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Breakfast: The most important meal for food companies

General Mills posts strong profits, but the battle for breakfast is heating up.

General Mills reported its earnings today and things were looking strong. Sales at the cereal giant grew 7 percent and income was up 13 percent. It was clearly a good quarter for the maker of Cheerios and Kix, but there’s a something of a breakfast battle going on right now.

Why? First, it's a growth market. Between the yogurt we eat while we’re running out the door and the bagel we grab on the way into the office, Americans eat 1.4 breakfasts per day. Still, there's no mistaking the king of the morning meal says brand consultant Debra Kaye, author of Red Thread Thinking.

"We are the biggest cereal eaters in the world," says Kaye. She points out that cereal owns 30 percent of the $65 billion breakfast market.

"No other product is as dominant at mealtime than cereal," she says. "The problem with cereal right now is that it really has nowhere to grow."

And there’s more competition than ever, Greek yogurt is going gangbusters, fast food restaurants are offering all kinds of early morning treats, and coffee houses are stepping up their food offerings.

Kevin Coupe, supermarket analyst and creator of Morning News Beat,says one reason companies go after breakfast is that once you get a customer, they tend to stick.

"If General Mills can get you to buy Cheerios, or McDonalds can get you to swing by the drive-thru window, once you’ve gotten into the habit, it’s more likely to last," says Coupe. "And that can have a huge economic impact for companies over a long period of time."

Even for companies, breakfast is the most important meal of the day.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.
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