Sector Insight: Cereal, energy and snack bars

Kellogg's Rice Krispies Squares campaign for totally chocolatey squares
Kellogg's Rice Krispies Squares campaign for totally chocolatey squares

The growth of cereal bars as a breakfast substitute makes this a vibrant market.

Five Key Trends

Breakfast. Manufacturers have successfully expanded into breakfast-eating occasions – Kraft’s Belvita launch has gone specifically for this market. More than a quarter (28%) of users eat bars to replace a missed meal.

NPD. With companies like Kellogg’s and Kraft supporting NPD investment and activity it ensures new brands enter the market to maintain shoppers’ interest.

Demographics. Growth among 5-9 year-olds and 25 – 34 year-olds is positive for the market.  But the rise of the over-55s is more of a threat as older consumers are yet to be won round by the category.

Health. In general these bars are viewed as a healthy; 63% of buyers consider them a healthy alternative to other snacks.

Scepticism. Two thirds of buyers think the bars have shrunk in size and a quarter don’t think they offer value for money while non-users are suspicious of health claims (24% think they are too sweet).

Source: Mintel

Leading brand's shares in the cereal, energy and snack bar market by value (£m)

Occassions for eating cereal, snack and energy bars

The Industrys Main Players

Sarah Heynen, brand director, UB

Heynen joined UB in 2003 as brand director for McVities. In 2006 she became marketing director across sweet biscuits and is now responsible for brands such as McVitie's as well as the cereal bar brands. Prior to joining UB, Heynen held marketing roles at Glaxo SmithKline, Coca Cola & Schweppes and HP Bulmer.

 Ed Culf, marketing director, General Mills UK and Ireland

Culf joined General Mills in 1996 as brand manager for Häagen-Dazs ice cream. He worked across other brands before being promoted to general manager for the New Zealand business in 2002. Culf returned to the UK in 2007 becoming UK marketing director the following year.

Praveen Vijh, co-founder, Eat Natural 

Vijh was involved in various businesses including a nuts and fruit importing company before setting up Eat Natural with his friend Preet Grewal in 1997, spurred by the lack of healthy bars available in the UK at the time. He oversees the company’s marketing activities for what has now become a £45m brand distributed in 25 countries.

Clare Furlonger, marketing manager, Kellogg's Nutri-Grain 

Furlonger has been with Kellogg's since 2003 and has held a number of roles with the food company including brand innovation manager on adult cereals and senior brand manager for Special K snacks.

Giuseppe Banchini, Marketing Manager Biscuits, Kraft Foods

Banchini joined Kraft Foods UK in May 2011 to head the biscuits marketing team, after three years in Poland as marketing director Biscuits and Countlines. He has worked for Unilever, Danone and CPC Bestfoods both at local and international level previously.>

Rice Krispies Squares. Kellogg’s is the leading manufacturer in this market and this is its most successful brand by sales (£40m in 2011)

Belvita. Launched by Kraft in 2010, positioned specifically as a breakfast bar, Belvita – now in eight varieties – saw sales reach £24m in 2011 with considerable marketing support.

Nature Valley. Strong year-on-year growth and its profile will be further boosted by being official cereal bar supplier for London 2012 Olympic Games.

Eat Natural. Dominating the nut/seed bar segment sales have been increasing for several years. Benefits from its natural positioning compared with some other cereal bars.

Special K. Although it remains the most widely eaten cereal bar sales fell in 2011 by about £8m. New varieties have been added to boost consumer interest.

Go-Ahead! UB is the second largest manufacturer and while Go Ahead! remains its leading brand sales and share fell slightly in 2011.

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