Childhood Cereal Is Getting A Healthy Makeover & We Are Here For It
Cereal might the ultimate nostalgic treat—almost everyone can conjure up a childhood image of sitting around a kitchen table with a bowlful. It's also often the first thing to be eliminated when people begin to eat healthier. Because cereal is rife with sugar, artificial colors and flavors, and super-processed grains, it used to be hard to make an argument for cereal as part of a nutritious diet.
"Even all the so-called healthy cereals were still just sugary desserts masquerading as health foods. They might have replaced GMO corn flour with organic corn flour, for example, or added in a couple of measly grams of soy protein, but ultimately these were just incremental improvements on the even less healthy cereals that preceded them," explains Gabi Lewis, co-founder and co-CEO of Magic Spoon, a high-protein, low-carb cereal that's beloved by mbg collective member and class instructor Kelly LeVeque. "And so most people who cared about their health simply stopped eating cereal. They grew up, but their cereal never grew up with them."
That is, until now.
The health food world has finally reached the beloved cereal aisle, with innovative brands giving the breakfast food a much-needed makeover.
"The cereal category has always been dominated by sugary, grain-filled options with suboptimal ingredients," explains Margaret Wishingrad, founder of Three Wishes. They spent two years working on the recipe for their wheat, soy, oat, rice, and peanut-free vegan recipe. Their simple ingredients (one type contains just four, including salt) and legume base have won over customers. "We just launched in October and have sold out of cereal at several of our retail partners multiple times," says Wishingrad.
The secret to the booming market is creating cleaner ingredient lists without sacrificing flavor. "The healthy cereal market has exploded because there are, for the first time, actually healthy options that taste great," says Krishna Kalianna, the founder and CEO of Catalina Crunch, a company that makes grain-free, keto-friendly cereals. "Traditional 'healthy' cereals aren't healthy at all—they are a 'carb bomb' dressed up in smart marketing—and they taste like cardboard." Catalina Crunch differentiates itself with its decadent flavors, including Cinnamon Toast and Dark Chocolate, and their strategy is clearly paying off. "Sales are up over 1,000% this year and into the seven digits monthly," says Kalianna. "We're selling close to one million a month in times when traditional cereal brands are reporting a decrease in sales." Indeed, the sales of cold cereal totaled $8.49 billion last year, down 6% from five years earlier.
The ability to eliminate the middleman and find out exactly what customers really want has changed the game. "Previously, legacy brands dominating the cereal industry did not have a direct relationship with their customers and were therefore out of touch with the needs of the health consumer for options that were not only lower in carbs and sugar but also made for today's on-the-go lifestyle," says Helen Guo, co-founder of The Cereal School, which makes zero-sugar, keto-friendly puffed balls in fun flavors like Fruity, Cocoa, and Peanut Butter. "As a direct-to-consumer brand, we're laser-focused on talking to our customers and truly understanding what they want. Before we launched, we spent months talking to tens of thousands of potential customers so that we could create a product that addressed their pain-points and fit into their lifestyle." Their ability to cater to consumers' needs has paid off to the tune of over 100,000 completely direct-to-consumer customers, in just a matter of months.
In 2020, we'll continue to see the healthy cereal expand, as many adults realize they can have the joy of their favorite childhood food while adhering to the nutritional goals of their grown-up lifestyle. All of those adults reembracing cereal will lead to flavor innovation, with varieties that embrace more sophisticated, experienced taste buds. "Adults have more developed palates than children, so we're going to see a profusion of more adult flavors, similar to what Halo Top did in the ice cream market," explains John Durant, founder of the Wild Ventures venture capital fund and an investor in Magic Spoon. We'll raise our bowl to that.
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