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Natural Foods Merchandiser

New nutrients, exotic flavors make cold cereals hot

Natural cereal manufacturers are looking back—way back—to old favorites, ancient grains and crucial nutrients to help bring their A games to an industry no longer dominated by Os. Natural and organic cold-cereal sales reached $5.6 million, up 13.4 percent from the previous year, according to SPINS, a Schaumburg, Ill.-based market research and consulting firm for the natural products industry. And though the results may be crunchy, cold cereals aren’t getting stale.

"There’s a synergy between what consumers are demanding and what producers are coming out with," says Kara Berrini, Whole Grains Council program manager.

Richmond, British Columbia-based organic manufacturer Nature’s Path emerges with new formulas to maintain its 26 percent growth. So what’s the latest ingredient for rising above breakfast competition? Bread, the most popular breakfast food and the company’s first product in 1971, according to Nature’s Path Marketing Director Maria Emmer-Aanes. "Cereal is actually like tiny pieces of bread," she says. "Each flake is a little slice."

"The consumers moved toward us," Emmer-Aanes says of increased demand for healthy, innovative breakfasts. Needless to say, manufacturers are thinking outside the cereal box. Here are more ways they’re reeling in consumers.

Cereal’s new Os pick up the flax

"People are looking for health benefits in addition to cereals being natural," says Needham, Mass.-based U.S. Mills President Chuck Verde. "There’s an emphasis on ingredients and the nutrients they provide." Flaxseeds contain omega-3 fatty acids, which are on producer and consumer radars, Verde says. "A product can’t just say, ‘Buy me because I’m organic.’ We have to focus on other reasons for being."

Flax cereals stood out in the natural foods industry this year, with sales up 34.2 percent, according to SPINS. "We started the Flax Plus sub brand in 2001 before flax was in favor," Emmer-Aanes says. Now Barbara’s Bakery’s Ultima Organic Flax and Granola, and Nature’s Path’s latest Flax Plus Crunches offer 500 to 800 milligrams of omega-3s. Nature’s Path tentatively plans to introduce four flax products next year, says Charles Tremewen, the company’s brand manager.

People are coming back to granola like they did in the ’60s.

Granola and flakes are groovy

If flax is this year’s health must, granola is its lust, according to Emmer-Aanes. "Granola is all the rage," she says. "People are coming back to it like they did in the ’60s." Granola sales are up 27.5 percent, according to SPINS. And producers ensure the pantry staple stays fresh with the 34 natural and organic granolas that launched this year through August, reports research firm Mintel International.

"We want to keep offering variety in tastes, textures and ingredients to make eating our products a fun experience," says Ryan Therriault, Bear Naked senior manager of brand marketing and innovation. Bear Naked has two U.S. Department of Agriculture-certified organic hot cereals. But for its signature granolas, unique flavor combinations and competitive prices take precedence. "We aren’t willing to sacrifice taste," Therriault says. The La Jolla, Calif.-based company’s pursuit of the exotic continues with its Native line’s all-natural, antioxidant-rich flavors like Yumberry Goji Currant and Mango Agave Almond.

This year, Minneapolis-based Cascadian Farms expanded its granola range with fruit and nuts and introduced the first organic dark-chocolate granola. Nature’s Path’s and Peace Cereal’s granolas also feature fruit and offer hybrids. Call it "crisp." Call it "crunch." Mixed granola is the top texture. "People are loving this combination of granola and flakes," Emmer-Aanes says.

Whole-grain, reduced-sugar and gluten-free labels deliver The Whole Grain Stamp first appeared in 2005. "Hot cereals were the ones commonly with whole grains, whether steel-cut, rolled or flaked," Berrini says. "That changed with a general awareness about what’s in food. Consumers are so savvy now."

More hot cereals than cold cereals still may have the stamp, but this year they claimed only 30 additions, while cold cereals raked in 120 more, an 86 percent increase, Berrini says. The Basic Stamp requires 8 grams of whole grains and the 100 Percent Stamp demands at least 16 grams (all of them must be whole, too). "It’s not unusual for Basic Stamps to show 27 grams of whole grains," Berrini says.

Bear Naked’s Fit line highlights other nutritional perks: 3 grams of sugar and 3 or fewer grams of fat. "We’re focused on the presence of natural positives and taking away negatives," Therriault says. Other manufacturers are even stripping negatives from notoriously sugary children’s cereals. "Kids ate cereals with 20 to 30 grams of sugar," Emmer-Aanes says. "Then people started making smarter choices."

U.S. Mills’ Verde, who oversees five brands, including New Morning and Erewhon, and dozens of organic and nonorganic products, says natural manufacturers sample mass-market kids’ trends while adjusting nutritional values. "Organic and natural tends to lead in niche areas like exotic and gluten-free," Verde says. "But the organic market is starting to mirror trends in conventional foods, too."

Nature’s Path’s Gorilla Munch and New Morning’s Cocomotion have the appeal of 20 grammers (catchy names and sweet flavors) but with fewer than 10 grams—rather than 20—of sugar. "Now when people read labels, they realize what a gram means," Berrini says. "Every 4 grams is like letting your child dump a teaspoon of sugar in the bowl."

But it’s not just staple whole grains—this year, cereal makers focus on the ancients.

Natural kids’ cereals aren’t just for kids, either. "A big draw to our EnviroKidz cereals is they’re gluten-free, making them extremely appealing to adult consumers," Emmer-Aanes says. Manufacturers responded to the increased celiac-disease and gluten-intolerance diagnoses, says American Dietetic Association spokeswoman Dee Sandquist, R.D. "Some organic companies can change one ingredient and become gluten-free," she says. "And consumers go to grocery stores asking for gluten-free products, which raises awareness."

Sales of U.S. Mills’ gluten-free cereals grew more than 20 percent, prompting the company to focus on gluten-free product development for 2009. U.S. Mills isn’t alone, according to Berrini. "At an ADA conference one year ago, there was a small section dedicated to gluten-free products," she says. "This year, there were two gluten-free pavilions."

Taking it back to the ancient school

Bear Naked’s principle is, "If it was good for you 100 years ago, it’s good for you now, and will be good for you in 100 years," Therriault says. Berrini also contends some trends, like whole grains, stick. But it’s not just staple whole grains—this year, cereal makers focus on the ancients.

"Sacred whole grains," as Emmer-Aanes calls them, such as quinoa, compete alongside nonorganic items in grocery stores, Berrini says. Other ancients include amaranth and kamut. "Mayans and Incans used certain grains for ages. They were part of cultures long before American and European, and now they’re incorporated into more and more modern products."

Whether deliberating between old and ancient, crisp and crunch, flax and kids’ packs, "don’t rule out the unexpected," Berrini urges. With more than 2,000 whole-grain [cereal] products, "there’s something for everyone," she says.

Jessica Rubino is a Boulder, Colo.-based freelance writer.

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