Ricardo Migueláñez. Agricultural Engineer @rmiguelanez
José María Vallverdú has presided over the association since last year. He is an economist and has a Master's Degree in Business Management from ESADE Business School, and he has spent his entire career in the agri-food sector. He is currently Managing Director for Iberia at Cereal Partners Worldwide, a joint venture between Nestlé and General Mills.
Ricardo Migueláñez.- Could you provide us with a quantitative analysis of the Spanish breakfast cereal market?
José María Vallverdú.- That market reports revenues of over 400 million euros in Spain, including cereal bars. We're talking about a very important sector. The market comprises few producers, among them Kellogg's and Siro (which makes private label products), as well as Nestlé (which has production facilities in Portugal) and Weetabix.
The market hasn't grown in terms of value in recent years. It experienced considerable growth until 2011, but consumption stabilized during the crisis. Nevertheless, it continues to be a category with significant scope in terms of distribution and considerable potential for development.
It's worth noting that it's a relatively new category for consumers, emerging in Spain around 30 years ago, and it's a very practical breakfast product: easy to prepare and relatively cheap. A bowl of cereal with milk can cost just 20 cents.
The most positive aspect is that, after a slight downturn, the sector has returned to growth.
R.M.- Cereals are one of the most basic parts of a good breakfast. What is their level of penetration in Spanish households?
J.V.- Although Spanish people say they eat a good breakfast, the truth of the matter is that people eat unhealthy products. The issue of cereals is a surprise, even for newcomers to the sector, because there is a penetration of around 70% in Spanish households. The challenge is to increase average consumption in each household. The 400 million euros in revenues I mentioned earlier is similar to the figure for roasted coffee sales in Spain.
R. M.- What are the current trends in terms of consumption?
J.V.- The trend is that an increasing number of people are eating cereal, although the number is still low compared with other countries, such as Portugal. It's a category which has a lot of potential if you know how to innovate correctly. In fact, I believe the sector will expand again as advertising provides an immediate response, and that's an important advantage. Children and young people are the main consumers, but we must get adults to continue to include it in their diet. With the exception of women, who prefer "light" products and, therefore, continue to be consumers, we still have to work on the adult male segment.
R.M.- Breakfast should be one of the main meals of the day. How important is breakfast cereal in terms of a healthy diet?
J.V.- Eating cereal for breakfast is vitally important for a balanced diet. The basis for a complete breakfast is milk, fruit and cereal, although there are also other options. But in Spain, people don't have time for breakfast, as they're in a big hurry in the morning. That's the main challenge we face. People say in polls that they have a healthy breakfast, but it's not really true. It's not enough to have just a coffee.
R.M.- Consumers are looking for increasingly specialized products adapted to their tastes and preferences or to specific moments. How has the industry adapted to consumers' new dietary needs?
J.V.- As regards the cereal segment, health-related products will be the most successful, for example, foods which are gluten free, which have fiber... The most difficult change has been to reduce products' salt and sugar content, make them more nutritious, with more wheat, more fiber, etc.
Another trend is cereal bars and snacks, as consumers increasingly want something they can eat on the go. It's about innovating products which make a lot of sense for the future, but which don't replace breakfast.
R.M.- With regard to obesity, one of society's main problems, which institutions should promote healthy habits?
J.V.- All associations, like ours, the industry in general, and especially governments. It should be something we do together, which should trickle down from public institutions to the industry, because there are many programs which surely would have a more far-reaching effect if we joined forces. We must continue to work together to resolve this issue.
R.M.- What actions have the companies in the Association rolled out in this regard?
J.V.- The companies in AEFC, and the association itself, promote products through tastings, inform on the benefits of cereals, and create specific health programs. Both Kellogg's and Cereal Partners have promoted eating breakfast with various programs aimed at consumers. This includes the "Health takes center stage" campaign by Nestlé, which is based not only on the consumption of healthy products, but also on sleeping well, eating right and exercising. In short, it's about living a balanced life.
R.M.- What are the sector's main strategies and what challenges does it face in the coming years?
J.V.- Getting all Spaniards to 1) eat breakfast, and 2) for it to be based on cereal, fruit and milk. The sector's main challenge is to get people to see cereal as a healthy, typical breakfast product which is increasing ingrained in our habits and is part of the Mediterranean diet.
The strategy must be based on innovating new products which meet consumers' needs. It's a very dynamic segment, which has scope to continue growing through innovation. In fact, it's experiencing growth of 3-4% per year, and that would be a good growth figure from now until 2020.