Breakfast cereal cafe set to open in New York. Will Millennials care?

Kellogg's will open a new cafe in Times Square on July 4, serving only cold breakfast cereal. Will people actually pay $6 a bowl? 

Gene J. Puskar/AP/File
Kellogg's cereals are on display at a Pittsburgh grocery market. A cereal cafe is set to open in New York City on July 4, 2016.

Fruit Loops with lime zest and marshmallows. Frosted Flakes with pistachio and lemon. Honey Smacks with toasted pecans and banana chips.

As times get leaner for cereal companies, Kellogg's is trying to bring the beleaguered breakfast food back into style.

On July 4, the company's first-ever restaurant will open its doors in Times Square, in hopes that a little rebranding of the classic breakfast food can jumpstart waning sales, reported the Wall Street Journal on Tuesday. In contrast with the honky-tonk feel of the area outside, the restaurant has an intimate, retro feel, courtesy of design by Anthony Rudolf, founder of members-only restaurant professional club Journee and director of operations for chef Thomas Keller's restaurants.

In other senses, though, the idea is pure Times Square kitsch: Customers will retrieve their food from a cabinet that lights up when the order's ready, and along with their bowl of cereal, they'll find treats of the sort found in cereal boxes, according to the Journal. A bowl will run from $6 to $8.

The opening comes as Kellogg's sees its dominance in the market – its share stood at 28 percent in 2015 – increasingly eaten away by the competition. According to market analysis firm Euromonitor, its Kashi Co subsidiary has been particularly hard-hit by an influx of natural breakfast cereals.

Kellogg's isn't alone, though, in its struggle to bring back breakfast crunch – the cereal industry as a whole has been in decline since the late 1990s. In 2015, sales totaled $10 billion, down from $13.9 billion in 2000. And that trend is expected to continue over the next five years, driven by a trend toward the "snackification" of American food.

"Led by millennials," read a 2015 Euromonitor report, "time-pressed consumers continue to turn away from sit-down breakfast options in favour of more portable snacks they can eat while on the go." Snack bars, Greek yogurt, biscuits, and other smaller categories are booming.

Millennials, it seems, think pouring out a bowl of cereal isn't worth the trouble. Nearly 40 percent of Millennials felt the food was an inconvenient breakfast choice because they had to clean up after eating it, reported the New York Times in February.

"Millennials aren't the only ones who prioritize convenience above all else at mealtime," documentary filmmaker Joe Cross, who produced the documentary "The Kids Menu," told the Monitor in February via email regarding the study. "Everyone is short on time these days and convenience IS a big deal – but convenience food does not have to mean unhealthy food. The trick is making healthy choices more convenient."

The Times noted that the food retains strong links to nostalgia. According to a 2015 survey by market research company Mintel, almost half of baby boomers polled, and almost 40 percent of the previous generation, said the cereal they ate as kids is still their favorite. That may be the case for Millennials, too, but if it is, their nostalgia isn't much of a determinant of what they reach for in the morning.

One type of cereal stands out from the pack: muesli, a close cousin of granola that has grown in consumption over the past decade, probably because of its reputation as a healthier option. Its success has spurred cereal giants like Kellogg's and General Mills to move in that direction, with both companies introducing new lines of organic cereals. 

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