Acquisitions, innovation unlock door to growth for bar category

KANSAS CITY — While the number of nutritional, snack and granola bars being sold may be lower than that of a year ago, the category heading into 2020 looks promising based on an expansive pipeline of products.

Dollar sales in the snack bars/granola bars category totaled $6,367,979,959 in the 52 weeks ended Oct. 6, up 2.4% from the same period a year ago, according to Information Resources, Inc., a Chicago-based market research firm. Unit sales, meanwhile, were down 3.5% from the same period a year ago.

Consumers continued to seek out bars delivering on nutrition, with dollar sales in the nutritional/intrinsic health value bars segment climbing 5% to $3,388,257,525, according to I.R.I.

Clif Bar & Co., Emeryville, Calif., led the way with dollar sales of $843,552,152, up 4.7% from the same period a year ago. During an Oct. 18 educational session at SupplySide West in Las Vegas, Tom Chapman, director of ingredient sourcing at Clif Bar, said the company has made great strides in transitioning brands to organic.

“We had committed to 80% organic by 2020, and I’m proud to announce we’ve hit that goal in 2019,” Mr. Chapman said.

Clif Bar adds organic figs to several of its children’s bar products, and also adds organic oats to its bars, he said.

Meanwhile, changes are afoot at Kind Healthy Snacks, New York, where Michael J. Barkley was promoted to chief executive officer in September. Mr. Barkley joined Kind from Pinnacle Foods in the fall of 2018 as president and chief operating officer. Kind posted dollar sales growth in the nutritional/intrinsic health value bars category of 1.6%, to $332,465,212, in the 52 weeks ended Oct. 6. The company in May entered the frozen category with the launch of Kind Frozen, a frozen creamy nut bar featuring almonds, dark chocolate and sea salt. The product contains 190 calories and 11 grams of sugar per serving.

Then, in October, Kind acquired Creative Snacks Co., High Point, N.C., a manufacturer of cluster-style snacks and trail mixes. The acquisition is Kind Healthy Snacks’ first. It signals that the snack maker is poised to expand its share of the healthy snacking market through a broadened portfolio, according to the company.

Another acquisition that could play a role in reshaping the bar category is Hershey, Pa.-based Hershey Co.’s $397 million purchase of One Brands, L.L.C., a maker of low-sugar, high-protein nutrition bars.

“One Brands is a great addition to Hershey’s growing portfolio of better-for-you snacking brands, and we are excited about getting to work with this talented team,” Mary Beth West, chief growth officer for the Hershey Co., said when the acquisition was finalized in mid-September. “As the nutrition bar category continues to grow, One offers a compelling brand proposition with great-tasting, unique flavors, low sugar and high protein.”

Founded in 1999, One Brands, Charlotte, N.C., features a portfolio of nutrition bars that contain 20 grams of protein and contain 1 gram of sugar per bar. The bars are certified gluten-free and come in flavors such as pumpkin pie, cinnamon roll, chocolate chip cookie dough and white chocolate truffle. One Brands also markets a line of bars sweetened with stevia called One Basix.

At Natural Products Expo East, held Sept. 12-14 in Baltimore, the company unveiled One Plant, a range of plant-based bars with 12 grams of protein and 1 gram of sugar. Varieties include chocolate peanut butter and banana nut bread.

A more recent acquisition of significance to the bar category is Simply Good Foods Co.’s deal for Quest Nutrition, L.L.C. The $1 billion transaction was finalized in November and brings together Simply Good Foods’ Atkins brand with Quest’s portfolio of low-carb and low-sugar protein bars, cookies, chips, pizzas, shakes and powders.

Atkins Nutritionals Inc., Denver, posted nutritional/intrinsic health value bar dollar sales of $289,707,254,000 in the 52 weeks ended Oct. 6, up 25% from the same period a year ago, while Quest Nutrition, El Segundo, Calif., had sales of $245,480,907,000, up 18%, according to I.R.I.

“The acquisition of Quest Nutrition brings together two great nutritional snacking brands that provide the combined business with greater consumer and channel diversification,” said Joseph E. Scalzo, president and c.e.o. of Simply Good Foods. “The combination creates a unique, diversified nutritional snacking portfolio that offers consumers and retailers a broad range of products to satisfy their nutritional snacking needs.”

Another major grain-based foods player expressing interest in the bar category is Mondelez International, Inc., Deerfield, Ill. In an Oct. 29 earnings conference call, Dirk Van de Put, chairman and c.e.o., said the company is considering additional avenues of growth for its belVita biscuit, which could include expansion into the bar category.

“It’s a brand that’s performing quite well, and it’s mid-single-digit growth at the moment, doing quite well, particularly in the U.S.,” Mr. Van de Put said during an Oct. 29 earnings call. “Our evolution for belVita is to offer it in more different forms going into soft-baked, for instance, going potentially to bars and gradually expand the range of belVita to make it a full breakfast offering not only in the U.S. but around the world and potentially also take the brand into mid-morning snacking, which could also be very interesting. And I think the brand has the credentials not only from a branding perspective but also from the active ingredients to make that happen. That’s really our focus for the breakfast occasion for us.”