Nutrition runs up front in the US snack bar race: Rabobank
The overall market for snack bars in the US is pegged at around $6bn and has almost doubled over the last decade with an average CAGR of 6.4%, Rabobank data showed.
The sector far outpaces the 3.5% CAGR growth of the $34bn savory snack market (chips and pretzels), it said.
Boasting breakfast, energy and nutrition, fruit, granola/muesli and other bars, energy and nutrition bars gobble up the lion’s share, Rabobank said.
For 2012, energy and nutrition bars represented 35% of sales, granola/muesli 26%, breakfast 22%, fruit 12% and others 5%, according to data compiled by Euromonitor and Rabobank.
General Mills, Kellogg’s and Clif Bar represent almost 60% of the market and boast seven of the top ten brands.
Nutrition (and Clif) is ahead of the race
Energy and nutrition bars represent one-third of all sales and growth surged at 9% CAGR between 2007 and 2012.
“Most of that explosive growth is attributable to just one maker, Clif Bar & Company,” Nicholas Fereday, author of the report and Rabobank analyst, said.
This firm has been a market leader since 2008 with its Clif, Luna and Mojo brands, Fereday said.
Clif Bar has taken an unconventional route, remaining fiercely independent and rarely advertising in mainstream media beyond sponsoring sporting events and athletes, the report said.
In 2000 it turned down a buyout offer from PepsiCo’s Quaker Oats as it said it could remain focused on eco-friendly practices better as a private entity.
Around 70% of ingredients used in the firm’s products are now organic with an 80% target by 2015 outlined.
“Clif’s socially aware credentials, including a big emphasis on taste and quality ingredients and innovative use of new flavors, not to mention their relatively hip image, have made them a hit with consumers,” the report said.
Candy fails to penetrate
Confectionery companies have failed in the snack bar space, “suggesting there is a line between snack bars and candy that cannot be crossed”, the report said.
Hershey and Mars were named as candy firm’s unable to transfer iconic brands into the sector. Mars’ Kudos granola bars (co-branded with M&Ms and Snickers and Hershey’s Snack Barz have not succeeded in the category.
“The lack of success is because these brands, or the parent company, are viewed as offering less healthy snacking options,” Rabobank said.
“Candy is perhaps too much of a challenge to the wholesome, active image of the snack bar, particularly energy bars. Snack bars are perceived as contributing to better health and, up until now, have been less associated with the empty calories of soft drinks and candy,” Fereday said.
Future snack bar success
The market will continue to grow and be underpinned by a health and wellness trend that “just keeps giving”, Rabobank said.
Broader food companies are likely to tackle the sector, like Kellogg’s, and should succeed if ‘good for you’ is the focus. Flavor and functional ingredient fortification also presents opportunities, it said.
Partnerships with the foodservice industry also offer up opportunities as it would capitalize on changing consumer lifestyles dictated by less time.