Cereal bar manufacturers have had to work hard to keep their success going and, as Aidan Fortune finds out, they aren’t stopping their efforts yet
The "perfect on-the-go snack" and "a healthy alternative to confectionery" are just two of the phrases used by manufacturers to describe cereal bars, and while 'perfect' and 'healthy' were apt words to sum up the growth of the market three years ago, that wasn't exactly the case last year.
Although the market still saw growth in 2008/09, it slowed somewhat, dropping from 8.3% to 4% in the 12 months to September 5, 2009. In 2005, Mintel predicted that the category would be worth £373m by 2010. Its forecast appears to be on track (£366m value as of 21 August, 2010, Nielsen), but it seems that similar levels of growth in the future will be very hard to come by.
While this growth is a return to the lofty heights of 2007/08, manufacturers believe that there is room for improvement and aren't risking another blip. "The market has a huge opportunity for further growth as consumers continue to look for healthy and tasty snacking options," says Jordans marketing director Carol Welch. "Key to growth will be making cereal bars available to consumers in convenience outlets to ensure a healthy choice is offered, and for both manufacturers and retailers to support the category and drive awareness, and encourage consumption across the family and throughout the entire day."
Kellogg's head of the specialty channel Chris McLaughlin says that for the market to grow there has to be more of a focus on functional benefits. "Fibre Plus has been successful because it provides 20% of a person's recommended daily allowance in one bar," he says. "I see similar products that make vitamins and required minerals easily accessible to the public driving the category even further."
The Fibre Plus cereal bar was released in January and has amassed sales of £3m in the UK.
When looking at how to grow market share of its Nature Valley brand, General Mills decided to go straight to the frontline. Marketing director Ed Culf says: "Retailer feedback played a pivotal role in the decision to push pricemarked packs and the ready-to-display case as these are the elements that retailers felt would drive impulse sales."
General Mills has also invested significantly in highlighting the natural elements of the product through a £4m marketing promotion during the summer involving TV ads, a sampling campaign and sponsorship of picnic events in Edinburgh, Manchester and Derby. Nature Valley is set to return to TV screens next February and Culf says that this investment is crucial for both the brand and the category.
In an effort to improve on the success it has seen with Alpen and Weetos cereal bars, Weetabix extended its range last year with Oaty bars. They contain no artificial colours and flavours, and are aimed at mothers who want to give their children a healthy treat. A year on from this npd and the company is citing the growth of its cereal bar range as one of the main reasons it turned a profit this year. Marketing controller Tony Corp says: "Oaty bars are achieving strong rates of sales and have reached similar penetration targets to more established brands in the market."
Although cereal bars are traditionally a morning product, manufacturers are looking to move them into afternoon snacking in an effort to grow sales. McLaughlin says that to do this Kellogg's may be following the lead of high-profile brands such as Coca-Cola by endorsing meal deals in stores. "Due to the explosion of food to go in the convenience channel, cereal bars need to adapt so that consumers see them as a lunchtime snack as well as a breakfast product," he says.
"Breakfast will always be a priority for Kellogg's, but we believe there is opportunity to grow the category and our brand by encouraging retailers to sell cereal bars as part of a meal deal alongside a drink and some fruit."
Brands are showing that they are willing to invest time and money in this potentially lucrative category. If the new direction is handled correctly retailers, too, will be reaping the benefits.
Ones to watch
Harvest festival
Jordans Cereals has added to its Frusli range with an apple, sultana & cinnamon variant available now in a multipack of six. The bars contain 25% fruit and British oats. The bars come in contemporary packaging to help them stand out. rrp: £1.79 tel: 0800 587 8901
Uber cool
Stoats Porridge has released the Uber bar. Dairy- and wheat-free with no added sugar, the Uber bar is available in strawberry & coconut flavour. The product is designed to meet the snacking needs of people with food allergies. rrp: 99p tel: 0131 657 9955
Fair play
Traidcraft has revamped its Geobar range to include more Fairtrade ingredients. The chocolate, apricot, mixed berries and fruit, nut & honey variants all come in new packaging that highlights their Fairtrade credentials. rrp: £1.64 tel: 0845 330 8900
The "perfect on-the-go snack" and "a healthy alternative to confectionery" are just two of the phrases used by manufacturers to describe cereal bars, and while 'perfect' and 'healthy' were apt words to sum up the growth of the market three years ago, that wasn't exactly the case last year.
Although the market still saw growth in 2008/09, it slowed somewhat, dropping from 8.3% to 4% in the 12 months to September 5, 2009. In 2005, Mintel predicted that the category would be worth £373m by 2010. Its forecast appears to be on track (£366m value as of 21 August, 2010, Nielsen), but it seems that similar levels of growth in the future will be very hard to come by.
Merchandising:
Singles vs Multipacks
Given their space constraints retailers are more likely to stock single cereal bars rather than a range of multipacks. But is it worth squeezing a couple of lines in? Jordans marketing director Carol Welch believes so. "Shopping missions in convenience stores are skewed towards an immediate on-the-go occasion," she says. "However, as the convenience market continues to improve competitiveness against the multiples and enjoys more top-up shops, multipacks will become a bigger opportunity."
Honey Monster marketing manager John Price agrees. "Single bars and multipacks serve different occasions, but both have a home in the convenience channel. People generally pick up a single bar to eat straightaway, but there are opportunities for multipacks such as mums buying for lunchboxes."
