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The Energy Bar Industry

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Energy Bar Overview
The energy bar market grew from a grass roots effort focused on the consumer base of performance athletes. These athletes usually obtained products at competitive events that were geared towards the everyday consumer. The build up of this market is attributed to PowerBar, but there was significant contribution from others.
PowerBar and the Market
PowerBar began as a company seeking to create a performance-enhancing food that marathoners could consume during an energy-draining race. Initially, the product was marketed and distributed at bike shops and events where running and biking were the competition medium. As this new category began to expand, new entrants began to enter the market. These new entrants began to segment the food bar market into several categories. The primary consumers of the food bar market can be separated into three major segments: energy bars, sports bars, and weight loss bars.
In the US, the food bar market is dominated by several companies: PowerBar, Balance Bar, Luna, MetRx, and Clif Bar. Each of these is representative of one of the three major segments in the bar market.
In terms of similarities, the food bar industry as a whole seems to be targeting demographic rather than their target segment. Marketers are focusing more of their dollars into packaging their products to appeal to women. This can be seen by the focus on flavors such as Chocolate Covered Strawberry (Cytodyne's Xenadrine Bar), Almond Bliss (Nature's Plus Especially Yours Bar), and Chai Tea (Clif Bar's Luna Bar).
While some companies in the food bar industry are more a focus on women, they are able to differentiate by the type of women they market to base on the segment each company focuses on (i.e. sports, energy, and weight loss). Women in each category have specific needs that need to be met. For example, an energy bar would appeal to a woman who is a busy executive on the go and has limited time to stop for a meal. Whereas a woman who is concern about maintaining her shape would be the focus of weight loss bars.
PowerBar and Its Competitors Market View
PowerBar looked at the market from an energy perspective of creating a bar that focused primarily on men. However, this limited view allowed them to miss the concept of creating bars focused on women. Their close competitor, Clif Bar, built a solid brand for itself. However, Clif Bar recognized that the market was heavily focused on males and was missing the opportunity to bring women into category. Clif Bar had major success with the launch of Luna Bar.
Luna Bar saw that women were not being properly targeted and marketed. Luna positioned itself as being created "by women for women" to address their needs. Luna's recognized that women have interest driven by several needs and interests. These needs and interest will directly influence their purchasing behaviors.
Balance Bar paired its approach to go hand in hand with the Zone Diet. The Zone Diet focused on reduced carbohydrates by balancing them with protein and unsaturated fats. Balance Bar focused more on the fact that consumers were interested in more than energy from carbohydrates, but more of a balanced approach to nutrients.
MetRx, which greatly influenced the sports protein bar market, became popular with members of the bodybuilding industry and then with consumers outside of that industry. MetRx helped drive the market for protein bars. In addition, MetRx marketed the awareness for the need of high protein supplementation for weekend athletes in addition to current market of bodybuilders and serious athletes. Rapid growth of this segment will continue as more consumers outside of the bodybuilding industry are made aware of the benefits of sports bars.
Innovation and Opportunities
One of the key opportunities for companies in the food bar industry is to focus on specific age groups and health conditions. Karen Holliday, marketing manager at Kerry Ingredients-Kerry Sweet Ingredients states "The over-50 crowd is one of the largest population segments and one of their health issues is arthritis". Also, she said "We've found chondroitin and glucosamine are a clinically proven formula that could easily be included in bars." In addition, the diabetic market has an incredible unmet need. Many individuals affected by Type 2 diabetes will start making different dietary choices and products with a low glycemic index will mean a lot to them.
Research indicates that mothers are the biggest single purchasers of energy bars. Companies can find a niche marketing bars that are appropriate for both the parents and children.
The energy bar market in European countries is underdeveloped. This is attributed primarily to the fact that each European country has its own nutritional habits and food culture and that the people are more into natural foods than processed foods. However, with busy lifestyles and shortage of time becoming common throughout the world no matter the culture, there will be a need of food bar usage.
With the growing Hispanic population, there is a huge potential to market to this untapped demographic. Research shows that the average Latin consumer eats more bars than would be demographically common to other groups. With this in mind, marketers of these companies would be wise to understand what segment of the food bar category appeals to this growing population, in addition to what flavors are preferred.
Finally, food bar companies can expect more innovation in the form of stretching the brand. Companies can look to stretch their brand by looking for growth opportunities in markets that are similar to bars such as drinks, gels, and powders.
Substitutes and Threats
One of the main substitutes for energy bars is eating a balanced diet of fresh fruit. The thought behind energy bars is that they are easy to package and consumer. However, those willing to take extra time to pack their lunch or exercise bag will see no need for an energy bar. In addition to fresh fruit, there are current products on the market that do not necessarily fall into the energy bar category that can be substitutes. One of these products is granola bars. The makers of Nature Valley Granola Bars promoted their product as the "Original Energy Bar" several years ago.
With the increased concern over content of food products, one of the major threats to the food bar industry is research that may show that the contents are as healthy as companies market them to be. This could lead to a number of the core consumers looking for alternative sources of food bars such as health foods stores or making their own. If there is no proactive research to improve the ingredients and ensure the consumer that the company has their health in mind, there could be a mass exodus from certain brands.
Conclusion
Each brand mentioned created products that created new niches in the food bar market. PowerBar started the entire process and their innovation was due to them bringing the energy bar to market. It enabled consumers to consume food bars that they could eat on the go. Clif Bar, following the same beginnings as PowerBar, created the market for women and targeted creating products to meet their needs. Balance Bar introduced convenient food for balanced nutrition to pair with specific diets. Finally, MetRx brought the high-protein market to the food bar industry and differentiated its product by using a branded protein mixture and appealing to a new group of consumers.
PowerBar will continue to be recognized as the industry leader as long as they are able to innovation and not take the emerging markets for granted. By understanding what makes each of its competitors strong, PowerBar will be able to capitalize on their weakness and build products that will gain market share through the use of its existing brand.

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