NEW YORK CITY -- The U.S. snack bar market has grown at twice the rate of other snack foods and nearly three times the rate of the overall packaged food sector over the past 10 years, according to a new report from Rabobank.
In the report titled "Never Eat More Than You Can Lift," Rabobank's Food & Agribusiness Research and Advisory group cites that neither of the past two recessions has had much impact on snack bar category sales. The bank, a global leader in food and agribusiness financing, forecasts strong continued growth in the category in the years ahead, powered by favorable consumption trends and expanded distribution channels.
The U.S. market for snack bars has more than doubled to almost $6 billion over the past decade, averaging 6.4% annually, according to the report. That far outpaces the 3.5% growth of the $34 billion savory snack market, including chips and pretzels, and modest 2.4% growth of the wider packaged food segment.
"Snack bars are one of the few bright spots in today's U.S. processed food market," said Nicholas Fereday, author of the report and Rabobank analyst. "By capitalizing on consumer trends and evolving demographics, snack bars have found broad appeal among a large consumer base that ranges from athletes to couch potatoes, from working mothers to professionals on the go."
Several factors have helped drive the category's success, according to the report. One of them is the multi-purpose appeal of snack bars to a broad range of consumers. For example, high-protein bars appeal to athletes looking to bulk up and to dieters trying to suppress their appetites.
Flexibility in where and when to eat snack bars also makes them attractive, relevant and convenient for today's consumers. Another plus for the category, according to Rabobank, is a trend toward increased snacking between meals, which creates more eating occasions. Broad retail distribution in delis, dollar stores, gas stations and grocery stores encourage impulse consumption, a key driver in many snack and candy purchases.
Within the snack bar market -- comprised of breakfast, energy and nutrition, fruit, granola/muesli among others -- Rabobank estimates that energy and nutrition bars account for more than one-third of sales, which grew 9% annually between 2007 and 2012. It attributes most of the growth to Clif Bar & Co., which has led the market since 2008.
Three companies -- General Mills, Kellogg's and Clif Bar -- own almost 60% of the U.S. snack bar market and boast seven of the top 10 brands. General Mills alone owns about one-quarter of the market, and its high profile campaign to improve nutritional content has led to strong growth of its Nature Valley, Betty Crocker, Fiber One, and Larabar brands, according to Rabobank.
Kellogg's, the leading category brand, has successfully expanded its iconic breakfast brands -- Kashi, Rice Krispies, Nutri-grain, and Special K -- across multiple snack bar formats.
Confectionery companies that have extended their candy brands into the snack bar space are reportedly the one segment of the category that have been limited in their success. This suggests there is a line between snack bars and candy that cannot be crossed, according to Rabobank.
"Candy is perhaps too much of a challenge to the wholesome, active image of the snack bar, particularly energy bars," said Fereday. "Snack bars are perceived as contributing to better health and, up until now, have been less associated with the empty calories of soft drinks and candy."
There's still significant room for growth in the snack bar category, according to Rabobank. One driver, the bank predicts, will be the persistent consumer trend toward greater convenience, portability, and health and wellness. Another will be the potential for manufacturers to expand their iconic brands from the wider food and snack categories into the snack bar segment.