Changing Snack Appetites Leave Granola Bars Behind
October 06 2019 - 7:29AM
Dow Jones News
By Annie Gasparro
As Americans grab for more snack bars, the biggest brands are
getting overlooked.
Sales are falling for General Mills Inc.'s Nature Valley bars
and Kellogg Co.'s Special-K bars, while snack-bar sales are rising
overall. The divergence is the latest example of longstanding
packaged-food makers missing a wave of sales growth for products
much like their own.
Danone SA started losing market share to Chobani a decade ago
when Greek yogurt gained popularity. Kraft Heinz Co.'s Boca veggie
burgers haven't benefited from the sales boom for patties from
Beyond Meat Inc. and Impossible Foods Inc.
Now a trend toward snack bars that are higher in protein and low
in sugar is leaving older brands behind.
Caitlin Long, who works at a tech company in Chicago, said she
is buying more Kind bars because their high fruit-and-nut content
seems healthier than the milled oats and sugar in Nature Valley and
Kellogg's Nutri-Grain bars.
"Kind bars pretty much kept me alive since my baby was born"
four months ago, she said.
Americans are eating more snack bars -- and more snacks in
general. Snack-bar sales in the U.S. rose 3.2% last year, according
to research firm Mintel, outpacing overall packaged-food sales.
Sales for older cereal-and-granola bar brands, though, fell 3.7%
in the year through August, according to Nielsen. As a result,
older brands, including Nature Valley, Special-K and Nutri-Grain,
that command the majority of snack-bar sales have lost market
share.
General Mills said last month that U.S. retail sales of snack
bars dropped 4% in its latest quarter. Chief Executive Jeff
Harmening said in an interview that the Minneapolis company is
investing in improvements like a crispy-wafer Nature Valley bar and
a Fiber One bar with more protein and less sugar.
"We are on the right track," he said.
Kellogg's CEO Steve Cahillane has said the company's Special K
bars are associated with low-fat diets that have fallen out of
fashion in favor of high-protein and low-carbohydrate eating
habits.
"We have to do a better job at innovating and making our foods
relevant for today's food beliefs," Mr. Cahillane said about
Special K bars at a conference last month.
Big companies have also acquired and invested in faster-growing
brands. Hershey Co. last month purchased One, a maker of low-sugar,
high-protein bars, for $397 million. Mondelez International Inc.
earlier this year purchased a majority stake in the owner of
Perfect Bar, a refrigerated, protein-rich product.
Kellogg in 2017 bought Rxbar, a protein bar made with egg whites
and dates. Kellogg has put Rxbars in more stores, helping sales
jump about 18% this year, the company said.
"Now it has all kinds of copycats," said Victor Lee, Rxbar's
chief marketing officer. Epic, a smaller brand owned by General
Mills, last year introduced date-and-egg-white bars that have a
similar look and taste as Rxbar.
M&M's maker Mars Inc. in 2017 took a stake in the company
that makes Kind bars that was estimated at more than $1 billion.
The brand was one of the more successful ones to appear in recent
years, but founder Daniel Lubetzky said that the introduction of
similar products from other companies recently has taken a toll on
Kind's sales.
"There's not room for 400 whole-nut bars," Mr. Lubetzky
said.
Write to Annie Gasparro at annie.gasparro@wsj.com
(END) Dow Jones Newswires
October 06, 2019 07:14 ET (11:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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