Clean labeling and diverse options bolster category sales, attract new customers.
By Pat Pape, Contributing Editor
Each day after Jen Morton’s workout, she reports back to her husband on what snacks her fellow health enthusiasts brought to the gym that day. In turn, Ryan Morton, category manager for snacks, HBA and grocery at Maverik of Salt Lake City, investigates his wife’s tips.
“I also shop a lot in the health food stores,” Morton said. “I go in and try to find someone who knows what they’re talking about. I ask ‘What’s selling?’ and just pick their brain. Obviously, health food stores have 30-40 feet of bars, but I get a feel about what’s working.”
Today, a lot is working well in the health, protein and energy bar category. According to the NACS’ 2016 State of the Industry (SOI) report, 2015 c-store sales jumped 11.4% over 2014, while granola/fruit bars were up 2.8%. Data presented at the NACS SOI is preliminary and derived from company submissions as of March 31.
“We’re doing well in snacks and have been fortunate enough to see double digits for a few years,” Morton said. “We’ve seen new players come to the market. Previously, some of the energy bars were, for the lack of a better word, kind of blah. Now they’ve got flavors and profiles that people enjoy.”
“Peanut butter and chocolate chips and caramel are the ingredients we’re seeing the most success with,” he added. “You’ve got to enjoy the bar. You can’t just chew it up and wash it down with water.”
SELECTION ON DISPLAY
Nutrition and energy bars are experiencing continued growth this year at the nearly 1,000 Corner Store locations, owned and operated by San Antonio-based CST Brands, around the country. Sales across both segments are robust, with nutrition bars slightly outpacing energy/protein options during the last 12 weeks.
“This category has been flooded with new items over the last few years,” said Amy Hobson, CST Brands’ category manager, snacks. “Some have risen to the top, while other, longer-term brands continue to lead the category. Top sellers (at Corner Store) include Nature Valley, Clif, Kind and Quest.”
Maverik has also seen positive performances from Quest and Clif bars. “Kind is more of a treat bar, but good for us,” Morton said. “And some single bars have filled in, such as the Pepsi Gatorade whey protein bar.”
Manufacturers are being more innovative, giving customers a broader selection of options, whether they’re seeking a post-workout snack, a meal replacement or a better-for-you indulgence.
“There’s a bar for everyone,” Hobson said. “As consumers with specific nutrition or diet needs continue to look for more healthful items, the assortment spans and offers broad appeal across multiple demographics.”
According to Brian Adam, category manager for the 23 Redwood Market outlets based in Rohnert Park, Calif., “We’re able to target some micro-segments because of the diversity of the offerings. You have the traditional protein bar like a Power Bar or Met-Rx and your nut bar like the Kind bar. Then, there’s Nature’s Valley with a different customer segment and the Clif bar, which is an active lifestyle bar.”
DIVERSE DEMOGRAPHICS
At Square One Markets, a nine-store chain based in Bethlehem, Pa., Lisa Dell’Alba, CEO, sees fitness buffs, Millennials and busy parents buying a variety of health bars.
“But I’m also seeing Bubba—the younger Bubba—pick up meal replacement bars,” Dell’Alba said. “They come in and grab a sandwich and a bar. A lot of these guys don’t have time to eat a meal during the work day.”
Protein is important to the health/energy bar customer. According to a research report on Snack, Nutrition and Performance Bars released in May by Mintel, the global consumer research organization, more than a quarter of survey respondents said the type of protein is a significant factor in their purchase decision. Snack and performance bar buyers were interested in nuts as a protein source. Seeds, soy and pea protein scored high among nutritional bar buyers.
Redwood Market recently introduced a pressed-meat bar that is shaped and packaged like a health bar but made from grass-fed, organic beef. Manufactured by Organic Valley, it comes in two flavors—Bacon and Apple or Cranberry and Sunflower Seed. It was developed to be merchandised with other health and protein bars.
“For all intents and purposes it’s a jerky, but jerky tends to be a one-trick pony as far as demographics are concerned,” Adam said. “Jerky generally appeals to the 18- to 35-year-old male customer. But there are a lot of aspects about jerky that are appealing to a broader segment, and this bar seems to be doing really well.”
CLEAN AND LEAN
While flavor is critical, health bar customers still insist on quality ingredients—but not too many. That means a “clean label.”
“A lot more people are reading labels, and they don’t like to see too many ingredients,” Morton said. “Some bars have only three or four ingredients. They’re super clean. Others have 12 or 14. Gluten-free and non-GMO are important to customers, and calories are always important. It’s about finding the right items that still taste good and offer a healthy option.”
At Square One Markets, employees are currently resetting the health and energy bar section. “Initially, the bars were hard to merchandise,” said Dell’Alba. “They got worked in with granola and cereal bars and things like that. We took a look at how we were merchandising them and brought in a whole lot more fresh items. Already, we’ve seen a sales increase of about 8% in the re-set stores.”
Many convenience operators merchandise all snack bars together, whether they are health, energy bars, granola, fruit or “treat” bars. But in the next few weeks, Redwood Market will roll out a merchandising plan that identifies several better-for-you-items in every category, while continuing to offer a separate section devoted to healthy options.
“We’ll be merchandising a lot of items in two spaces [in the store],” Adam said. “We have stuff for everybody. You can come in, get a water and an energy bar. The hard part is communicating so that people know they don’t have to go to a health store to get coconut water.”
Dell’Alba believes it is important for store operators to know what each offering is made of and to ensure they don’t over-promise “healthy” through excess claims on signage.
“We have to pay attention to how we merchandise them,” Dell’Alba said. “Some of the bars are laden with calories and preservatives. People today are definitely more interested in food and how it’s prepared before it’s packaged. And I don’t want to make a false promise to a customer.”
At Maverik, promotions have helped encourage trial. “I do a lot of promos that are two-fers, and the take rate is pretty healthy,” said Morton. “With those promotions, you can eat one and throw another one in the car, take it back to work or whatever. You don’t have to consume both at the same time.”
Adam is convinced that the category will continue to grow. “I put a good amount of time into this category because I think it’s the wave of the future,” Morton said. “It’s convenient, it’s fast and it’s healthy.”
Hobson agreed, describing health bar sales as “a win-win situation.”
“Consumers are willing to pay more for better quality products that meet their nutritional needs, thus leading to sales growth for retailers,” Hobson said. “I expect these products will stay at the forefront of growth and will demand additional real estate in our stores.”