KANSAS CITY — Formulating with “fuel” and fruit are just a couple of ways that oatmeal manufacturers are looking to heat up the hot cereal category.
In the 52 weeks ended Dec. 31, 2023, dollar sales in the hot cereal/oatmeal category totaled $1.93 billion, up 2.6% from the same period a year ago, according to Circana, a Chicago-based market research firm. Unit sales, though, were down 7.1% in the period.
Of the top five vendors in the category, two of the five posted year-over-year dollar sales gains while only one of the five had a year-over-year increase in unit sales. The lone company to post a gain in both dollar and unit sales in the period was Kodiak Cakes, a Park City, Utah-based subsidiary of investment firm L Catterton.
Kodiak Cakes has an interesting history, having been founded a little more than 40 years ago. The company spent the next 30 years as a fairly small player, but an appearance on the television show “Shark Tank” in 2014 breathed life into the business. Then, in 2021, private equity firm L Catterton acquired a majority stake, a move that has provided yet another push to the business. Shortly after its acquisition by L Catterton, Kodiak Cakes debuted a portfolio of products geared toward children: Kodiak Cubs. That line includes oatmeal featuring non-GMO ingredients and no artificial flavors or additives.
More recently Kodiak formulated an oatmeal specifically to fuel performance. Kodiak Peak Oatmeal packs “more protein and fiber with less sugar compared to other Kodiak oatmeal,” the company said. Kodiak said Peak Oatmeal was developed with input from professional athletes across multiple sports and comes in larger packets to provide longer, more sustaining nourishment. Peak Oatmeal is available in three flavors: banana nut, berries and cream, and maple and brown sugar. The oatmeal has a suggested retail price of $5.99 for a 4-pack.
“Our 2023 innovation is helping in driving growth, most notably the new Peak line,” said Cory Bayers, chief marketing officer, Kodiak. “All Peak flavors are over 50% incremental to Kodiak, and over 23% to the category and are quickly becoming one of the top turning items in the portfolio.”
In Circana’s most recent data for the 52 weeks ended Dec. 31, Kodiak Cakes had dollar sales of $73 million in the hot cereal/oatmeal category, up 8.9% from the same period a year ago. Unit sales were 17.67 million, up 1% from a year ago.
“We would attribute the growth to strong distribution and strategic partnerships with key retailers such as Walmart and Kroger,” Bayers said.
With a dominant 57% share of the hot cereal/oatmeal category, the Quaker Oats Co., a subsidiary of Purchase, NY-based PepsiCo, Inc., plays an important role in the overall performance of the segment. In the 52 weeks ended Dec. 31, hot cereal/oatmeal dollar sales at Quaker were down 0.2% from the same period a year ago while unit sales were down 10.5%.
Quaker has introduced many iterations of its instant oatmeal over the years, from high fiber versions to protein versions to organic and gluten-free versions. Most recently the company debuted Fruit Fusion instant oatmeal. Available in strawberry peach, raspberry strawberry and blueberry blackberry varieties, Fruit Fusion oatmeal contains fruit pieces, whole grain oats and is considered a good source of vitamin C, vitamin D and zinc. Fruit Fusion gives “a glow up” to the Quaker Instant Oatmeal product line, Quaker said.
Quaker also has turned to its ready-to-eat cereal portfolio for ideas on how to spark hot cereal sales. The company’s Cap’n Crunch cereal recently found its way into the oatmeal category with the launch of Cap’n Crunch Instant Oatmeal made with Quaker Oats. The oatmeal includes an additional cereal topping packet “for that extra delicious crunch,” according to Quaker.
The move by Quaker to bring its cereals into the instant oatmeal categories comes a few years after General Mills, Inc., Minneapolis, made a similar move. Big G Instant Oatmeal has been available in four varieties — Lucky Charms, Cinnamon Toast Crunch, Trix and Cocoa Puffs — since June 2021. In the 52 weeks ended Dec. 31 dollar sales of General Mills hot cereal/oatmeal were $4.23 million, down 60% from the same period a year ago amid a 54% decline in unit sales, according to Circana.