decision to ban the advertising of products containing high levels of fat, salt and sugar – on children’s channels, during children’s programmes, as well as during adult programmes watched by a large number of children – has had an adverse affect on the sector, which to some extent is dependent upon ‘pester power’,” write the report’s authors.
Statistics detailing the decline in sales in the children’s sector are difficult to obtain, a Key Note spokeswoman told FoodManufacture.co.uk. But sales in the segment reached only £304.3m in 2008 compared with £301.3m in 2006, by far the smallest increase in the cereal sector.
Overall children’s cereals account for 24.6% of the total cereal market.
Characters, celebrities
In 2007, the Office of Communications introduced a curfew on the advertising of unhealthy foods around children’s viewing times and restricted the use of licensed characters, celebrities, promotional offers and health claims.
Companies had responded to the restrictions by introducing new products, said the spokeswoman. Chocolate Weetabix became the first chocolate cereal to be allowed to be marketed to children under the new Ofcom rules, contributing to Weetabix's leading UK turnover in the cereal sector, the report said.
Despite product innovation and reduced salt levels, a recent report by consumer group Which? found sugar levels were still high in many products, according to the report. Of the 100 cereals tested in 2009, 59 received a red light for sugar levels, based on the traffic light food-labelling system, with almost half aimed at children.
Meanwhile, the cereal sector overall is predicted to grow by 15.1% to reach about £1.69bn by 2015 compared with an estimated £1.47bn this year.
Health benefits
The sale of porridge and other cereals containing oats has risen significantly reflecting rising awareness of the health benefits of oats and their suitability for people intolerant to gluten. Manufacturer Rude Health reported a 45% surge in the sales of its porridge lines.
Manufacturers such as Doves Farm and Alara Wholefoods have also boosted sales of gluten-free, diabetic and vegan breakfast cereals.
The report noted potential for innovation, particularly in the health- and speciality-cereal areas.
An ageing UK population will also help to increase cereal product sales, according to the report.