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Market Trends, Formulation Strategies and Tips for Marketing Nutrition Bars

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Market Trends, Formulation Strategies and Tips for Marketing Nutrition Bars Vol. 6, No. 5 March 2016 naturalproductsinsider.com US$20.75 Raising THE BAR Market trends, formulation strategies and tips for marketing nutrition bars Expo Hall April 28 & 29 CONTENTS naturalproductsinsider.com Vol. 6, No. 5 March 2016 p.3 Viewpoint: Bars Galore p.26 New Bar Products Are Worldier, Healthier New launches in the nutrition bar space are breaking away from traditional energy, diet, breakfast and sports nutrition bars by using p.5 so-called superfood ingredients from around the world. Steve Myers details how flavors, ingredients and consumer demands are influencing innovation in the bar sector. The Business of Bars: Market Ready for Purposeful, Premium Products A multibillion dollar category in their own right, bars have hardly run their course. Whether focused on clean label, high protein, indulgence, meal replacement, children’s snacking or anything in between, consumers are amenable to bars, particularly as the product offerings evolve to better meet their needs—and desires. Karen Butler explores the global bars market and up-and-coming trends driving premium growth in the category. p.31 The Evolution of Marketing Nutrition Bars Nutrition bars are a popular staple of the healthy snack industry and are increasingly marketed as p.17 products that can provide fitness fanatics with bursts of energy—banishing sluggishness and helping them to reach their workout goals. Lindsey Carnett discusses marketing bars to Raising the Nutritional Bar: Functional women, the non-genetically modified organism Ingredients and Formulation Strategies (GMO) trend and the future innovations expected in bars. for Building Better Bars Bars have come a long way since the early 1980s. Today, bars have exploded beyond the sports arena and appeal to a wide range of consumers. But as the global bar category evolves, so too have consumers’ expectations for convenient, portable products that p.36 deliver taste and functionality. Judie Bizzozero examines on-trend functional ingredients for bars, as well as formulation strategies for developing Takeaways for Your Business nutrition bars. 2 INSIDER Raising the Bar Digital Issue March 2016 Viewpoint Bars Galore In the early 1980s, nutrition bars were popularized by runners who turned to protein-packed portables to aid in energy, endurance and recovery. Fast-forward 30 years, and nutrition bars appeal to a wide range of consumers—from kids to seniors—looking for convenient, nutritious products that deliver taste and functionality. In fact, the bar sector is experiencing explosive growth on a global level, even crossing over into the snack sector. According to recent market data, the energy and nutrition bar segment has emerged as one of the fastest-growing categories in packaged food in the past five years thanks in part to innovative bar formulations and formats that don’t sacrifice taste, texture or nutritional value. In terms of consumption patterns, Leatherhead Research claimed U.S. penetration of energy and nutrition bars is highest among those aged 25 to 54 years, and cereal and snack bar consumption is generally highest among college-educated consumers. This is a statistic that rings true in my household. If you take a peek in our kitchen pantry, you will find a multitude of different bars designed and marketed for our multigenerational family. My 8-year-old daughter prefers softer, fruit-filled cereal bars as a snack before softball or tennis practice, while my husband gravitates toward protein bars drizzled with chocolate. I find myself searching for bars that have a balance of protein, fiber and tasty inclusions— and I am always looking for products with clean-label ingredients. Lastly, my 80-year-old mom prefers bars packed with fiber and protein (and a little chocolate) to aid with digestive health and provide a boost of energy to keep up with a busy grandchild. No doubt other consumers are just as choosy as we are. This means product developers will continue to raise the bar to provide tasty and functional bars to hungry consumers. But the bottom line is taste is king. All the functional ingredients and all the marketing efforts won’t matter if the bar is not enjoyable over its entire shelf life. This Digital Issue explores the global bars market and up-and-coming trends driving premium growth in the category; on-trend functional ingredients being used in bars, as well as formulation challenges and solutions; new bar launches and key factors that influence innovation; and the evolution of marketing nutrition bars. Cheers, Judie Bizzozero Managing Editor (480) 990-1101 ext. 36019 [email protected] @judiebizz 3 INSIDER Raising the Bar Digital Issue March 2016 !!"& & & & & "!"&&"& & & & & & & & && !& &" !&! &!& & !&! !&!$!"& &"!!