I’ve a tender spot for sugar cereals.
Having grown up within the 80s consuming huge packing containers of Captain Crunch, Fortunate Charms, and Life (my mates known as me Mikey!), I nonetheless salivate once I see huge, colourful packing containers with leprechauns and monsters within the grocery retailer cereal aisle.
So when keto-friendly, processed sugar-free sugar cereal substitutes began showing in 2018 and 2019, I used to be excited. Like several self-respecting grownup, I’d moved on to extra accountable breakfast choices, however noticed these new keto-free cereals as a guilt-free time journey machine again to the land of the magically scrumptious.
I wasn’t the one one. The product’s early success accelerated in the course of the pandemic, a time when folks had been bored at house and ordering a lot of meals by way of supply. This led to a formidable collection B in 2022, the place the corporate scooped up $85 million. That funding fueled the corporate’s enlargement into retail, and now yow will discover Magic Spoon in locations like Costco, Goal, and Walmart.
With widespread availability, the corporate ought to now be beating the old-school, better-for-you cereals like Grape Nuts and granola, proper?
Perhaps not. In keeping with a tweet by Andrea Hernández of Snaxshot, Magic Spoon cereal has hit the clearance bin at Sprouts, a series specializing in premium manufacturers. The pic, which Andrea additionally posted on Linkedin, led to a lot dialogue about whether or not the better-for-you keto cereal development is over.
OMG 😂🤝
Magic Spoon in low cost bin for $1.99
that is what VC backed development will result in—rattling so folks don’t even need it at a $7 low cost
that’s wild lolllllll
but additionally thank your native VC 🤝
making BFY accessible to plenty pic.twitter.com/5sSuzAqBYf— Andrea (@iiiitsandrea) March 28, 2024
Whereas it will not be over, you must marvel in regards to the long-term prospects of Magic Spoon and rivals like Schoolyard Snacks (previously Cereal College). The primary drawback is they’re simply very costly. Sadly for these manufacturers, breakfast cereal is a commodified merchandise, one thing most conventional adults aren’t keen to pay a 3x premium for.
The opposite drawback is addressable market dimension. I like Magic Spoon (or precise sugar cereal) as a once-in-a-while nostalgic escape, however realistically, I’m not going to make it part of my on a regular basis routine (and, as I mentioned, I actually like sugar cereal). I think about that is fairly typical of their addressable goal market.
Lastly, there’s the query of style. I’m nice with it, as are many others, however some suppose the sugar-free style is a poor artificial illustration of the true factor. In a approach, this criticism echoes a few of those that have heard about Unimaginable and different plant-based meats (although I might argue each the acquisition motivation and rationale for plant-based meat are a lot stronger, and the addressable market a lot greater).
So is the keto, better-for-you sugar cereal development over? Most likely not but, however I’ve to marvel if the VCs who wrote giant checks for fund corporations making tiny packing containers of cereal for adults had rigorously labored by all their assumptions about how huge these markets can be.
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