The South America breakfast cereal market is growing at a CAGR of 3.8% during the forecast period (2020 - 2025).
- The growth of the market is mainly driven by the changing food habits and influence of western culture on dietary patterns of consumers, as it provides a convenient solution to readily accessible food that optimizes the ease of consumption without further preparation.
- Furthermore, cereal brands are embracing creative tactics to boost consumption in South America, so as to keep consumers engaged in the category. One such strategy is to re-position cereal from a breakfast food to an “anytime” convenience food that can be consumed as a snack or dessert.
- However, the market is stagnated due to the consumer's equal inclination towards traditional breakfast foods, which is therefor restraining the growth of the market.
Key Market Trends
Rising Demand For Ready-to-Eat Breakfast Cereals
Ready-to-eat breakfast cereals dominate the whole market owing to the convenience solution it offers to the consumers. The market is mostly driven by the consumers having a busy lifestyle as these are the processed grain formulations suitable for consumption without further cooking. Whole grain-based ready-to-eat cereals are leading the market owing to the value-addition in terms of micronutrients in these products. Also, the leading companies are trying to blend organic and healthy ingredients in order to boost the sales of breakfast cereals. In addition, the manufacturers are also utilizing traditionally grown cereal grains such as quinoa to create innovation in breakfast cereal products.
Expansion of Retail Channels to Drive The Regional Market
Convenience stores led the sale with a value share of 40%, which is followed by supermarkets/hypermarkets. Online retail sale constitutes a very small share in the market but is growing at a steady rate. Organic, natural and health claim on breakfast cereals offer a potential future for baked products. Furthermore, the expansion of retail distribution channels is another factor for rising sales in rural and tier-II cities. However, increased competition from artisanal, food service offering varieties of fresh breakfast affected the packaged breakfast cereals market sale in the region.
The South America market for breakfast cereals is fragmented, owing to the presence of large regional and domestic players in different countries. Emphasis is given on the merger, expansion, acquisition, and partnership of the companies along with new product development as strategic approaches adopted by the leading companies to boost their brand presence among consumers. Some of the key players dominating the regional market include Kellogg NA Co., The Quaker Oats Company, Marico, and Merchant Gourmet among others.
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