As highlighted in Euromonitor International's new-look 2007 Breakfast Products Global report, Cereal Partners Worldwide, a joint venture between Nestlé and General Mills, has successfully tapped emerging market growth to expand its value share of the global breakfast cereals market from 6.4% to 8.3% over the 2001-2005 period.
Cereal Partners Worldwide has performed best in developing markets such as Russia and China, where market leader Kellogg has not yet established a strong presence.
In the former, it grew its retail value share of breakfast cereals from 7.6% to 12.7% between 2001 and 2005, moving from fourth to second in the rankings, while in the latter, it entered the market in 2004 with a market share of 25.2%, which fell marginally (by 0.1 percentage points) the following year, establishing it as the market leader.
Although the Russian and Chinese markets are still relatively small in global terms (with US$263 million and US$71 million of sales in a US$23.4 billion global industry), they are growing rapidly.
Moreover, per capita consumption rates are still very low (particularly in China), leaving considerable scope for future growth.
Cereal Partners Worldwide entered the Chinese breakfast cereals market in 2004, when it opened a manufacturing facility in the city of Tianjin, and it has relied on a combination of strong branding and intensive marketing to gain market share, particularly in children's cereals, where its market share stood at 60% in 2005.
With most indigenous players in breakfast cereals still evolving, they tend to have limited marketing budgets and find it very difficult to compete.
All of Cereal Partners Worldwide's breakfast cereals are marketed under the name “Que Cao”, which means bird's nest in Mandarin.
Children's cereals accounted for 29% of all Chinese breakfast cereals sales by value in 2005, not significantly different from the global figure of 30%.
However, adult breakfast cereal consumption is growing at a faster rate than that of children, which may also put pressure on the overall market shares of Cereal Partners Worldwide in China and globally.
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