Nutritious Portable Foods (NPF), such as granola and energy bars, are helping to pump up Canada’s $659 million hand-held good-for-you snack market. Last year the granola snack sector of the category drove sales in excess of $413 million showing a 6% gain in dollar volumes on sales of 135 million units (AC Nielsen).
According to market researcher Euromonitor, the snack bars category is becoming more active as more niche brands enter the market. Product development is focused on higher protein content as well as healthier ingredients. Here in Canada three global manufacturers – General Mills Canada Corp., Kellogg Canada Inc. and Pepsi-QTG Canada Inc., lead the market. General Mills ranks first thanks to brands such a Nature Valley, Betty Crocker and Fiber One.
“In the past most people would not associate a convenience store with anything healthy,” says Cam Smith of Saskatoon’s Dee’s Convenience. “Now that people are trying to eat healthier it’s important that our business offer more selection of products. We currently have been selling items like KIND and Clif protein bars. We also carry some healthier chips and veggie sticks. I think as the demand increases the manufactures will offer more selection to the retailers and this will help drive sales even further,” he says.
Indeed demand has been growing with volume sales of granola bars up by 5%. Back in the early days of category development, shelves were populated by cereal grain granola bars; a sector created by General Mills’ Nature Valley in the mid 90s. As consumers became more health conscious they began looking for products that offered more goodness. This opened the way for new products with less sugars, more fibre, and more nutrition, and as a result, niche market areas were established.
KIND was one of these new companies. They looked to changing consumer demands to drive their business. The company grew its share by just getting its product into people’s hands. In 2008 the sampling budget for KIND bars was just $800. In 2014 the company was spending $10 million on free trials with a promo team that spanned 27 across the US and Canada. The result has been that KIND has become a leader in NPFs with other brands working to catch some of the category glow that is pushing KIND forward. In 2004 the company offered eight bars. By 2014 the range had grown to 22 bars and six healthy grain snacks and their products captured close to 6% of the US market, a doubling of share since 2013. Canadian introduction was 2013 with 12 bars. Currently, KIND has grown in Canada with new product introduction such as four Healthy Grain Clusters SKUs, four Healthy Grain Bars SKUs and an expansion of the Fruit & Nut line to 17 bars.
To address the surge in KIND’s market share, majors such as Hershey and Mars rolled out new products to compete on healthy ingredients, lower sugars and packaging. Mars came forward with Goodness Knows snack squares in 2010. They launched exclusively into the Boulder, CO market to capture the city’s health and wellness halo before rolling out nationally in the US (2015) with four-square packages in three flavour assortments serving 150 calories, two-to-three grams of fibre, three grams of protein, 200 mg of cocoa flavanols and 20-35 mg of sodium. Mars reports Goodness Knows is not currently available in Canada and the company is tight lipped regarding launch here any time soon.
At Hershey they too have rolled out a competitor to KIND with a three bar assortment from its premium Brookside brand. Available widely in Canada, the Brookside selections offer combinations of real fruit, whole nuts and dark chocolate. The Brookside bar also features clear wrap to display the bar’s attributes to customers. Evidently, the clear wrap was a challenge for manufacturers that sought to reduce product spoilage due to sunlight. Consumers like the clear wrap however and the fact that bars show big chucks of nuts and fruit is real grabber for c-store customers who, according to a TNS 2014 Online Panel, also look for a range of other attributes such as Non GMO, no artificial flavours, Gluten Free, zero fat and low cholesterol, as well as low sodium and high fibre. Indeed, these attributes are helping impel the health snacks forward with the fruit and nut part of the better-for-you snack segment leading the sector with gains of +58 % (Nielsen, National All Channel 52 week June ‘14 to June ‘15)
At the new Tuck Shop in Toronto’s Dupont Hub area, c-store operator Robb Eng reports granola and health bars sell very well. The tiny store (400 sq ft.) is located adjacent to a busy transport hub where GO and TTC passengers, as well as highway-seeking car traffic, give the site a lot of buzz. At the Tuck Shop customers can find five or six SKUs of healthy bars that include Clif, KIND, Nature Valley, Made Good and Lara.
“The main purpose of having the bars is to add sales,” says Eng. “We have a strong foodservice program and while customers are waiting the ten minutes it takes us to make a great burger, they shop the store picking up snacks and beverages. Certainly the add on sales is one reason we place them close to the cash. They are so inviting and because they have this good-for-you message customers are far more likely to pick up a Lara or a KIND bar to put in their desk for later.”
According to NPD Group, 50% of hot beverage purchases in c-stores are teamed with a donut or muffin. “Why not make that add-on purchase a healthy snack that you can feel good about later,” suggests Eng, concluding that for himself and his partners its all about convenience and creating good choices in your community. Granola and healthy bar snacks are part of that equation.
*Place healthy snack bars close to the POS to maximize impulse purchasing
*Use granola bars to drive extra sales alongside coffee
*Combos such as bottled water and a fruit & nut bar are a great way to increase basket totals.
*Position granola bars around other healthy foods. This grouping creates more category awareness in-store and tells customers you are serious about good-for-you items. When they are looking for a healthy snack they will know where to go.
*Use healthy messaging in in-store placarding to offer advice on food choices and lifestyle. Increase the visibility of healthy portable snacks alongside the messages.
*Know your products. Are these bars gluten free? Are they low sodium? Be prepared to suggest a product when you see an opportunity to add on a purchase.