Cereal, OJ and Coffee for Breakfast? Not So Much Anymore

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Breakfast in America is undergoing some major changes. The popularity of cold cereal has gone mushy. Orange juice sales are at an all-time low. Home-brewed coffee consumption is weak.

There's also been a significant shift in how we eat breakfast. The demands of work and parenthood mean we average just 12 to 13 minutes on breakfast. Some people are looking for a better nutritional balance -- more protein and less sugar -- and for others, breakfast has become a collection of snacks.

Fruit, yogurt (especially Greek yogurt), breakfast bars, breakfast sandwiches and toaster pastries are in. "They're the new convenient breakfast," said Harry Balzer, chief food industry analyst at NPD Group. "Only yogurt needs a spoon. The rest are eat as is. You don't even have to sit down."

The Fast Food Version

Fast food chains are trying to capitalize on our desire to eat fast and eat on the run. In fact, breakfast is the only segment of their business that's growing. As a result, many chains are introducing items for the breakfast crowd. Taco Bell (YUM) has the Waffle Taco, and Dunkin' Donuts offers an eggs benedict sandwich. Burger King (BKW) just spent $11 billion to buy the Canadian doughnut and coffee chain Tim Hortons (THI), partly to capture more of the breakfast market. Of course, industry giants McDonald's (MCD) Starbucks (SBUX) and Subway added breakfast years ago.

"Even when you eat out, breakfast is relatively inexpensive," according to Phil Lempert, editor of supermarketguru.com. "People like to eat out, and breakfast is a cheap and convenient way to do it."

Too Much Sugar?

The changes in our breakfast habits are having a huge impact on some food and beverage industry giants. Kellogg (K), the nation's leading cereal maker, recently reported a 16 percent drop in quarterly earnings, and General Mills (GIS), the second largest cereal maker, is also struggling. Sales of cold cereal fell by 5 percent in the second quarter from a year ago. According to Balzer, cereal consumption peaked in 1996, when 38 percent of all Americans started their day with a bowl of cereal. That's down to 29 percent now.

The slump in sales of orange juice has been even steeper. Nielsen reports sales dropped 9 percent in July from a year ago and 39 percent from a decade ago, to the lowest level since it began tracking the numbers in 2002.

Not that long ago, a bowl of cereal and a glass of OJ was considered a healthy meal, but recent attention on the high level of sugar in both has hurt their image. OJ sales are also being hurt by the high price, partly because of a supply shortage. The average price for a gallon of orange juice has soared to about $6.45. Forecasters expect Florida's orange harvest to be the smallest it's been in about 50 years.

Orange juice sales have also been squeezed by greater competition from sports and energy drinks, water and other juices. "We're seeing more exotic juices, two or three fruits mixed together," said Lempert. "It's more interesting from a flavor profile as well from a health profile."

Coffee consumption has had a bit of a revival after many lean years, helped by the growing popularity of single-serve coffee pods, even though some experts say that trend may be leveling off.

Produce and Protein?

The trend of fast, easy and more nutritious is likely to continue. "The next generation of fast food at home and eating out could be to include more produce," according to Lempert. "That will help from a nutritional standpoint." He says many people are also looking to add more protein at the start of the day by including nuts, tofu and meat.

Despite all of the changes, we haven't given up on the traditional breakfast altogether, and cereal makers are reformulating products to add protein and fiber and reduce sugar. "Most of us will still have cereal sometime in the morning in the next few weeks," said Balzer. "What's changed is the frequency."

