Breaking down bars
Breaking down bars
BakingBusiness.com, December 01, 2009
by Eric Schroeder

For many years, the bar category — whether it be snack, granola, breakfast, cereal or nutrition — benefited from a perfect fit with consumers seeking greater convenience at every turn. The ever expanding market for bars appeared to narrow over the past year, though, with growth slowing dramatically. Whether this slowdown is a temporary reflection of economic weakness or a more lasting phenomenon remains to be seen.

In the interim, though, new product development has slowed. Globally, the number of new snack/cereal/energy bars introduced peaked in 2007 at 1,959, but fell to 1,768 in 2008 and was only at 1,411 through Nov. 18, 2009, according to Mintel Global New Products Database.

Granola bars, the largest subcategory of the total snack bars/granola bars category tracked by Information Resources, Inc., Chicago, have proved a bit disappointing in the past year. Driven by price increases commonplace in many grain-based foods categories recently, dollar sales of granola bars rose 1.2% to $903,506,800 in the 52 weeks ended Nov. 1, according to I.R.I. Unit sales, on the other hand, fell 2.4% to 341,418,200. More alarming is the fact 7 of the top 10 brands tracked by I.R.I. posted lower year-over-year unit sales in the period, including four brands that fell more than 10% in the period.

Even private label, which has held up well in most categories during the tough economic climate, has not been immune to the struggles in the granola bar segment. Unit sales of private label granola bars were down 1.3% in the 52 weeks ended Nov. 1, according to I.R.I.

One company that has managed to weather the storm has been The Quaker Oats Co., Chicago. The company’s Quaker Chewy brand, which ranks No. 1 among granola bars, according to I.R.I., generated a 6% gain in dollar sales and 2.5% increase in unit sales during the 52 weeks ended Nov. 1. The company also has received a boost from new products, including Quaker True Delights Granola Bars, a product Quaker describes as "a unique snack bar that is indulgent, yet surprisingly wholesome."

Since their launch this past February, the True Delights bars have generated nearly $18 million in sales, according to I.R.I.

In contrast to the struggles occurring with granola bars, the breakfast/cereal bars segment appears to be doing very well.

"Breakfast cereal bars provide a nutritious on-the-go option and the segment has also long been a trendsetter for support of the functional products trend," said Mintel International Group Ltd. in a November report on the breakfast foods category. "This has helped boost appeal for health conscious women, who are a leading target for the segment."

Mintel said cereal bars sales have increased 35% between 2004 and 2009, and by 2014 the category is expected to approach $953 million in sales, up from $747 million in 2009.

Leading the charge in the cereal bar category has been General Mills, Inc. with its Fiber One brand. According to I.R.I., dollar sales of Fiber One totaled $139,071,100 in the 52 weeks ended Nov. 1, up 28% from a year ago. Unit sales rose 16% to 45,441,890.

Despite an 8% decline in dollar sales and a 10% drop in unit sales, Special K bars from Kellogg Co., Battle Creek, Mich., remain the No. 2 player in the breakfast/cereal bar category with sales of $126,502,300, according to I.R.I. Kellogg remains upbeat about Special K’s future, but in the meantime has derived a spark from its Nutri-Grain brand (No. 3 in the category with sales of $121,853,000, up 9% year-over-year) and newly launched Kashi TLC (No. 5 brand with sales of $31,617,270).

A small but rapidly growing sector of the bar category classified by I.R.I. as "all other snack/granola bars" bears watching. The largest brand in the category is Larabar, acquired by Minneapolis-based General Mills in June 2008 as part of its purchase of Humm Foods, Denver. The all-natural Larabar brand had sales of nearly $7 million in the 52 weeks ended Nov. 1, according to I.R.I., boosted in part by the launch earlier this year of two new flavors: peanut butter and jelly, and tropical fruit tart. The company also added a German chocolate cake flavor to its Larabar Jocalat brand.

What’s next?

A few years ago, energy bars were all the rage, with vitamin-packed products such as Snickers Marathon Energy Bar making their mark. Now it looks as though energy may be out and relaxation in.

In a recent "Facts, Figures & The Future" report from Phil Lempert, the idea of comfort food transforming into relaxation foods was identified as a trend for 2010. Mr. Lempert mentioned the trend initially taking place with "relaxation" beverages that contain herbs and other ingredients, but may quickly spread to other categories, including "anti-energy" bars.

Ancient Sun Nutrition, Inc., Asheville, N.C., is among companies tapping into the trend. The company recently introduced WildBar, which contains phenylethylamine, an ingredient some scientists believe may dramatically improve concentration, increase mental energy and enhance mood. The bar is available in two flavors: Mayan Spice and Mountain Mint.