"Should We Make Mala-Flavored Cereal?" ... 20th-Century "Healthy Breakfast Staple" Makes a Bitter Exit [Why&Next]

South Korea's Cereal and Fruit Juice Markets Continue to Shrink
Consumers Turn Away Amid Growing Concerns Over Carbohydrates and Sugar
Companies Expand Options with Zero-Sugar Products and Whole Ingredients

"There have even been suggestions to make and launch mala-flavored cereal."

Cereal and fruit juice, once considered quintessential "healthy breakfast" items, are being overlooked as the healthy and wellness food trend gains ground. As concerns over carbohydrates and sugar rapidly shrink the market, some are even asking whether companies need to launch unusual products to catch consumers' attention. Industry players are responding to the trend with more zero-sugar and granola products, but concerns are growing that it will be difficult to gain a competitive edge.

Pixabay

Pixabay

According to MarketLink data cited and released on October 9 by the Korea Agro-Fisheries & Food Trade Corporation (aT) through its FIS Food Industry Statistics Information service, cereal sales at retail stores fell 27% over the past three years, from 231.7 billion won in 2022 to 169.8 billion won last year. Given that retail cereal sales from January to April this year totaled 52.7 billion won, down more than 10% from the same period last year, annual sales are forecast to fall below 150 billion won this year.

Retail sales of fruit and vegetable beverages, a category that includes fruit juice, also declined for the second consecutive year in 2024, reaching 488.9 billion won last year. Sales of fruit and vegetable beverages at retail stores from January to April this year were also down 10% from the same period last year, and the market is expected to contract further on a full-year basis.

Cereal and fruit juice were once among the leading foods in 20th-century healthy diets. In the United States and Europe, people traditionally started their mornings with fatty foods such as meat and sausage. Cornflakes, a processed grain product, were developed as a healthier alternative, and cereal rose to prominence as a health food. In the mid-20th century, orange juice began to be mass-produced at low cost, bringing fresh, nutritious fruit juices rich in vitamin C and other nutrients to the breakfast table.

However, as research findings on blood sugar poured in from the 2000s onward, awareness grew of the need to manage carbohydrate and sugar intake, and the markets for cereal and fruit juice contracted in tandem. Cereal sales briefly rebounded as the COVID-19 pandemic spurred the spread of remote work and other changes, but the category has since lost ground to competitors and appears unable to find a way out of its slump. Fruit juice is also losing out with consumers, in part because of the expansion of low-cost coffee chains.

Sales of core products in both the cereal and fruit juice categories have in fact declined. Post, Dong Suh Foods' top-selling cereal brand in South Korea, generated more than 100 billion won in retail sales as recently as 2020, but sales have since fallen, reaching 76.8 billion won last year. Lotte Chilsung Beverage, which makes Del Monte, the top-selling fruit and vegetable beverage brand in South Korea, has also seen its total juice sales drop sharply, from 90.9 billion won in the first half of 2023 to 77 billion won in the first half of 2024 and 75.2 billion won in the first half of this year.

Cereal and fruit juice manufacturers have also been rolling out new products to match recent trends. Some use alternative sweeteners such as allulose instead of sugar, or launch products with no sugar at all. Others use superfoods or whole ingredients in their grain products. They have also introduced cup-shaped cereal for convenience and small-format fruit juice products that can be finished in one sip.

The three leading players in South Korea's cereal market—Dong Suh Foods, Nongshim Kellogg and Orion—have launched a total of 20 new products in the past three years alone. Around the time of the COVID-19 pandemic, granola, considered a healthier ingredient, began gaining ground over cornflakes, which had been popular for many years. Granola is a type of cereal made by mixing grains and nuts with sugar, honey or oil and baking them in an oven.

However, interest in granola has also waned recently, and its retail sales are now similar to those of chocolate cereal and cornflakes. By cereal type, chocolate cereal accounted for the largest share of sales last year at 31%, while granola and flakes each accounted for 28%.

Fruit juice makers are also diversifying their product ranges with options such as 100% juice and low-juice-content drinks, expanding their ingredients beyond orange and grape to include mango and apple, and introducing smaller packages. A Lotte Chilsung Beverage representative said, "The market as a whole is contracting due to concerns about sugar. We are working to respond nimbly to consumer demand and increasingly segmented preferences."

The growing number of consumers skipping breakfast also appears to be accelerating the market's contraction. According to the Korea Disease Control and Prevention Agency's 2024 Korea National Health and Nutrition Examination Survey, 35.3% of people aged one and older skipped breakfast last year. That means more than one in three people skipped the meal. The share of people who do not eat breakfast has risen steadily every year, from 26.2% in 2015, an increase of 9.1 percentage points over 10 years.

Competition among food and food-service companies to win consumers' breakfast choices is also intensifying. As more consumers substitute coffee for breakfast, coffee chains are selling sandwiches, bread and other foods alongside their drinks. Burger chains, including McDonald's, Burger King and Lotteria, are also expanding their morning menu offerings for commuters. With the importance of protein intake growing, many more consumers are seeking foods such as eggs and protein shakes.

As a result, industry observers say conditions are making it difficult for cereal and fruit juice to find a place on the breakfast table. An industry official said, "In the past, demand from children who ate breakfast was substantial. But with the low birth rate continuing and market trends changing, we are developing product strategies focused on convenient, health-oriented foods for adults. We are responding by expanding consumer choices, considering nutritional balance, and diversifying flavors and textures."

This content was produced with the assistance of AI translation services.