Shanghai Street View: Revolutionizing Breakfast 沪经动向：早餐革新

Shanghai’s historical place as a mixing point between east and west has burnished the city’s reputation as a hub of revolution and experimentation, which is appearing now on the breakfast table as a leading local food group tries to sell Shanghainese on western-style breakfast cereal. Shanghai watchers will know of course that I’m talking about local food superstar Bright Food Group, which has just closed its purchase of a controlling stake of British breakfast cereal giant Weetabix for more than $1 billion.

Bright will certainly have a difficult task converting Chinese to cold breakfast cereal, as it tries to change centuries of tradition that have seen hot fare like congee and egg pancakes establish themselves as local morning favorites. But the company does have its size, reputation and sales channels working in its favor, and demographic changes now sweeping China should also boost its chances for success.

Let’s take a look at this week’s latest headlines, which have Bright boasting that it wants to bring cold breakfast cereals to all of Asia following its purchase of 60 percent of Weetabix, whose brands also include popular Alpen and Ready Brek names. (English article) At a London ceremony to mark the closing of its latest global purchase, Bright’s Chairman Wang Zongnan said he plans to introduce Weetabix to Shanghai and China by selling the British company’s breakfast cereals through Bright’s vast distribution networks.

First announced back in May, the Weetabix deal marks the largest purchase ever of a foreign food company by a Chinese firm. (previous post) It is also part of a broader global purchasing binge by Bright, which has bought other food and beverage product makers in Australia, New Zealand and France over the last 2 years in a bid to become China’s first global food conglomerate. Bright’s China cereal play could also get a boost from Wheetabix’s US rival Kellogg (NYSE: K), which in September announced its own new China joint venture that also aims to bring breakfast cereal to Chinese dining tables. (previous post)

So what are Bright’s chances of changing centuries of Chinese culinary habits? I previously said I was optimistic of Kellogg’s chances of success when it announced its joint venture 2 months ago. This latest announcement by Bright makes me even more confident that China could indeed soon be ready to embrace cold breakfast cereal, with Shanghai poised to lead the country into this brave new world of fast, easy-to-prepare foods.

China is now undergoing many of the changes that caused breakfast cereal and other similar convenience foods to rise to prominence in the west over the last 50 years. The rise of a white collar middle class has created a new generation of busy young urbanites, many of whom don’t have time or interest in preparing more traditional breakfasts like congee and other hot food at home each morning. Cold breakfast cereal, by comparison, is relatively simple since it only requires the pouring of cereal into a bowl and addition of milk.

Streetside shops and vendors that sell traditional hot breakfast fare like egg pancakes and oily fried dough sticks could also find themselves losing their audience in the years ahead, as many Chinese buy cars and drive to work, circumventing these traditional vendors.

Shanghai’s historic embrace of western foods is already apparent in the city’s diet, which include such un-Chinese items as salads and healthy doses of foreign-inspired touches like mayonnaise. This addition a local packaged food giant like Bright as a new cheerleader for breakfast cereal means Shanghai consumers are that much more likely to soon see boxes of Weetabix and Alpen on their local store shelves.

I, for one, will be a welcome buyer of these new cereals when they make their debut on Shanghai store shelves in the months ahead, due to my own busy schedule and fondness for these convenient food products. If Bright and Kellogg include slick, well-designed marketing campaigns as part of their new product plans, we could soon see easily cold breakfast cereals emerging as a local favorite among Shanghai’s young, upwardly mobile white collar class in the next 5-10 years.