Snack bar sales slip during quarantine but long-term growth unaffected

Dive Brief:

  • Nutritional bar sales plummeted in March and April, according to a Bernstein analysis reported on by Food Navigator. Following the onset of coronavirus, sales of performance nutrition bars dropped 20%, meal replacement bars fell 17.9%, weight management bars were down 11% and health and nutrition bars dipped 5.8%.
  • At the same time, the report found cereal and granola bar sales posted sharp growth in March following years of declines. Sales dropped again in April, Food Navigator​ noted.
  • Bernstein predicts this upset to be temporary and expects the nutritional bar category to return to overall growth on the strength of “mega dietary trends such as wholesome/natural and high protein/low carb.” The Wall Street firm said the Atkins and Quest brands are best positioned to benefit. 

Dive Insight:

For years, snacks have been big business. Snack bars — particularly protein and meal replacement ones — were at the top of the list in terms of dollar sales growth from 2013 to 2016, according to a study by Nielsen. However, with people quarantined at home, this once-hot category has at least temporarily cooled off. 

Nutritional and meal-replacement bars are positioned to cater to people needing on-the-go nutrients and a quick snack solution that is both healthy and convenient. With life at a standstill in many areas, the positioning of these bars may not be resonating as well with consumers. People spending more time at home for both work and pleasure have less of a need to turn to bars and the attributes they provide. 

Still, snacking has not disappeared as a meal alternative. In fact, since lockdowns began, Mondelez found 40% of people said they have been eating more snacks. The difference is consumers are seeking out trusted, familiar brands that provide indulgence. 

Perhaps that is why the previously neglected cereal and granola bar space is seeing a lift. General Mills’ Nature Valley granola bars experienced a 32.5% increase in sales in March, according to the Bernstein report. Kind and Quaker bars also saw similar growth. The Nature Valley and Quaker bars both provide consumers with a nostalgic comfort. During these uncertain times, having access to foods that were familiar in childhood allows consumers to recreate those feelings of pleasure and happiness, even while in quarantine. 

However, the Bernstein report predicted purchases of meal replacement and nutrition bars will begin to tick back up once quarantines are lifted. This is good news for CPG firms who have invested a lot in the nutritional bar space in recent years.

Last August, Simply Good Foods, the maker of bars and other products under the Atkins brand, purchased Quest Nutrition for $1 billion. Two months earlier, Mondelez International purchased a majority stake in Perfect Snacks, the manufacturer of organic, non-GMO, nut butter-based protein bars and bites.

In that same time period, Hershey completed the acquisition of One Brands protein bars for $397 million. Prior to that deal, Hershey’s VC arm, C7 Ventures, took a minority stake in Fulfil — a producer of high-protein, vitamin-fortified nutrition bars in the UK and Ireland. There also are smaller companies such as Huel that are banking on the U.S. market to launch new meal replacement bar products. 

The coronavirus has upended consumption habits in the near term, but analysts, including Bernstein​, are confident that once things start to mirror what was important to consumers before the pandemic, trends like natural, high protein and low carb will again move to the forefront and the growth these bars experiences before with resume. For companies that have invested aggressively in the space before the coronavirus, a return to growth will be a welcomed return on their spending. 

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