Yogurt now No. 2 for Breakfast

Cereal consumption continues to wane


NEW YORK -- Yogurt, especially the Greek style, is now the second-biggest seller in the breakfast-food market as Americans seem to be losing their taste for traditional cereals, according to a Today Money report.

Cold cereal is still the No. 1 choice for breakfast in America, with sales topping $9 billion over the last year, but the Greek-yogurt craze has helped propel the fermented milk product to the No. 2 position at nearly $7 billion in sales.

"Five years ago, (Greek yogurt) was a novelty in this country," said John Baumgartner, an analyst who monitors food sales for Wells Fargo Securities.

"Now Greek is about 40%," he said, adding that the breakfast table will only get more competitive as new players vie for a "share of stomach."

And that means traditional cold cereals, which have seen a 7% drop in sales volume in the past four years, are going to have to step up to the plate (or bowl).

"Cereal sales have gotten squeezed over the past several quarters," said Erin Lash, who covers the food industry for Morningstar.

Last quarter Kellogg reported a 3% drop in revenues for its morning foods unit, while General Mills' cereal division reported a 2% drop.

"Not all consumers choose a bowl of cereal and milk," Kellogg said in a statement. "For them, we're developing foods that provide the benefits of cereal in portable and convenient formats."

Those new "formats" include breakfast bars and shakes. Sales of Kellogg's Pop Tarts are holding up well, and General Mills' granola sales jumped more than 40% in a month, according to Nielsen. But both have been playing catch-up to the Greek yogurt craze.

Also in the mix are the fast-food chains, which offer breakfast for Americans with no time to sit down at the kitchen table in the morning. Taco Bell is rolling out a national breakfast menu, and McDonald's has started serving "Breakfast after Midnight" at some of its 24-hour stores.