Do Brands Serve as Reliable Signals of Nutritional Quality? The Case of Breakfast Cereals

Organic and national brand manufacturers position their offerings as nutritious meals for adults and children. Do these brands serve as reliable signals of nutritional quality? To find an answer, this study analyzed a very popular, ready-to-eat breakfast cereal food category based on all the available data from 2011 (324 offerings) from a large UK grocery comparison website, mysupermarket.co.uk. The study shows that it is possible to find store and basic brand offerings that are almost identical to national brand offerings, but much cheaper and with less sugar (the main concern in cereal). Hedonic price regression analysis further confirms that brand and size explain most of cereal’s price variability, regardless of nutritional quality. The findings also reveal that low-sugar cereals are hard to find regardless of price, and almost all cereals targeted at children have high levels of sugar. A replication study (337 offerings in 2012) revealed that, on average, cereal sugar levels and prices increased, while nutritional value decreased.