Energizing the Industry

January 1, 2005
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Energizing the Industry
By Andy Hanacek
The prognosticating energy bar category is at it again, staying two steps ahead of the rest of the snack food industry in predicting and addressing consumer demand.
It happened with low-carb. It happened with the elimination of trans fat. And it’s happening again.
Just when the snack food industry thought it had caught up in the race to identify consumer trends, the energy bar category is back to its old ways, predicting and fueling the next biggest trends, and staying two steps ahead of the pack in addressing them.
This is nothing unusual for energy bar manufacturers, whose healthful products have thrust their way into mainstream consumer demand and are simply not just for athletes anymore.
Nutritional/Intrinsic Health Value Bars(for 52-week period, ended November 28, 2004)
Rank Brand Dollar Volume(in millions)%ChangeDollarShareUnit Sales(in millions)%Change
1Atkins Advantage$73.1+2.711.134.3+10.9
2Atkins Endulge$50.5+73.17.738.6+90.1
3Zone Perfect$48.8+11.57.429.2-2.1
4Clif Luna$34.1-15.85.224.8-17.1
5Balance Gold$31.2-1.54.722.0-9.0
6Slim Fast Meal on the Go$30.3-51.14.610.5-56.4
7Power Bar$27.3-13.54.121.7-14.3
8Clif$22.7+3.03.417.9+5.5
9Slim Fast$21.6+213.53.36.8+436.2
10Slim Fast Meal Options$21.5+2.53.310.6-26.9
 TOTAL*$659.7+4.0100.0394.4+0.6
*including brands not shownSOURCE: Information Resources Inc., Supermarkets, Drug Stores and Mass Merchandisers,excluding Wal-Mart
Granola Bars(for 52-week period, ended November 28, 2004)
Rank Brand Dollar Volume(in millions)%ChangeDollarShareUnit Sales(in millions)%Change
1Quaker Chewy$125.2-4.423.349.7-5.8
2Nature Valley$106.1+9.319.740.7+9.2
3Sunbelt$46.8-9.28.732.8-8.2
4Kudos$42.7-13.17.915.7-13.6
5Private Label$40.8+14.77.619.2+14.5
 TOTAL*$538.1+4.9100.0227.1+3.4
*including brands not shownSOURCE: Information Resources Inc., Supermarkets, Drug Stores and Mass Merchandisers,excluding Wal-Mart
“Originally, energy bars were just for increased energy, packed with a lot of sugar,” explains Matt Wiant, senior vice president and chief marketing officer at Atkins Nutritionals, Inc. “Then there were high-protein bars, used by those interested in muscle growth. Now, there are a variety of low-fat, weight-control bars, low-carb bars, bars for diabetics, organic bars, [and] cereal bars.”
Energy bars have always been well-positioned in the new, health-conscious, American marketplace to catch the windfall of consumer trends. The energy bar industry is a good barometer of what might come next as far as consumer desires go, says Vanessa Wagar, manager of corporate communications for PowerBar, Inc.
“When a diet becomes popular — Atkins or South Beach or Dr. Phil, for example — one of the first forms they roll the diet out in is in a bar form,” Wagar says. “Energy bar manufacturers do tend to be on the cutting edge of health-and-wellness trends.”
Another fine example of perfect positioning for the energy bar industry is trans fat. While the rest of the snack and baking industry scrambles to reformulate and innovate new, trans fat-free products, the energy bar industry can sit back and relax, since most energy bars booted trans fat, and most fat in general, long ago.
That leaves many in the category able to look ahead and prepare for the next big thing. Right now, Wagar says, the industry is really in between waves. But certain factors, such as the U.S. Dietary Guidelines, which were released earlier this month, could propel the category into new ground.
“The new USDA Guidelines encourage Americans to increase fiber intake and choose more nutrient-dense foods,” she says. “You will see energy bar manufactures, like PowerBar, rapidly responding to these trends with new offerings.”
Wiant adds that other trends following the effect of the low-carb craze are already cropping up.
