Snack bars outsell confectionery, report

By Charlotte Eyre

- Last updated on GMT

Related tags: Snack bars, Cent, Snack foods, Candy bar

Thanks to the health and organic trends, sales of cereal bars in
the EU will experience average compound annual growth of 7.2 per
cent up to 2010, far outstripping sales of candies and chocolate, a
new report claims.

According to a new report from Global Business Insights, the European market for snack bars will be worth $4bn (€2.7bn) over the next three years. By contrast, sales of chocolate, gum and sugar candies will experience slow annual compound growth of 1.7 per cent, 2.5 per cent and 2.1 per cent respectively, dampened by negative connotations with obesity and health problems. While not good news for confectionery companies, the results indicate that cereal bar manufacturers are swiftly gaining ground in the snack market, traditionally dominated by chocolate and candy products. "Although cereal, energy and sports bars may be relatively new compared to confectionery products such as chocolate bars and bubblegum, the category stands head and shoulders above in terms of forecast growth and market value,"​ said author Helen Lewis. Successful marketing of the 'healthy' properties of snack bars will result in compound annual growth of 8.7 per cent for sport and energy bars, 1.2 per cent for muesli bars, and 9.1 per cent for other bars. According to Lewis, many global cereal companies are now waking up to the opportunities presented by the current market, and are developing numerous new product combinations. Flavours not normally associated with snacks are becoming more prevalent, and products with natural additives such as fruit juice are flying off shelves across Europe, she added. On the other side of the Atlantic, the market will fall short of the expansion rates in Europe, predicted to grow 3.9 per cent annually up to 2010, to reach a total of $3.2bn (€2.2bn). However, manufacturers in the US are still aware that developing new snack bar products is a primary growth strategy, Lewis said. "Kellogg North America, for example, launched Yogos Rollers in January 2007 to capitalise on consumer interest in products with perceived health benefits, which can replace traditional confectionery purchases,"​ she said. "The fruit flavoured rolls are made with real fruit and yoghurt and are targeted at children." ​Lewis added that while other snacks are currently lagging behind in terms of innovation and sales growth, there are still opportunities for manufacturers in a range of categories. Two products named in the report as having potential for high new product development (NDP) are pretzels and real fruit snacks. Manufacturers should exploit the fact that consumers see these products as 'healthy', even when they contain high amounts of sugar, fat or chocolate, Lewis said. Manufacturers should also create healthier cookie brands, instead of promoting mainly indulgent chocolate flavours, she added. Several food companies worldwide have this year attributed increased profits to strong snack or cereal bar sales. In September, UK-based manufacturer Glisten said that net fruit and cereal snack sales for the year ending 30 June 2007 were up to £28.4m (€40m) from £23.7m (€33.4m) last year, while sales within the confectionery division were down to £30.4m (€42.8m) from £31.9m (€44.9m). Similarly, US-based General Mills said that increased market share of some of its healthier snacks, such as Nature Valley grain snacks and Fiber One bars, helped boost overall sales in the US during the first quarter ended 26 August Sales went up 16 per cent in the US retail segment snack division in the company's first fiscal quarter, adding to an overall net sales increased of $3.07bn (€2.2bn).

Related topics: Markets

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