A Barrage of Bars

Functional food bars continue to have strong sales even during a slumped economy. The question is, how do you choose which ones to stock?

Who Has Consumed an Energy Bar in the Past Six Months?

The Big Three

How Popular are Functional Bars?

Consider the numbers: 19 percent of adults 18 and older have eaten an energy bar in the last six months; the category has experienced triple-digit growth over the last three years; and it is estimated that by 2006, sales will have grown to $922 million per year. According to Mintel International Group's Chicago office, which provided these figures to HSR: Health Supplement Retailer, energy bars showed phenomenal growth in the last few years, at a rate of 103 percent between 1999 and 2001. In 2000, San Francisco-based SPINS reported more than 700 kinds of energy bars--representing approximately 100 companies--are sold in natural food stores.

According to the May 2002's Consumer Insight from Chicago-based AC Nielsen, time-starved consumers are hungry for convenient, shelf-stable offerings. As a result, energy bar sales were up 40.5 percent for 2001 to $405 million.

"As the category continues to grow, the number of specialty target markets is growing, from those who engage in extreme sports to those who want meal replacement at their desks, to women, to those who want to lose weight," Mintel reported in a March 2002 executive summary of the category.

According to Information Resources Inc. in Chicago, Nestle USA (which owns Berkeley, Calif.-based PowerBar), Berkeley, Calif.-based Clif Bar and Kraft Foods Inc. (which owns Rye Brook, N.Y.-based Balance Bar) are among the top 10 vendors in the snack bar/granola bar category. Together, these three companies have a 13-percent market share with total sales of $198.8 million.

In a November 2000 interview with the Warner Bros. show Extra, Cindy Vallar, PowerBar's general manager, reported that energy bars are no longer geared to just athletes. "With over 100 bar manufacturers currently competing for market share in the category, it is crucial that we remain true to the integrity of the product we put on our shelves," she said.

The energy bar concept took off running in 1986 when the PowerBar was created. At that time, founders Brian and Jennifer Maxwell were trying to create a performance-enhancing food that marathoners could consume during an energy-draining race. "The Maxwells made a bar that was about 45-percent complex carbohydrates and only 10-percent fat," wrote Adam Cohen in his Oct. 28, 1998, Time article, "More Power to You" about bars. "But the trade-off was losing some food-like qualities. ... [Today's bars] are dropping the ascetic rubber-brick ethos in favor of more savory--and fat-laden--formulas that appeal to a wider market."

According to Mike Bengivenga, director of research and product development at Wall, N.J.-based Cytodyne Technologies, "The fat in our bars is probably on average with everyone else's in our bar category, but it's not extremely low like a high-sugar/carbohydrate bar like Slim Fast. You can't cut your fat out in these bars and have them taste good or keep their moisture. Those companies that make the lower fat bars find their products have a very short shelf-life, because you need the moisture to keep it soft and give the product a good shelf-life." He added that the fats in the company's bars are mostly healthy monosaturated and polyunsaturated fats.

The numbers behind these bars show that fat and taste may play a role in sales, but they also show whose marketing is working and if the science behind these functional foods can satisfy consumer needs.

What is Drawing Customers to Buying Bars?

Guerilla marketing campaigns have proven to work well for this category. Extreme sports events, product samplings distributed from eye-catching vehicles and the easy accessibility of Internet-based affinity groups have worked well for energy bar manufacturers. For example, Cytodyne showcases testimonials on its site ("In just three months, I lost 45 pounds") and Clif Bar features an "Eat Well" column on its women-oriented Luna site.

Celebrity endorsers, such as three-time Tour de France champion Lance Armstrong for PowerBar, have also aided the category, according to AC Nielsen. Having a world-class athlete paired with an easily accessible product like energy bars appeals to consumer values such as health, energy and well-being.

Keeping these factors in mind may save retailers a penny or two from investing in bars that will be gone in less time than the company took in creating the bar. For example, Vitafort International Corp. in Los Angeles experienced this when it introduced an energy bar in early 2000. Although the bar was introduced and tested at various retailers, including at the food warehouse Smart & Final, "the sales velocity was not on a par with the competition and the product was later discontinued," according to the company's May 17, 2002, financial report. The company believed that the slow sales were not due to taste, but that the bar was not strong enough to stand on its own without significant advertising and promotional spending.

Promoting a bar is not only a given on the advertising scene--but also on the charitable front, as well. Luna/Clif Bar donated bars to the Breast Cancer Fund's Climb Against the Odds in 2000, and Shaklee, Prolab Nutrition and Boulder Bar donated energy bars during the recovery efforts of Sept. 11.

