No grains: Increasing competition and pricing pressures will impede industry revenue growth

Overall economic conditions have largely guided the volatile performance for the Cereal Production industry over the past five years. As the economy continued to recover and per capita disposable income increased, people with relaxed budgets and less time returned to costly breakfast habits of obtaining food on the run at cafes or coffee shops. Over the next five years, revenue performance in the industry is forecast to improve compared with the previous five-year period. As the economy continues to recover, per capita disposable income is anticipated to increase, resulting in mixed demand for cereal products. This will enable consumers to spend more on expensive, branded products...purchase to read more.

Industry Statistics & Market Size
Revenue
$10bn
Annual Growth 12-17
-3.3%
Forecast Growth 17-22
Profit
Employment
12,110
Businesses
68

Industry Threats & Opportunities

  • Cereal makers will look to healthful and convenient options to help offset competition
  • Despite a decrease in grain prices, poor demand and higher production costs will reduce profit
  • More spending money will allow consumers to dine out more, hampering revenue growth
  • Industry Report - Industry Investment Chapter

    Cereal production requires substantial capital investment, which leads to a moderate capital intensity. However, the level of capital intensity varies considerably with the size of the manufacturer. Small to medium-sized facilities have a low capital-to-labor ratio because they lack the resources to invest in expensive technology and equipment, and they have to employ more labor to increase production volumes. For every dollar spent on wages, operators spend an average of $0.19 in capital investment.Modern manufacturing plants require high capital expenditure on advanced technology and equipment that aim to increase productivity without the need for additional labor. Thi...purchase to read more.

    Additional Insights for the Cereal Production Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cereal Production Industry are

  • Ability to adapt to change
  • Ability to pass on cost increases
  • Product differentiation
  • IBISWorld analysts also discuss how external factors such as Demand from supermarkets and grocery stores and Demand from grocery wholesaling in the Cereal Production industry impact industry performance..

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    What's in this report

    What is the Cereal Production Industry?

    Operators in this industry acquire raw materials such as corn, wheat, flour, sugar, malt extract and rice that are processed into ready-to-eat and hot cereals. They also purchase raw materials, such as plastic and paperboard containers, from other manufacturers for packaging purposes. The finished breakfast cereals are subsequently sold to grocery wholesalers, retailers and food service providers. Energy, cereal, granola and protein bars are not included in this industry.

    Industry Products
  • Ready-to-eat corn breakfast foods
  • Ready-to-eat wheat breakfast foods
  • Other ready-to-eat grain breakfast foods
  • Hot Cereals
  • Industry Activities
  • Manufacturing ready-to-eat cereal
  • Manufacturing oatmeal
  • Manufacturing other hot cereal foods
  • Manufacturing other breakfast cereal foods
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from supermarkets and grocery stores
  • Demand from grocery wholesaling
  • Per capita disposable income
  • Demand from fast food restaurants
  • World price of wheat
  • Price of coarse grains
  • Price of corn

  • Current Performance
  • Mixed demand
  • Falling profit
  • Pricing pressures
  • Chart: Revenue Growth

  • Industry Outlook
  • Consumer trends
  • Industry structure
  • Table: Cereal Production Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cereal Production Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Grocery Wholesaling
  • Supermarkets & Grocery Stores
  • Convenience Stores
  • Food Service Contractors

  • Key Selling Industries
  • Baking Mix & Prepared Food Production
  • Canned Fruit & Vegetable Processing
  • Corn Farming
  • Corn, Wheat & Soybean Wholesaling
  • Flour Milling
  • Seasoning, Sauce and Condiment Production
  • Sugar Processing
  • Wheat, Barley & Sorghum Farming

  • Products & Services
  • Other ready-to-eat grain breakfast foods
  • Ready-to-eat corn breakfast foods
  • Ready-to-eat wheat breakfast foods
  • Hot Cereals
  • Chart: Cereal Production Industry Products and Services Segmentation

  • Demand Determinants
  • Household disposable income
  • Changing consumer lifestyles
  • Product innovation
  • Pricing and the presence of substitutes

  • Major Markets
  • Supermarkets and convenience stores
  • Grocery wholesalers
  • Food service providers
  • Exports
  • Chart: Major Market Segmentation for the Cereal Production Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesMarketingOther
  • Chart: Cost Structure Benchmarking – Sector vs Cereal Production

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cereal Production Industry

  • Industry Globalization
    General Mills Inc., Kellogg Company, Post Holdings Inc., PepsiCo Inc.,
  • Table: General Mills Inc. - financial performance
  • Table: Kellogg Company - financial performance
  • Table: Post Holdings Inc. - financial performance
  • Table: PepsiCo Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Cereal Production Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Cereal Production Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)
  • Price of coarse grains (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Private Label
  • Products sold as the house brand of a particular supermarket or retail chain, rather than the specific manufacturer.
  • Ready-To-Eat Cereal
  • Cereal or cereal products that are prepared in advance and are ready for consumption. Examples include cold cereals and minute-ready oatmeals.
  • Wholesale Bypass
  • A popular trend within retail and manufacturing industries where producers supply goods directly to stores, eliminating the middleman.
  • What Our Customers Say

    Why buy this report?

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    This report on Cereal Production:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cereal Production market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

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