Breakfast Cereals Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in the Breakfast Cereals Industry

In the current scenario, investment platforms have been witnessing an integration of ESG due to responsible investing as a part of better business development and decision-making strategies.

The demand among breakfast cereals is surging because of the hectic lifestyle and preference of millennials to have “Ready to Eat” foods. This segment witnessed a sudden increase in demand during the pandemic due to the restrictions on commute and the availability at cheaper costs from e-commerce platforms. Products in the Ready-to-Eat segment can either positively or negatively impact health of the consumers which is why product marketing, labeling, and selling is of key importance in the industry.  Breakfast cereals have been favored among consumers as some consider it to fit their health-specific diet plan. All these have a significant impact on the health and wellbeing of the society, which is why companies operating in this sector have a significant impact on the United Nations’ Sustainable Development Goal - 3 (Good Health and Wellbeing).

On the other hand, to promote UN SDG - 8 (Decent work and economic growth), value chain operation operators have ensured there is an uninterrupted flow of products within the supply chain, thereby creating jobs. In terms of the environmental impact, it is important for companies in this sector to focus on packaging and waste created through packaging. In line with this, provision of circular or sustainable packaging and reducing plastic usage has been on agenda for this segment and it has been mentioned in company policies and strategies.

The companies which in focus have been dominating the breakfast cereal market, along with fulfilling demands of consumers who are inquisitive of healthy diets.  

ESG Trends

Breakfast cereals segment has been significantly influenced by both environmental and social factors. Responsible sourcing (SDG 12) has been one of the key areas these companies are focused on, providing livelihood, and strengthening local farming communities along with CSR activities like Positive Agriculture with a sustainable business projection minimum pesticide use as per Global pesticide council. Companies in this market have policies to reduce palm oil sourcing and ensure animal welfare (SDG 12). Moreover, these agriculture practices are in accordance with minimizing Greenhouse Gas emissions. Accessibility (SDG 10) and well-established supply chains have been one of the main governing factors to the success in this segment, as discussed earlier. In terms of market labeling (SDG 12), consumers are very much conscious and informed in reference to FSSAI guidelines for breakfast cereals, as regulation prescribes only 12 g of advisable fat and not more than 10% of sugar in the product. The companies must provide adequate labels to their products to adhere to this guideline. Hence, all these are connected the Good Health and Wellbeing (SDG 3).

ESG Challenges

One of the major environmental problems that this industry must tackle is with the package waste disposal. The high consumption pattern during the pandemic and the increased demand for ready to eat products has a significant impact on UN SDG 12 - Responsible Production and Consumption. Even though sustainable packaging and circular packaging have been a focus for most companies in this space, there hasn’t been a complete shift to such procedures. Customer preferences are changing in accordance with lifestyle preferences such as keto diet, veganism, intermittent fasting etc. have positively influenced the social aspect of ESG in this segment. FSSAI implements strict regulation on factors as mentioned and companies must provide scientific study of the product make, such that it should adhere to those frameworks. 

Growth of the Breakfast Cereals Market

Breakfast cereal market size has been valued at USD 36.5 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 3.7% from 2022 to 2030. Breakfast cereal consumption across the globe has been booming due to the rising popularity of ready-to-eat food enabled by the fast-paced lifestyles of the working population.  Moreover, the emergence of health-conscious consumers has made transition from preferring taste over health and wellbeing.

Key Companies in this theme

    • PepsiCo

    • Nestlé

    • Marico

    • Calbee

    • Bagrry India Pvt. Ltd.

    • General Mills Inc.

    • Kellogg Co.

    • B&G Foods, Inc.

Scope of the Breakfast Cereals Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Breakfast Cereals Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the breakfast cereals space, globally

    • Key insights into environmental developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the breakfast cereals market

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment into the sector