This philanthropic philosophy may be an effective marketing tool when selling functional food bars--especially when targeting women. According to Faith Popcorn, author of EVEolution (Hyperion, 2001), helping a woman connect to a brand--whether by using a spokesperson she admires or by aiding a cause near to her heart--is integral to selling that product. "Women don't buy brands, they join brands," Popcorn wrote.

As distribution of these bars has broadened, packaging has changed and created higher price points. For example, the trend to offer multiple-serving packs has been gaining momentum. However, the cost of these bars is relatively expensive compared to other snack choices such as a Snickers bar that, on sale, may cost a quarter and may even offer the same benefits, if one study is to be believed. According to Mintel, high prices may make the category vulnerable to the current softened economy.

The top individual sellers in the category are a women's bar (Clif Bar's Luna with $40.1 million in sales for the 12-month period ending July 14, 2002) and a sports bar (PowerBar with sales of $36.2 million during the same timeframe). However, other companies are gaining momentum in the category by offering new ingredients in old stand-bys, like Cytodyne adding triglyceride form conjugated linoleic acid (CLA) in its weight-loss bar. According to Bengivenga, it uses CLA (as Clarinol™ from Channahon, Ill.-based Loders Croklaan-Lipid Nutrition) that does not go rancid, which can happen with bars using CLA.

Also, bars can offer essential fatty acids (EFAs), such as CLA, in a better way than perhaps a powder or tablet can. "EFAs confer undesirable characteristics on powders and thus are very difficult to deliver in capsule, tablet or powdered shake products," said James Gibbons, senior vice president of Melville, N.Y.-based Nature's Plus. "Such characteristics gum up production machinery and render products unstable. But in nutrition bars, EFAs facilitate the production process and can even add a smooth and creamy texture to the product."

Targeting Women's Health

Reportedly, more and more energy bars are being introduced with specific fortifications, such as bone-building calcium, that appeal to women. This makes good business sense, considering the majority of bar consumers are female. SPINS reported that most energy bars are bought by people whose household income is more than $70,000 and have young children. Considering the energy needs and little personal time mothers with small children have, it is no wonder women are a great target market.

"The industry seems, as a whole, to be targeting demographics rather than health concerns," Gibbons said. "Clever marketing spin and focusing on specific consumer groups have proven extremely successful for some brands." He added that some products from other brands simply dress up a standard nutrition bar with a pretty label that appeals to women. "Such bars offer women nothing unique in terms of nutritional profile," he said, like providing extra calcium, iron or folic acid.

Even the flavors of the bars in this category allude to this being a woman's domain: Chocolate Covered Strawberry (Cytodyne's Xenadrine bar), Chai Tea (Clif Bar's Luna bar) and Almond Bliss (Nature's Plus' Especially Yours bar).

The women's bar category is going strong, considering its sales numbers. For example, the woman-targeted Luna bar had a 51-percent sales increase over 2001 (based on July 14, 2002, numbers), a rate that has not slowed down since the bars' introduction in March 1999.

According to Mintel, concentrated soy extracts are shaping the bar category, especially on the female front. At the Third Annual Soyfoods Symposium Proceedings, it was announced that more energy bars are being made with soy, such as Nature's Plus' Spiru-Tein Protein Bar. And according to SPINS and Soyatech's market report, Soyfoods: The U.S. Market 2002, soy product sales grew 16.8 percent in 2001 to reach $3.2 billion. The products associated with this growth? Soymilk, meat alternatives--and energy bars.

"Soy is a nice working material for the bars for holding moisture better," said Cytodyne's Bengivenga. "We also figured the weight-loss market is made up of a high percentage of women, in which soy has shown huge benefits, especially for women's health--it's an excellent women's protein." He added that many other bars in the market get their protein from gelatin, which is cheaper than soy and not a complete protein. "I definitely think that, hands down, this bar will blow away our other bars in terms of consumer demand," Bengivenga said.

He added that weight loss is an issue with big appeal in the women's bar market. The company recently introduced its CLA bar to aid the consumer in losing fat. However, the company originally made a name for itself selling ephedra-based supplements, a big gun in the weight-loss category. "Have we thought about putting ephedra in our bars? Yes. Are we going to do it? No," Bengivenga said. "We want these bars to be used with our products [Xenedrine® RFA-1 with ephedra and Xenedrine® EFX™ with caffeine], so we made them totally stimulant-free."