13 Ways Beyond Coupons to Save on Groceries
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Cereal, OJ and Coffee for Breakfast? Not So Much Anymore
The best deals of the week go to loyalty card users. These items often include what are known as "loss leaders" -- items sold at little or no profit for the store. Why do stores do this? To draw you into the store, with the hope that you'll pick up other items as you shop. Some stores also reward you for spending more. Safeway (SWY) and Stop & Shop offer discounts at partner gas stations. Deals are also advertised in the weekly circular, and you can scan those savings onto your smartphone through apps such as Spoofee.com or SundaySaver.com.
You might like to see and feel every apple or potato you put into your shopping cart, but you can save as much as 36 percent by buying bags of produce. The same is true for multipacks of grocery items such as soap, toilet paper, soda and yogurt, especially at stores such as Walmart (WMT) and Target (TGT).
Many popular deli meats and cheeses sliced fresh at the deli counter may cost less than the pre-packaged variety. SmartShop found the same brands (including Boars Head and Alpine Lace) as much as 30 percent cheaper at the deli counter. You also get to buy the exact amount you need, reducing potential waste.
These racks, usually found in the back of the store, include a hodgepodge of items marked down by as much as half. That's because there is an imperfection in the packaging or the item is being discontinued. Check the expiration date to make sure that you're not buying something that's been sitting on the shelf too long.
Several new subscription services rival Amazon.com's (AMZN) Subscribe & Save service. ShopSmart likes FamilyCircle.com, Plated.com and Target Subscriptions. FamilyCircle.com offers organic produce and seasonal items that can be shipped to your home weekly. It's only available in Washington state, Idaho, Alaska and San Francisco, but there are plans to expand. Plated.com provides measured ingredients to make a chef's recipe from scratch. Target offers household and personal care items at a 5 percent discount (10 percent for REDCard holders). It also offers food, even though the selection is limited. The best thing about them: membership is free.
Shoppers can save as much as 60 percent by choosing the store brand over a national brand. Many people find the taste and quality of store brands to be just as good as the more costly brand names.
Walmart and Target, the big players in this category, offer savings of up to 70 percent on toiletries, drugs and other items. A recent Consumer Reports survey ranked Target better for customer service, quality of perishable items and cleanliness, while Walmart came out slightly ahead on price. Both will price match items you find cheaper at other stores.
There may be a stigma to shopping at dollar stores, but if you can get past that you can find some real bargains. Many leading dollar stores have been increasing the number of food items they sell. Family Dollar Stores (FDO) -- which agreed this week to be acquired by Dollar Tree (DLTR -- recently added 400 food items. Savings of up to 28 percent can be found at dollar stores over supermarket prices.
Club membership is down, but Costco (COST), Sam's Club and others are still great places to save if -- and this is a big if -- you have the space to store bulk purchases. ShopSmart found savings of up to 63 percent on some items. It also gives high ratings to some of Costco's Kirkland brand, including its bacon, laundry detergent and toilet paper.
Boxed gives you warehouse prices (and sizes) without paying a membership fee. Checkout 51 offers weekly specials on items such as Campbell's (CPB) soup or Prego sauces. You also get cash back for every $20 you spend. Flipp is great for checking store circulars for weekly specials. You can put items right onto your shopping list, and the app helps identify the best deals. All three of these apps work on Android and Apple (AAPL) phones and tablets.
Competition is heating up and that means more selection and better deals. Peapod and FreshDirect were among the first to hit the market, and they're still going strong. Now you can also check out Farmingo.com for farmers market products, DoorToDoorOrganics.comGoodEggs.comRelayFoods.com and Spud.com for organic and locally grown food. Of course, Amazon (FreshAmazon.com or Amazon.com/primepantry) and Google (GOOG) (Google.com/shopping/express) are trying to use their gigantic size to dominate this market. These services have varying order shipment minimums, delivery fees and subscription fees.
Convenience stores and drug stores may be easy to run into and pick up some essentials, but you'll pay top dollar for that convenience. ShopSmart's price check found these stores consistently charged a lot more, often more than double the price at supermarkets, Target and Walmart on basics such as milk, bread and eggs. A half gallon of milk at 7-Eleven costs $3.12. Compare that to the average supermarket price of $2.30. And a loaf of whole wheat bread at CVS (CVS) cost $2.91. At a dollar store the same loaf costs -- yes, you guessed it -- $1
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