Despite the recent flat market, bar sales are expected to rise. Joysa Winter finds out what bar manufacturers and ingredients suppliers are doing to ensure themselves a slot in the game
Looking back, 2001-2006 were golden years for bars. With the flight from carbs dominating diet news across America, sales of nutritional and energy bars surged 18.5 per cent, according to Mintel, a market research firm in Chicago. But then, the boom fizzled. The growth rate slowed to 12.7 per cent between 2004 and 2007.
"Market maturation and competition with other categories are at the heart of the tepid sales the nutrition and energy-bar category has experienced in the past three years,? Mintel concluded in its 2007 report on the bars segment.
Bar manufacturers should take heart, however. A brighter road is ahead. "Nutrition and energy-bar sales will be $982 million by the year 2011,? Mintel predicts. "This figure represents an increase of 24 per cent in current terms and nine per cent in constant terms.?
Athletic bars will fare even better. They are forecast to grow 27 per cent in current terms and 13 per cent in constant terms, making this the hottest projected segment.
Bars are also an unbeatable format for delivering nutrients — something that will not be going out of style anytime soon. According to Mark Crowell, CRC, founder of CuliNex, a consultancy specialising in the development of organic and natural foods, bars lead all other food categories in consumer acceptance for functional ingredients.
How, then, can a food manufacturer ensure that its nutritional or sports bar captures a piece of the future growth? And what will the consumers of tomorrow be looking for in a bar, both in terms of nutrient profile and dietary function?
Food formulators weigh in
Ingredients suppliers cite numerous factors in the segment's recent woes, including increased competition from other snack categories; a failure to market successfully in the 25-64 age range; and the market vacuum created by the bust of the low-carb movement.
None of these challenges is intractable, they point out. "Less than 40 per cent of consumers currently participate in the category,? says Jean Heggie, Solae's director of market insights. "The No. 1 reason is their perception that bars are not 'real food.' In order to continue to grow — and to grow again at double-digit rates — the key will be innovation in product design and benefits, improving the 'natural' or 'real-food' appeal of bar products and attracting new consumers to the category.?
Kerry, based in New Century, Kansas, points to strong granola-bar sales as an indication of what consumers want. "Growth in sales of nutritional-bar sales has slowed due to the lack of a definitive weight-management programme capturing the attention of the mainstream media and powerful enough to take over from where low carb left off,? says Keith Parle, director of functional-foods sales and strategic development at Kerry.
But all bar segments are not responding the same way. "According to our market data, granola bars are the current growth vehicle in the bars market, gaining at a rate of about 20 per cent,? he says. "Consumers are reaching for granola bars due to disposable income constraints, and the mainstream desire for their family to consume more whole-grain products.?
Fortitech points to data from Mintel, which show that the heaviest users are those in the 15-24 and 65+ age groups. "To strengthen sales within the 25-64 age range, manufacturers need to do a better job of not only creating products that deliver specific health benefits, but calling that out to the consumer,? says Ram Chaudhari, PhD, FACN, CNS, senior executive vice president, chief scientific officer and co-founder of Fortitech. "This is a very 'aware' segment of the population and they seek out benefit-specific products that address a range of issues, including weight loss, cardiovascular disease, fatigue and diabetes. Marketing these types of products as something other than 'snack bars,' and calling out their benefits should have an impact with consumer purchasing habits.?
The next market trends
Developers agree that such issues as market positioning, continued growth in protein- and fibre-fortification, as well as further cost cutting are key. "We are anticipating more brand and product-line consolidation, as well as more focused branding initiatives,? Kerry's Parle says.
"A key trend is the drive to increase the protein delivery, particularly general-wellness bars, bars positioned for weight-management/satiety benefits and bars positioned to address the needs of the performance-nutrition segment,? says Heggie at Solae. "Within the performance-nutrition segment, we are seeing a trend emerging around the blends of proteins.
"We also believe natural positioning will continue to be a hot area, as bar manufacturers seek to use fewer preservatives and additives; use natural sugars; increase use of fruits, vegetables and whole grains; and take advantage of the benefits of soy as a plant-based, natural source of protein. We are seeing interest in stacking ingredients for health benefits/functional claims and the increasing use of high-antioxidant fruit pieces, such as pomegranate and blueberry.?
Glanbia made similar predictions. "We expect bar formulations to focus on moderate levels of protein, with zero tolerance for anything but great-tasting bars that maintain an acceptable texture,? says Max Maxwell, business development manager. "Mainstream bar formulations will continue to utilize blends of proteins. There will continue to be specialised bars for the growing organic and natural markets. There continues to be great interest in utilising dairy proteins to offer satiety.?
Both Kerry and Solae cite the need for more products targeting specific demographic groups and health conditions, such as children's nutrition, boomer nutrition, and pre- and post-exercise products.
Mintel sees athletes as the greatest opportunity for growth, and recent research by Kerry, not yet published, concurs that this is one group that could be ripe for tapping. According to its study, nutritional bars tend to be consumed as snacks — 47 per cent between lunch and dinner, and 43 per cent for breakfast. Only 17 per cent of users currently are consuming them with athletic activity.
"The top reason for discontinuing consumption is that the bars are 'too expensive' (47 per cent), followed by 'like other foods better' (23 per cent), and 'don't like their taste' (22 per cent),? says Parle.
Mintel's data suggest that bar consumers have different demands, depending on their age. For those over 45, consumers are "significantly more likely than their younger counterparts to say they look for whole grains, omega-3s and low-glycaemic index. This seems like a recipe for a bar geared toward active baby boomers and seniors,? the report says.
Among the 86 per cent of respondents who select bars for health reasons, the most important attributes are high protein and vitamin/mineral fortification. The perception that bars are like 'a daily vitamin' is particularly strong in those 18-24 years old. "It may be advantageous for a wellness bar to target this group with the message that the product 'makes up' for other less-healthy food choices,? Mintel concludes.
Fortitech foresees more products targeting women with a wide range of concerns, from osteoporosis to PMS to menopause, and bars addressing cardiovascular disease, diabetes, cognitive heath, bone health, weight management and meal-replacement. "Manufacturers are also going to ramp up their use of vitamin D, calcium, magnesium (which will be getting more attention as continuing research brings to light the many benefits of this mineral) and zinc,? Chaudhari said.
Solae sees two hurdles facing manufacturers: cost management and attracting new consumers to the category.
"Bar formulators have been faced with a number of cost increases across multiple-ingredient and packaging inputs, and are trying to manage their margins against these increases,? Heggie says. "In regard to how to attract new consumers, innovation in bar design, delivery and benefits will be key.?
On the formulation front, Fortitech believes a top challenge is making sure bars taste like the flavour consumers expect. Secondly, for products that contain fruit, the water activity within the dough and fruit filling must be comparable, and that's not always easy.
"The transfer of moisture from the fruit component within a bar to the dough component is necessary to ensure a soft, 'tastes-good' product, but excessive moisture will mean a wet and soggy bar,? Chaudhari explains.
For Mitchell May, PhD, founder and CEO of Synergy Production Laboratories of Utah, the greatest challenge ahead may be simple quality in the products.
His company, which produces highly concentrated powders of certified organic and kosher sprouts, berries and vegetables, recently completed a study in conjunction with other research institutions in which they analysed the content of 250 bars on the market in North America.
"Well over 200 of them were really bad,? May says. "They had way too many sugars and way too many fats and calories, and were nutritionally empty. There is tremendous room nutritionally speaking for a vast improvement in bars. The American diet is utterly deficient in whole foods, including fruits and vegetables, and that's where the focus should be.?