Targeting Conditions and Consumer Needs

"There are many consumers who want a functional bar formulated for their nutritional needs instead of their demographic grouping," Gibbons stated. Today, the market is oversaturated with bar manufacturers spouting different health benefits to different consumers. How does one tell the difference between them all? Not much research has been done on the bar category as a whole, but what is out there is good to keep in mind when recommending product to the confused customer looking for the perfect bar.

A high-fat bar is not necessarily a bad thing, especially for women. In research from the University of Cape Town Medical School, Africa, it was reported that a sports bar with 7 g of fat, 14 g of protein and 19 g of carbohydrates enhanced fat metabolism but impaired speed during a five-and-a-half hour bike ride (Int J Sports Med, 20, 4:252-7, 1999).

However, in a 1999 study conducted by researchers at the University of Buffalo's School of Health-Related Professions, it was found that female soccer players performed better when on a high-fat rather than high-carb diet. Nine female collegiate soccer players ate one of three diets--their normal diet, their normal diet plus 415 calories of peanuts per day, or their normal diet plus 415 calories from carbohydrate-rich energy bars.

Carbohydrate intake was highest during the energy bar diet (63 percent) and lowest in the peanut diet (51 percent), while fat intake was highest in the peanut diet (35 percent) and lowest on the energy bar diet (24 percent).

Those women consuming the high-fat, low-carb diet performed better, running 11.7 km compared to the 10 km run by those on the normal diet and the 9.7 km for those on the high-carb diet. "Women are better fat metabolizers than men," said Peter J. Horvath, Ph.D., who presented these findings at a Federation of American Societies of Experimental Biology meeting (FASEB, April 1999). "One implication of these findings is that dietary recommendations for women athletes should be different from [those for] men."

Research has demonstrated a high-carb bar may or may not be beneficial, and a candy bar may work just as well as--if not better than--an energy bar. In a 2001 study out of the Human Performance Laboratory at St. Cloud State University in Minnesota, it was found that people consuming Clif Bar energy bars--made up of 70-percent carbohydrates, up to 6 g of fiber and up to 15-percent protein--sustained moderate increases in blood sugar levels (American College of Sports Medicine, May 2001). In the study, volunteers drank either a glucose beverage or ate a bar. Those who drank the beverage had blood sugar levels that rose rapidly and then dropped to 9 percent below baseline--the point when a sugar crash or hypoglycemic reaction may occur. Those eating the bar had blood sugar levels that rose moderately, peaking at 30 to 40 minutes, and never dropped below baseline for the two hours during which the volunteers were monitored.

"You don't want dramatic sugar highs or lows that create a sugar rush followed by a sugar crash," said John Seifert, Ph.D., the lead author of the study, which was funded by a grant from Chesterfield, Mo.-based Shear/Kershman Lab Inc. "Those reactions just sap you of your energy and cause athletes to hit the wall before they reach the finish line."

An Ohio State University, Columbus, researcher, Steve Hertzler, Ph.D., R.D., reported that in a study using one candy bar and two energy bars, one of the energy bars did not moderate an increase in blood sugar, which endurance athletes are looking for to improve performance (J Am Diet Assoc, 100, 1:97-100, 2000).

Volunteers fasted for at least 12 hours before consuming one of four "meals": four slices of white bread, a Snickers bar, Hauppauge, N.Y.-based Twinlab's Ironman PR bar or a PowerBar. Each meal provided 50 g of carbohydrates (the study was funded by a grant from Kent State Univeristy). When testing the effects of these foods on blood sugar levels in 15-minute intervals, Hertzler found both energy bars caused blood glucose levels to peak at 30 minutes, while the bread and candy caused them to peak at 45 minutes. However, while the Ironman PR bar made blood glucose rate remain fairly steady, the PowerBar caused a sharp decline in blood sugar.

Hertzler suggested that the high-carb PowerBar (70-percent carbs) provided the same fast-acting energy as the bread and candy bar, while the lower carb Ironman PR (40-percent carbs) created a more moderate reaction in the body. "Athletes involved in short-duration events who want a quick energy boost should eat a high-carb energy bar or a candy bar," Hertzler stated. "However, endurance athletes would do well to consume an energy bar with a moderate carbohydrate level."

When stocking energy bars, know your customers' wants (weight-loss, muscle-building, meal replacements) and the bars that meet these needs. Even though some research indicates a candy bar may offer the same energy as a functional food bar, at least be secure in knowing the functional food bar has a few more attributes than a chocolate-nougat confection with 15 g of fat and a gram or two of protein.

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