Rise and shine

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With double digit growth and few signs of slowing, producers and distributors of breakfast cereals are optimistic about the Middle East.

Breakfast cereals might be a standard part of the Western diet, but in the Middle East the category remains in its infancy. With the sector developing rapidly, Retail News Middle East talks to three industry insiders about the latest trends in the sector and prospects for the future.

RNME: How is the sector growing in the region? What level of growth are you seeing?

Clouston: The Ready To Eat Cereal (RTEC) category in the Middle East continues to deliver double digit growth both in volume and value. The Kellogg brand is a huge contributor to the category as a whole and therefore matches category performance in most countries. Regionally our growth is approximately 17% in volume terms on a MAT basis.

Tolsma: The sector is doing very well in the region - you assume double-digit growth in any market. People are becoming more interested in health issues and nutrition in general and cereals is one of the categories where people are really seeing the benefits coming from health. Most people in this part of the world, just like anywhere else, know that breakfast is the most important meal of the day because you have been fasting for the night. If you look at the options, a lot of people don't eat breakfast at all...mothers view cereal as a good way of ensuring their children get a good nutritious meal.

Sharpe: The sector is thriving. We are seeing growth of around 30%.

RNME: What do you think is driving the growth?

Clouston: There are several factors driving the RTEC category growth. Firstly the category is still in its infancy when compared to other developed markets with an abundance of new users off a smaller base. Secondly, the higher awareness of health and obesity issues prevalent in the region is driving consumers to consider healthier options to supplement their diets. Breakfast and in particular cereal forms a large part of a well balanced diet. Furthermore the increased exposure to western media helps to educate people about alternative breakfast options.

Sharpe: This is being driven by the opening of several major A-class hypermarkets targeting professional local communities, in addition to traditional expat communities. These provide a platform and huge potential for high quality British brands such as Jordans, which were previously not recognised in the Middle East.

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