Despite talk of rising demand for healthy foods, sugar is still a sweet spot for breakfast cereal marketers. More evidence comes with the recent introduction of two cereals from Post Consumer Brands featuring tiny donuts and honey buns.
The cereals, Hostess Donettes and Hostess Honey Buns, are based on baked goods from Hostess Brands. Post is counting on the Hostess name to evoke feelings of nostagia as it looks to boost its presence in the cereal aisle. The cereals, which began hitting shelves in early 2019, are aimed at families with children, particularly parents eager to share with their kids a cereal that reminds them of a breakfast treat or snack they enjoyed during their own childhoods.
Sure, a doughnut or honey bun served in tiny cereal form is cute, and the marketing is meant to reflect that. Even if they clearly aren't the healthiest way to start the day, the cereals are lower in calories and sugar than the Hostess sweet baked goods products they represent. And in today's declining cereal market, buzzworthy brands served with a hint of sentimental longing and slight indulgence are the perfect combination to appeal to retailers eager to get people excited about buying packaged foods.
"For us, nostalgia is a big piece of this relationship with Hostess, because we know that consumers are looking to share those great flavors and things that they grew up with, with their families," says Josh Jans, brand manager at Post Consumer Brands. "Hostess has such iconic brands underneath their names that we felt it would be great to utilize those to really bring some of these flavors to life."
Hostess Brands, meanwhile, is putting more emphasis on breakfast products in its own lineup, a move that could aid brand awareness for its baked goods as well as the cereals Post makes under a licensing agreement.
The cereal introductions come after years of tinkering at cereal marketers looking to keep people interested in cereal at all. The broader cereal industry is experiencing sales declines even as many of the big brands known for sweetness are posting gains. U.S. retail sales of ready-to-eat cereal fell 1 percent to $8.5 billion in the 52 weeks ended Jan. 27, according to data from IRI, a Chicago-based market research firm. Honey Nut Cheerios, the top-selling cereal in America, saw sales fall 5.8 percent in the period.
Still, there are pockets of strong growth, including some of the sweeter-sounding cereals.
"In spite of, or despite, what the consumer says about the move to health and wellness, there will always be a market for sweet and indulgent products," says Rabobank executive director Nicholas Fereday. He points out that other brands such as Mondelez's Oreo have crossed over into breakfast cereal "to varying degrees of success."
Post's cereal lineup allows it to attract those looking for something with a bit of a healthier profile (Bran Flakes, anyone?) and those craving a sweet treat for breakfast or a snack (such as Pebbles). Along with the Hostess cereals, it also makes cereals based on Mondelez International Inc. brands such as Chips Ahoy, Oreo and even Sour Patch Kids.
Post's Fruity Pebbles was the only brand in the top 10 with a double-digit percentage gain, 13.5 percent, IRI data show. (Fruity Pebbles and Honey Nut Cheerios each have 9 grams of sugar per serving.) Meanwhile, Post's larger Honey Bunches of Oats brand saw sales rise 1.7 percent.
Hostess Donettes cereal contains 150 calories and 13 grams of sugar per 1 cup serving, and dextrose (aka sugar made from corn) is the first ingredient, followed by sugar. And sugar is the first ingredient in Hostess Honey Buns cereal, which has 110 calories and 14 grams of sugar per 3/4-cup serving.
The marketing approach
The miniature, crunchier versions of the Hostess treats are getting a big digital push focused on their tiny size. The campaign from Argonaut, which breaks Monday, suggests the tiny cereals are even made in a tiny factory, playing off the popularity of tiny things such as tiny houses.
When Argonaut's team first tried the cereal, "it really did feel like truly a tiny version, a shrunk down version, of the original," says Hunter Hindman, co-founder and chief creative officer.
Sticking with that idea, the agency came up with a 1/12th scale bakery for the ads. Features include a functioning conveyor belt, a powder sugar coating area and even a break room. "We 3D printed the entire bakery, from the facade to the interiors," says Hindman.
The tiny trend will continue with different aspects of the marketing push. For example, Argonaut says it is working with some "tiny food influencers" (yes, they exist) on social content.
Post works with Spark on media.