In this review, we aim to describe the mechanisms by which LAB can fulfil the novel role of efficient cell factory for the production of functional biomolecules and food ingredients to enhance the quality of cereal-based beverages. LAB fermentation is a safe, economical, and traditional method of food preservation foremost, as well as having the additional benefits of flavor, texture, and nutrition amelioration. Additionally, LAB fermentation in known to render cereal-based foods and beverages safe, in a chemical-free, consumer-friendly manner, from an antinutrient and toxigenic perspective. Huge market opportunities and potential exist for food manufacturers who can provide the ideal functional beverage fulfilling consumer needs. Newly developed fermented cereal-based beverages must address markets globally including, high-nutrition markets (developing countries), lifestyle choice consumers (vegetarian, vegan, low-fat, low-salt, low-calorie), food-related non-communicable disease sufferers (cardiovascular disease, diabetes), and green label consumers (Western countries). To fulfil these recommendations, a suitable LAB starter culture and cereal-based raw materials must be developed. These strains would be suitable for the biopreservation of cereal beverages and, ideally, would be highly antifungal, anti-mycotoxigenic, mycotoxin-binding and proteolytic (neutralize toxic peptides and release flavor-contributing amino acids) with an ability to ferment cereals, whilst synthesizing oligosaccharides, thus presenting a major opportunity for the development of safe cereal-based prebiotic functional beverages to compete with and replace the existing dairy versions.