“Most recently, bars ranking low on the glycemic index are hitting shelves,” Wiant says. “[They] seem to currently be a trend, though they are just another twist on low-carb.”
But maybe the biggest trend ahead for the energy bar category has to do with the consumers’ most basic desire — to get a healthy product that also tastes really good, according to Wagar.
Energy Bars(for 52-week period, ended November 28, 2004)
Rank Brand Dollar Volume(in millions)%ChangeUnit Sales(in millions)%Change
1Nutritional/Intrinsic Health Value$659.7+4.0394.4+0.6
2Granola$538.1+4.9227.1+3.4
3Breakfast/Cereal/Snack$511.7-3.3186.6-4.2
4Rice Snack Squares$98.9-0.541.4-5.4
5All Other Snack/Granola$2.6+22.92.1+77.7
 TOTAL*$1,811.0851.6
*including brands not shownSOURCE: Information Resources Inc., Supermarkets, Drug Stores and Mass Merchandisers,excluding Wal-Mart
“Taste is a challenge,” she explains. “Historically, consumers have tended to think it’s a tradeoff between a candy bar and an energy bar. They know that they’re getting added vitamins and fortification, but they may prefer the taste of a candy bar.  However, we are overcoming the taste challenge as confections and energy bars intersect. More decadent-tasting new products will bring a whole new set of consumers into the franchise.”
That whole new set of consumers could end up growing a category that got a nice 4% boost in dollar sales during the 52 weeks ending Nov. 28, 2004, according to data from Information Resources, Inc.
That boost was propelled mostly by Atkins’ huge jump in dollar sales (18.7%) among vendors, most certainly helped along by the immense popularity of the Atkins Diet and other low-carb diets through the early part of 2004. More evidence to that fact was Atkins’ entry in the breakfast/cereal/snack bars category, Atkins Morning Start bars. These bars skyrocketed 240% in dollar sales and 286% in unit sales in a segment that saw seven of the top 10 brands incur a decline in dollar sales.
Not everyone benefited from low-carb though. The energy bar category did mirror the rest of the industry in terms of companies jumping in too quickly in some instances, says Jennifer Cohen, company spokesperson for Everlast Nutrition.
“The low-carb craze created a frenzy not only with consumers but with retail buyers as well,” Cohen explains. “To that extent there was a disproportionate and artificial increase in the number of SKUs within the low-carb category. Many bar brands built their entire assortment around the low-carb lifestyle, so when the lifestyle waned, these brands suffered most.”
Even granola bars have gotten in on the health-and-wellness kick lately, showing marked improvement in dollar sales during the 52 weeks ending Nov. 28, 2004. The Dietary Guidelines’ recommendations on fiber and whole grains probably won’t hurt granola bar manufacturers too much down the road, especially those that focus on supplying those ingredients. Consumers are looking for taste, but the desire for whole grains in bakery and snack products is also a growing trend that the guidelines no doubt will fuel.
PowerBar, the No. 2 vendor in the convenient nutritionals category, slipped during that period but held its ground compared to its next biggest competitors. The company believes it has an early shot at picking up the slack after the dissipation of the low-carb craze and based on the upcoming launch of a new decadent-tasting energy snack bar, PowerBar Triple Threat.
“There’s a very active space where you see the convergence of confection and energy bars,” Wagar says. “Right now companies like PowerBar, Hershey’s, and Mars are all coming out with hybrids between candy bars and energy bars. So that’s definitely a hot area.”
Whether energy bar companies are able to improve taste to consumers’ approval, the industry still remains positioned to benefit from future trends. It might be low-carb, low-trans fat, low-glycemic, high-fiber or better-tasting, and it still might not matter, since the overall health trend in America works perfectly with the biggest pros energy bars offer.
“Even though obesity rates continue to climb, Americans are more nutritionally aware than ever before,” Wagar says. “But at the same time, we’re busier than ever. [Add] the fact that energy bars deliver one of the most convenient, nutritionally dense food products available, [and] it becomes a smart solution.”

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