&%"& &#& Bars Market Data The Business of Bars: Market Ready for Purposeful, Premium Products by Karen Butler INSIDER's Take Bars focusing on nutritional profile, Although breakfast is prime time for In the past five years, energy and minimal processing and high-quality bar consumption, many manufacturers nutrition bars emerged as one of ingredients have become major forces have failed to differentiate or fortify the fastest-growing categories in in snacking. products. packaged food. According to Euromonitor’s 2015 category report “Biscuits and Snack Bars in the U.S.,” over the 2010 to 2015 review period, energy and nutrition bars emerged as one of the fastest growing categories in packaged food, with value sales growing by 88 percent in current terms. Snack bars’ compound annual growth rate (CAGR) grew by 3 percent in 2015, compared to the review period average of 4 percent and year-on-year growth of 7 percent in 2011. As the popularity of snack bars continues to grow, the category added US$1.2 billion in sales between 2010 and 2015, and now emerges from a much higher base. This growing base was one key reason behind the category’s relative slowdown in 2015. During this period, brands such as Clif Bar, LÄRABAR® and KIND® touted the nutritional profile, minimal processing and high-quality ingredients of their products and witnessed incredible growth, emerging from relative obscurity to become major forces in snacking. Euromonitor International noted many of these companies also maintain a hip, socially conscious lifestyle image that appeals to younger, more affluent consumers. In fact, in 2015, as high-priced energy and nutrition bars like KIND continued to gain share, their growth had an upward effect on overall unit prices in the category. Energy and nutrition bars continued to register strong growth in 2015 with a slew of innovative product launches. Euromonitor International estimated value sales grew by 10 percent in current terms, as these products moved beyond the gym bags of athletes and dieters and into more people’s handbags and desk drawers. In an attempt to capitalize on the snack bar craze, manufacturers in other food categories sought to enter snack bars for the first time in 2015. In August, for instance, confectionery giants Hershey and Mars introduced innovative products. Mars launched a new line of snack bars under the Goodness Knows brand, while Hershey debuted Brookside Fruit and Nut Bars. Euromonitor International concluded as snack bars increasingly incorporate chocolate, fruit and other sweet ingredients, they represent a growing threat to candy bars given their indulgent flavors, but relatively better-for-you positioning. The market research firm predicted U.S. sales in the biscuits [cookies] and snack bars category to reach $23.3 billion by 2020. IN THIS ISSUE Viewpoint p.3 Bar Formulation p.17 Table of Contents p.2 5 INSIDER Raising the Bar Digital Issue March 2016 ANCIENT GRAINS EXPELLER- PRESSED OILS PROTEIN CRISPS From FIRST SIGHT to LAST BITE The most appealing bars and snacks offer both nutritious ingredients and great taste. With extruded inclusions, reliably sourced veggies and grains, and non-GMO ingredients, Bunge helps you build an exceptional treat— with a clean label. | BungeNorthAmerica.com Call (800) 528-4633 Bars Market Data In terms of current sales, according to IRI Market Advantage™ for the 52 weeks ending Dec. 27, 2015, across IRI’s multi-outlet plus convenience geography, nutritional/ intrinsic value bars showed strong growth. Dollar sales were up 10.6 percent (total dollar sales US$2.9 billion), with unit sales up 8.3 percent. By comparison, granola bars were flat (dollars increased by 0.5 percent; units by 0 percent), as were breakfast/cereal/snack bars (dollars decreased by 0.6 percent; units increased by 0.2 percent). In nutritional/ intrinsic value bars, the convenience channel saw the strongest growth (dollars increased by 15.3 percent; units increased by 11.6 percent). Susan Viamari, IRI’s vice president of thought leadership, also pointed to proprietary SPINSscan Natural Cereal/Snack Bars and Specialty Gourmet calendar year 2015 versus 2014 data, which indicated within the natural foods channels, Three-quarters lifestyle/wellness bars saw strong growth (dollars up by of U.S. consumers 5.6 percent; units up by 10.7 percent). She noted in who buy cereal/snack bars eat them specialty food channels, lifestyle/wellness bars also as a snack between meals, and performed quite well (dollars up by 19.1 percent; units up by 16.2 percent). Lastly, diet bars were down 1.3 percent Over eat them as a portable (dollars) in the natural foods channel, but up 4.7 percent in 60% breakfast option specialty/gourmet. Demographics Understanding how consumers perceive and use bars U.S. penetration of energy is crucial to creating a successful product. “Three-quarters and nutrition bars is highest of U.S. consumers who buy cereal/snack bars eat them among those aged as a snack between meals, whilst over 60 percent eat them as a portable breakfast option,” reported Jonathan 25 to 54 years, and cereal and snack bar Thomas, principal market analyst, Leatherhead Research consumption is generally highest Ltd.
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