Segmentation: The Nutrition Bar Market
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Segmentation: The Nutrition Bar Market

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Consumer Behavior, March 2010

Consumer Behavior, March 2010

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  • 1. Segmentation: Energy Bars Amanda Booth March 18, 2010
  • 2. Booth 2 Segmentation: Energy BarsProduct category overview:What exactly is an energy bar? An energy bar is a high-carbohydrate snack marketed towards activeindividuals. The purpose of the bar is to meet the calorific needs of those participating in physical activity.In addition to carbs, energy bars usually contain protein, vitamins, and minerals, making them an overallhealthy choice. They are frequently made with all-natural ingredients. Energy bars are versatile in thatthey can be consumed before, during, and after exercise, or even just as a mid-day snack. There are somany different types on the market that are tailored to unique needs. According to Packaging, an onlinenews site, sales of cereal and energy bars has risen from less than $400 million in 1996 to over $2 billionin 2009. Furthermore, nutrition and health bars, including energy bars, saw the best growth in the marketlast year. (Wells)Current brands, product features, distribution channels, prices, and promotion: Brand Product Features Distribution Price Promotions Channels Balance Bar: Original Balance bars are based Supermarkets, -Promotes its balanced on the 40/30/30 drug stores, ratio of carbs, protein, principle, a nutritional convenience and dietary fats. philosophy created by stores, sporting $1.00 -Joined with Dr. Barry Sears. 40% goods retailers, TerraCycle to reduce of calories are from discount waste in landfills. carbohydrates, 30% of department stores, -Teamed with The calories are from and Whole Planet protein, and 30% of Foundation to make a calories are from difference in dietary fat. Balance developing countries bars provide 15 grams through micro-lending. of protein, 23 vitamins and minerals, and 100% daily value of vitamins C & E. Balance bars contain no artificial flavors or preservatives.
  • 3. Booth 3Clif Bar Clif Bar’s mission is to Supermarkets, -Partnered with 1% For deliver great tasting, drug stores, the Planet and nutritionally-dense convenience contribute 1% of sales energy bars. It has the stores, sporting $1.25 to environmental right combination of goods retailers, organizations. carbohydrates, protein, discount -Created the Clif Bar and fiber to deliver department stores, Marathon Pace Team to sustained energy to natural/specialty support runners during active people. Clif Bars food stores, and races around the are made of all-natural country. ingredients and are -TEAM CLIF BAR is a 70% organic. They community of over contain organic oats 2000 pro and amateur and soybeans. The bars athletes, sponsored by are also vegan. Every Clif Bar & Co. Includes bar is free from trans the Tour de France fats, hydrogenated oils, cycling team, Team and high fructose corn Garmin-Slipstream. syrup. Clif bars have 23 -Print ads in mens essential vitamins and general, athletic, and minerals and are high environmentally- in fiber. oriented magazines. Feature the father-son duo, “trusting” pictures and wording, and athletics. -The San Francisco Business Times chose Clif Bar & the “Best Green Practices (Small Business)” category of the 2009 Green Business Awards.
  • 4. Booth 4 Clif Kid: ZBaR The ZBaR was the first Supermarkets, -Promoted as an product designed to drug stores, organic snack for kids contain less than 35% convenience in motion. of its total weight in stores, sporting $.79 -Was named “The Best sugar in order to goods retailers, Snack Bar” by Kiwi comply with the sugar discount magazine in 2008 and intake stand for foods department stores, 2009. available in the natural/specialty California school food stores and system, which was set by State Senate Bill 12. The sugar in this bar is from natural sources only. It contains no high-fructose corn syrup, preservatives, hydrogenated oils, artificial colors or flavors. ZBaRs are low-fat, USDA organic, contain 12 vitamins and minerals, and are made of whole grains.EAS: Myoplex Strength EAS Myoplex Strength Grocery stores, -Promotes its post-Formula Nutrition Bars Formula bars were drug stores, mass exercise nutritional developed by sports stores, specialty benefits. nutrition scientists. health stores, and $1.69 -Select products are When taken within 30 NFL and NFLPA minutes after working certified and therefore out, the bars help used by many pro athletes refuel and athletes. rebuild lean muscle. -Print advertising in Myoplex Strength magazines like Self, Formula Nutrition bars Shape, Triathlete, and contain 23 vitamins and Bicycling. minerals and 25 grams -TV commercials of protein. They have feature pro athletes. no trans fat or high- -Slogan: “I’m not done fructose corn syrup. yet.” -Partnered with I Play Clean to encourage teens to be steroid-free. -Free samples online.