But things are changing. When it became clear the bubble had burst, manfacturers were forced to rethink their strategies. To combat the slowdown, brands introduced new variants and sought to target different demographics in a bid to boost sales. It worked in the 12 months to September 11, 2010, the market saw a 7% increase in value sales (IRI). Singles vs Multipacks
Given their space constraints retailers are more likely to stock single cereal bars rather than a range of multipacks. But is it worth squeezing a couple of lines in? Jordans marketing director Carol Welch believes so. "Shopping missions in convenience stores are skewed towards an immediate on-the-go occasion," she says. "However, as the convenience market continues to improve competitiveness against the multiples and enjoys more top-up shops, multipacks will become a bigger opportunity."
Honey Monster marketing manager John Price agrees. "Single bars and multipacks serve different occasions, but both have a home in the convenience channel. People generally pick up a single bar to eat straightaway, but there are opportunities for multipacks such as mums buying for lunchboxes."
While this growth is a return to the lofty heights of 2007/08, manufacturers believe that there is room for improvement and aren't risking another blip. "The market has a huge opportunity for further growth as consumers continue to look for healthy and tasty snacking options," says Jordans marketing director Carol Welch. "Key to growth will be making cereal bars available to consumers in convenience outlets to ensure a healthy choice is offered, and for both manufacturers and retailers to support the category and drive awareness, and encourage consumption across the family and throughout the entire day."
Kellogg's head of the specialty channel Chris McLaughlin says that for the market to grow there has to be more of a focus on functional benefits. "Fibre Plus has been successful because it provides 20% of a person's recommended daily allowance in one bar," he says. "I see similar products that make vitamins and required minerals easily accessible to the public driving the category even further."
The Fibre Plus cereal bar was released in January and has amassed sales of £3m in the UK.
When looking at how to grow market share of its Nature Valley brand, General Mills decided to go straight to the frontline. Marketing director Ed Culf says: "Retailer feedback played a pivotal role in the decision to push pricemarked packs and the ready-to-display case as these are the elements that retailers felt would drive impulse sales."
General Mills has also invested significantly in highlighting the natural elements of the product through a £4m marketing promotion during the summer involving TV ads, a sampling campaign and sponsorship of picnic events in Edinburgh, Manchester and Derby. Nature Valley is set to return to TV screens next February and Culf says that this investment is crucial for both the brand and the category.
In an effort to improve on the success it has seen with Alpen and Weetos cereal bars, Weetabix extended its range last year with Oaty bars. They contain no artificial colours and flavours, and are aimed at mothers who want to give their children a healthy treat. A year on from this npd and the company is citing the growth of its cereal bar range as one of the main reasons it turned a profit this year. Marketing controller Tony Corp says: "Oaty bars are achieving strong rates of sales and have reached similar penetration targets to more established brands in the market."
Top five
1. Kellogg's Special K cereal bars £38.8m
2. Kellogg's Rice Krispies Squares £37.1m
3. Kellogg's Nutri-grain £25.1m
4. Kellogg's Cereal and Milk Bars £19.1m
5. Nature Valley Granola £17.7m
(52 weeks value from IRI, week ending Sept 11, 2010)
McLaughlin believes that this wave of innovation won't come to an end just because the market is back on track. "It's currently a female-orientated market so I think there will soon be a focus on cereal bars that appeal to men, be they larger than the regular size, or specific flavours, but it's definitely something we're looking at," he says.1. Kellogg's Special K cereal bars £38.8m
2. Kellogg's Rice Krispies Squares £37.1m
3. Kellogg's Nutri-grain £25.1m
4. Kellogg's Cereal and Milk Bars £19.1m
5. Nature Valley Granola £17.7m
(52 weeks value from IRI, week ending Sept 11, 2010)
Although cereal bars are traditionally a morning product, manufacturers are looking to move them into afternoon snacking in an effort to grow sales. McLaughlin says that to do this Kellogg's may be following the lead of high-profile brands such as Coca-Cola by endorsing meal deals in stores. "Due to the explosion of food to go in the convenience channel, cereal bars need to adapt so that consumers see them as a lunchtime snack as well as a breakfast product," he says.
"Breakfast will always be a priority for Kellogg's, but we believe there is opportunity to grow the category and our brand by encouraging retailers to sell cereal bars as part of a meal deal alongside a drink and some fruit."
Brands are showing that they are willing to invest time and money in this potentially lucrative category. If the new direction is handled correctly retailers, too, will be reaping the benefits.
Ones to watch
Harvest festival
Jordans Cereals has added to its Frusli range with an apple, sultana & cinnamon variant available now in a multipack of six. The bars contain 25% fruit and British oats. The bars come in contemporary packaging to help them stand out. rrp: £1.79 tel: 0800 587 8901
Uber cool
Stoats Porridge has released the Uber bar. Dairy- and wheat-free with no added sugar, the Uber bar is available in strawberry & coconut flavour. The product is designed to meet the snacking needs of people with food allergies. rrp: 99p tel: 0131 657 9955
Fair play
Traidcraft has revamped its Geobar range to include more Fairtrade ingredients. The chocolate, apricot, mixed berries and fruit, nut & honey variants all come in new packaging that highlights their Fairtrade credentials. rrp: £1.64 tel: 0845 330 8900
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