Cereal faces competition on several fronts: competing convenient breakfast alternatives, a large (and perhaps growing) number of consumers opting to skip the morning meal, and little growth in the population of children and teenagers. In the midst of these challenges, however, manufacturers have managed to maintain, indeed improve upon, dollar sales. Promotions tied to television shows or movies have boosted the interest of younger people, while technological advancements have inserted real fruit into cereal to attract adults as well as youngsters. Nevertheless, Mintel does draw one conclusion likely to concern cereal manufacturers: “Nearly all households eat cereal, and do not appear to be increasing consumption.”
Leading the way in the cereal segment are four companies: Kellogg (Battle Creek, Mich.) and its market-leading 29.2% share, followed by the 27.4% held by General Mills (Minneapolis), PepsiCo's (Purchase, N.Y.) Quaker Oats' (Chicago) 13.8% and the 12.8% share of the Post division of Kraft (Glenview, Ill.). The acquisition of Pillsbury led General Mills to divert some efforts from its cereal development, or the company might have been the category leader, a spot it held as recently as 1999.