  • 5. Booth 5LÄRABAR LÄRABAR is blend of Grocery stores, -Interactive blog unsweetened fruits, natural/specialty featured on website. nuts, and spices. The stores, -Regularly featured in bar is made from 100% convenience $1.25 women’s magazines, whole food and stores, such as Self, Shape, US contains no more than athletic/outdoor Weekly, Glamour, and eight ingredients. Each stores, and Women’s Health. LÄRABAR flavor has -Partnered with Project at least half a serving of Education Sudan to fruit, sometimes even a build a school kitchen. whole serving. The - LÄRABAR has a fan LÄRABAR is gluten page on Facebook and free, dairy free, and soy a Twitter account. free. It is all-natural, vegan, and kosher. LÄRABAR contains vitamins, minerals, fiber, protein, good carbohydrates and healthy fats.Luna Bar Luna was created to Supermarkets, -Uses print ads that help women get more drug stores, portray Luna Bar as a of the nutrients they convenience $1.25 healthy, indulgent often lack in their meal stores, sporting escape, but stay clear of plans. Luna bars are goods retailers, female stereotypes. 100% natural and 70% discount -Created LUNAFEST organic, but the department stores, to promote women company is making the natural/specialty filmmakers. transition to a fully food stores, and -Has 26 LUNA Chix organic product. Each teams, which support bar has 23 vitamins and the Breast Cancer minerals, including Fund. 35% daily value of -Regularly mentioned calcium for bones and in women’s magazines. 100% daily value of vitamin C. Luna bars have no high fructose corn syrup and are wheat and dairy free.
  • 6. Booth 6 PowerBar PowerBar is the Supermarkets, - Launched a national original energy bar. drug stores, advertising campaign PowerBar helps convenience featuring Michael athletes fuel up before stores, sporting $1.00 Phelps. The tagline was any training session or goods retailers, “Power to Push.” competition. It’s discount -Sponsors athletic formula is proven to department stores, events such as the increase endurance and Boston Marathon. performance. Each bar -Launched an iPhone is low in fat and has 8- . app campaign with 10 grams of protein and in 41-55 grams of carbs. February, 2010. The About 75% of the campaign offers the energy in the PowerBar winter sports comes from carbs, community nutritional which offer longer information, athlete lasting energy. In profiles, videos, and addition, 15-17% of the free samples. calories in the bar come from protein that aids muscle growth and recovery.PowerBar: Pria Created with Supermarkets, - Caters to women’s PowerBar’s expertise, drug stores, need for a quick-energy Pria is a nutritious convenience snack. snack just for women. stores, sporting $1.00 -Launched with a $9 It is meant to energize goods retailers, million nation print, and keep women going discount outdoor, and sampling throughout the day. It is department stores, program. perfect for snacking or and - Created the “Sparkle on-the-go. Each bar has and Shine” online just 110 calories and 3 . sweepstakes as part of grams of fat. Pria its “Be Sparked” contains 23 vitamins campaign. It allowed and minerals, including women to enter to win as much calcium as a valuable gifts, glass of milk. In including fine jewelry. addition, the bar has 5 -Slogan: “Be Great.” grams of soy protein -Commercials focus on for muscle tone. The high calcium, soy ingredients are protein, antioxidants, minimally processed, low calories, and and have no artificial chocolate. colors, flavors or preservations.
