IDEAS home Printed from https://ideas.repec.org/p/ags/ucofmi/160515.html
   My bibliography  Save this paper

Breakfast Cereals: The Extreme Food Industry

Author

Listed:
  • Connor, John

Abstract

The purpose of my talk today is to review several aspects of the market structure, strategic rivalry, and economic performance of the ready-to-eat cereals industry. To do so, I will at times take a long historical view of the breakfast cereals industry because many of the behaviors we observe today seem to me to be imbedded in habits of business rivalry that were learned many decades ago and yet persist today. My perspective on the RTE breakfast cereals industry is informed by nearly twenty years of research on the economics of the 50 food processing industries, and my yardstick for judging the performance of the cereals industry is the economist's vision of the perfectly competitive market, or some reasonably close approximation to that ideal. The subtitle of my paper accuses the breakfast cereal industry to being an extreme case. Compared to other food manufacturing industries.I think the facts speak for themselves. During the 20th century, ready-to-eat breakfast cereals was the only consumer grain-based product that experienced an increase in per-capita consumption. Since the 1960s, the long-run growth of the cereals industry has been one of the highest if not the highest, among all the food industries. Both the increases in real (volume) growth and increases in prices have been near the top of the range, though growth seems to have faltered in the last year or two.

Suggested Citation

  • Connor, John, 1996. "Breakfast Cereals: The Extreme Food Industry," Issue Papers 160515, University of Connecticut, Food Marketing Policy Center.
  • Handle: RePEc:ags:ucofmi:160515
    DOI: 10.22004/ag.econ.160515
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/160515/files/ip12.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.160515?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stanley, Linda R & Tschirhart, John, 1991. "Hedonic Prices for a Nondurable Good: The Case of Breakfast Cereals," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 537-541, August.
    2. Scherer, F M, 1979. "The Welfare Economics of Product Variety: An Application to the Ready-to-Eat Cereals Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 28(2), pages 113-134, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    2. Golub, Alla A. & Binkley, James K., 2005. "Determinants of household choice of breakfast cereals: healthy or unhealthy?," 2005 Annual meeting, July 24-27, Providence, RI 19181, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Baltzer, Kenneth & Baker, Derek & Moller, Anja S., 2005. "The Use of Brands in Food Marketing - Results from a Survey of Danish Food Industry Firms," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24658, European Association of Agricultural Economists.
    4. Reimer Jeffrey J, 2004. "Market Conduct in the U.S. Ready-to-Eat Cereal Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-29, November.
    5. Chidmi, Benaissa & Lopez, Rigoberto A. & Cotterill, Ronald W., 2005. "A Supermarket-Level Analysis of Demand for Breakfast Cereals: A Random Coefficients Approach," 2005 Annual meeting, July 24-27, Providence, RI 19236, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Chidmi, Benaissa & Lopez, Rigoberto A. & Cotterill, Ronald W., 2004. "Vertical Relationships In The Ready-To-Eat Breakfast Cereal Market: A Brand-Supermarket Level Analysis," 2004 Annual meeting, August 1-4, Denver, CO 19916, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Connor, John M., 1997. "Couponing As A Horizontal And Vertical Strategy: Theory And Effects," Working Papers 14344, University of Minnesota, The Food Industry Center.
    8. Chidmi, Benaissa & Lopez, Rigoberto A. & Cotterill, Ronald W., 2009. "The Retail Service, The Market Power, and the Vertical Relationships in Breakfast Cereals Industry," 2009 Conference, August 16-22, 2009, Beijing, China 51770, International Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chidmi, Benaissa & Lopez, Rigoberto A. & Cotterill, Ronald W., 2005. "A Supermarket-Level Analysis of Demand for Breakfast Cereals: A Random Coefficients Approach," 2005 Annual meeting, July 24-27, Providence, RI 19236, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    3. Christopher R. Gustafson & Travis J. Lybbert & Daniel A. Sumner, 2016. "Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 91-103, January.
    4. Stuart D. Allen & Stephen K. Layson & Albert N. Link, 2013. "Public gains from entrepreneurial research: Inferences about the economic value of public support of the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 6, pages 105-112, Edward Elgar Publishing.
    5. Smed, Sinne & Hansen, Lars Garn, 2018. "Consumer Valuation of Health Attributes in Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    6. Salayo, Nerissa D., 2000. "Investment Opportunities for the Shrimp Processing Industry in the Philippines: Results from a Hedonic Analysis," Discussion Papers DP 2000-12, Philippine Institute for Development Studies.
    7. Karipidis, Philippos I. & Tsakiridou, Efthimia & Tabakis, Nikolaos M., 2005. "The Greek Olive Oil Market Structure," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(1), pages 1-9.
    8. David B. Audretsch, 2018. "Industrial Organization and the Organization of Industries: Linking Industry Structure to Economic Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 603-620, June.
    9. Michael Salinger, 1990. "The Concentration-Margins Relationship Reconsidered," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 287-335.
    10. Joseph Farrell & David Balan & Keith Brand & Brett Wendling, 2011. "Economics at the FTC: Hospital Mergers, Authorized Generic Drugs, and Consumer Credit Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(4), pages 271-296, December.
    11. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    12. ., 2013. "More on differences in the fitness of firms, market selection and product variety," Chapters, in: Competition, Diversity and Economic Performance, chapter 11, pages 218-232, Edward Elgar Publishing.
    13. Wipo, 2013. "World Intellectual Property Report 2013 - Brands: Reputation and Image in the Global Marketplace," WIPO Economics & Statistics Series, World Intellectual Property Organization - Economics and Statistics Division, number 2013:944, April.
    14. Dhanora, Madan & Sharma, Ruchi & Khachoo, Qayoom, 2018. "Non-linear impact of product and process innovations on market power: A theoretical and empirical investigation," Economic Modelling, Elsevier, vol. 70(C), pages 67-77.
    15. Rosa Paula Cuevas & Valerien O Pede & Justin McKinley & Orlee Velarde & Matty Demont, 2016. "Rice Grain Quality and Consumer Preferences: A Case Study of Two Rural Towns in the Philippines," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-17, March.
    16. Edward C. Jaenicke & Andrea C. Carlson, 2015. "Estimating and Investigating Organic Premiums for Retail‐Level Food Products," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 453-471, October.
    17. Mark D. Jekanowski & James K. Binkley, 2000. "Food purchase diversity across U.S. markets," Agribusiness, John Wiley & Sons, Ltd., vol. 16(4), pages 417-433.
    18. Thunström, Linda, 2009. "Consumer Values of Health-Related Food Symbols and Chemical Food Additives - The Case of Breakfast Cereals," HUI Working Papers 25, HUI Research.
    19. Andrea Pozzi, 2012. "Shopping Cost and Brand Exploration in Online Grocery," American Economic Journal: Microeconomics, American Economic Association, vol. 4(3), pages 96-120, August.
    20. Clarissa Yeap, 2011. "Capacity use in multi-unit firms: evidence for efficiency gains or strategic competition in the US restaurant industry?," Applied Economics, Taylor & Francis Journals, vol. 43(22), pages 2953-2968.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ucofmi:160515. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/fmuctus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.