Build a Better Bar

Given today’s hectic lifestyles, eating on the go is a regular occurrence. Convenience-minded food options abound, but today’s informed consumer wants options that are also tasty and good for them and their families.

Breakfast and snack bars are perfectly poised to answer the call for portable and nutritious packaged foods. However, recent lackluster sales for both store brands and name brands could be interpreted as a signal that consumers are looking for something more — more variety new flavors and exciting ingredients — to get them excited about breakfast and snack bars again.

Wholesome approach

According to a March 2013 report from global market research firm Mintel, titled “Cereal Bars and Snack Bars — US,” snack positioning of the category should be a key focus of product promotion. But as consumers become more health-conscious and interested in exploring new product offerings, the report says, they will continue to be more particular about the types of snacks they choose. To grow store brands’ share of the market, retailers will have to make sure they are giving their shoppers what they want.

In fact, consumers’ desire for better-for-you options is shaping the category and leading to greater segmentation, according to Michael Halverson, vice president of Chicago-based Schulze and Burch Biscuit Co.

“By that, I mean we’re seeing bars that are surfacing that are very specific to what a consumer wants,” he explains. “For example, there may be some very high-protein bars which could be differentiated from some probiotic bars, which could be differentiated from some high-fiber bars.”

While these product offerings are very specific, they all fall under the in-demand better-for-you umbrella.

“As the whole category continues to evolve,” says Robert Boutin, president of Skokie, Ill.-based Knechtel Inc., “the trend now is to make them more focused on better health.”

Product examples include vegan bars, all-natural bars, organic bars and products with better-for-you recipes.

“People are looking more toward natural and more wholesome ingredients in their bars because it is part of their balanced diet or consumption,” he adds. “They want better fats, [fewer] allergens and better ingredients.”

For instance, some manufacturers are removing sugars and replacing them with evaporated cane juice, or using rice syrup in place of glucose or corn syrup, Boutin explains.

Michael Lines, vice president of sales and marketing for Markham, Ontario-based Shandiz Natural Foods, pinpoints several other up-and-coming trends worth noting in the breakfast and snack bars segment, including savory flavors (such as chili), super fruits (such as acai and goji) and ancient grains.

Ingredients such as amaranth, baobab and chia seeds are also growing in popularity, he adds. But protein bars, specifically those in the 7-gram to 10-gram range, are getting the lion’s share of the attention.

“A lot of the national brands are launching protein bar offerings,” he explains. “But there isn’t anyone really using a non-dairy source of protein.”

He believes a market exists for non-dairy protein sources such as those that are hemp- or quinoa-based.

Time’s a-wastin

The breakfast and snack bars category is being inundated with a whole slew of trends in ingredients, formulations and other developments. But most retailers cannot afford to tackle every trend all at once. But they also cannot afford to sit back and take their time.

“Be a fast follower,” Halverson advises. “Make sure that the space that is utilized for store brands is utilized for opportunities that have staying power for consumers, and try to identify those trends fairly quickly to differentiate between a fad and a real trend.”

But retailers also have a chance to take the lead here, Boutin says.

“I think [retailers] are missing opportunities to establish themselves as leaders or maybe even missing out on capitalizing on higher profit margins by not being able to be closer to the cutting edge,” he says. “Retailers should be more proactive rather than reactive to trends in the marketplace.”

The fact that breakfast and snack bars fared well during the recent recession, the Mintel report suggests, is proof that the category is viewed as an affordable indulgence.

“I think the good thing is that consumers seem to be willing to pay a premium or accept a premium-quality product or better-for-you quality products,” Boutin offers, “which makes it possible for private labelers to offer them.”

But retailers need to be very aware of just how far upstream their store brands are moving as it relates to product offerings.

“One retailer made a push into organics heavily with their store brand, but it was not a good fit,” Lines recalls. “The product was too premium, and the brand was too value-based and it failed.”

He advises retailers to make sure their margin and economic expectations are in check when deciding to move their private label upstream toward premium or ultra-premium breakfast and snack bar offerings.

Tap into marketing opps

Similar to what can be found in other convenience food categories, retailers have a bevy of opportunities to promote and merchandise store brand breakfast and snack bars. Although many of the ideas are simple, their value cannot be understated.

“We are strong believers in differentiating your promotional time periods from the brands and getting out in front of the brands on any seasonality that exists,” Halverson says. “If your promotional schedule puts the private brand out two to four weeks ahead of what the brand’s schedule is going to be, you’ll avoid pantry loading [tied to] the brand.”

Fulfilling the consumer’s desire for variety also is important.

“One retailer, for example, merchandises multiple variety packs even in the same display unit,” Lines says. “So instead of one flavor, you’re giving the consumer mixed flavors.”

This mixed-pack approach is a very simple but innovative form of merchandising, he adds.

“It really gets down to making sure that you’ve got the proper assortment and you participate in providing private label shoppers the opportunity to purchase the products at your stores,” Halverson adds.

Positioning their product offerings in both the breakfast aisle and the snack aisle presents another huge opportunity for retailers.

“We’re all eating on the run or ‘grazing’, which is snacking throughout the day,” Boutin explains. Expanding from the breakfast aisle toward the snack aisle is a natural step, he adds.

Healthy future

As the next few years progress, retailers and consumers alike can expect to see the entire breakfast and snack bar category continue to change and evolve. But any new developments will need to mesh with the better-for-you format and include a variety of premium ingredients and premium product positioning.

Boutin believes the category has not peaked yet and that its inherent convenience and health halo spell opportunity for store brands.

“[Store brands] can offer equal or better quality for a better value,” Lines says. “It’s not just about a cheap breakfast bar; [some] retailers are looking at some exotic, cutting-edge things in these product offerings.”

Do consider non-dairy protein sources such as hemp or quinoa in development of own-brand protein bars.

Don’t introduce premium or ultra-premium breakfast and snack bars under a store brand that is associated with value.

Do consider a promotional schedule that’s two to four weeks ahead of the national brands’.

Don’t limit bar placement to the breakfast aisle — consider placing store brand bar items in the snack aisle, too.