  • 7. Booth 7 ZonePerfect: Classic ZonePerfect Nutrition Supermarkets, - Will donate $180,000 Nutrition Bars Bars have always drug stores, to VH1’s Save the focused on nutrition. convenience Music Foundation in By following the stores, discount $1.00 2010. 40/30/30 eating plan, department stores, -Launched the ZonePerfect delivers a and “live.create.” campaign bar that combines great in 2009. taste with balanced -Created a Facebook nutrition. The bar is all- fan page. natural and rich in - ZonePerfect antioxidants. It has 14 frequently sponsors grams of protein, 3 competitive events, grams of fiber, and 19 such as the San vitamins and minerals. Francisco Marathon. -Tours around the country at different festivals, such as the Chicago Blues Festival. Festival visitors can sample ZonePerfect bars, including new flavors.Speculate on existing targeted segments based on current market characteristics:The energy bar market has been segmented in a way that reaches all consumers. As the market hasexpanded within the last 20 years, energy bar products have been designed for and marketed towardsdifferent consumers, all of whom have unique and specific needs. I have broken down these targetedsegments into five distinct categories: High-Performance Athletes, Health-Conscience Individuals, ActiveWomen, Active Children, and On-the-Go Individuals. High-Performance Athletes: Serious, endurance athletes are those who participate in strenuous physical activity on a daily basis. This includes long-distance runners, cyclists, triathletes, hikers, weightlifters, and the like. These athletes aim to follow the 40/30/30 philosophy when choosing an energy bar. They want something that is easy to digest, won’t leave them sluggish, and will increase their performance. Balance, EAS, and PowerBar are the well-known brands that target these consumers the best. These companies develop their products using top sports nutritionists and even have professional athlete followers. EAS and PowerBar even use high-profile athletes, like Brady Quinn and Michael Phelps, respectively, in their advertisements. Health-Conscience Individuals: Society’s emphasize on nutrition and exercise has allowed the health-conscience market to expand enormously. Fitness enthusiasts are those who eat right and regularly work out not only to stay in shape, but to benefit their health. These types of people like to eat foods that are wholesome, organic, and all-natural. They may even be vegetarians or vegans. According to the Nutrition Business Journal, natural/organic food reached $29.7 billion in total in 2008. (“Natural Products Association”) This industry is enormous, and is growing to meet the
  • 8. Booth 8needs of these individuals. In addition, health-conscience people participate in activities such asrunning, going to the gym, yoga, and skiing. LÄRABAR, Clif Bar, and ZonePerfect are examplesof brands that use all-natural ingredients to appeal to this set of people. On the LÄRABARwebsite, the bar is described as “a delicious blend of unsweetened fruits, nuts and spices - energyin its purest form. Made from 100% whole food, each flavor contains no more than eightingredients. Pure and simple, just as nature intended.” In addition, Clif Bar’s slogan is “The WholeFood Energy Bar.”Active Children: Childhood obesity in America has more than tripled within the past thirty years.This has highlighted the importance of children getting regular exercise and eating healthy. Onemarket that has been booming is natural and organic foods targeted at children and babies. Sales inthis category have been estimated to be $1 billion in 2008 according to a report entitled OrganicKids Snacks and Baby Food, from industry analysts New Nutrition Business. (Scott-Thomas)Energy bar companies are now creating product lines for children. These products are perfect forchildren involved in athletics or just as a healthy snack. Clif Kid, a brand by Clif Bar, has takenthe lead and created the organic ZBaR, a whole grain snack with vitamins and minerals andwithout “all the junk.” The bars come in kid-approved flavours, such as Spooky S’mores,Chocolate Brownie, and Honey Graham. The packaging features a kid on a skateboard, furtherproving it is for kids in motion. Although other energy bar companies do not have linesspecifically for children, the FAQs sections on their websites state that their products are a safeaddition to a child’s diet. This is evident on the Luna Bar, PowerBar, and Clif Bar websites.Active Women: One of the biggest ways the energy bar industry has grown is by capitalizing onthe women’s market. Active women need energy just like men, but their nutritional needs differquite a bit. For example, women especially need to add calcium, folic acid, iron, and antioxidantsto their diets every day. Companies responded to this need by creating products just for women.These bars are smaller, have fewer calories, have different formulas, and frequently featurechocolate. Clif Bar was the first company to create a second line, Luna, targeted towards women.The Luna Bar packaging states, “Luna is the whole nutrition bar created for women, and inspiredby the women of Clif Bar. In 180 indulgently delicious calories, Luna meets many of the specificnutritional requirements of active women.” PowerBar also created a line especially for athleticwomen called Pria. The Pria bar is just 110 calories and contains as much calcium as a glass ofmilk. The website says, “Indulge your craving and get a nutritional kick.” LÄRABAR is also a bargeared more towards women. It was created by a woman hiker named Lara Merriken who wantedto make a “healthy product that tasted delicious.” LÄRABAR is frequently featured in women’smagazines as a healthy addition to a nutritious diet. Also, articles often quote celebrities sayingthey snack on LÄRABARs during the day. This brand has been found in magazines like Shape,Self, Real Simple, US Weekly, and Marie Claire.On-The-Go Individuals: Today people are busier than ever, and it is difficult to balance work,family, and activities. According to a survey conducted by Harris Interactive, nine out of ten U.S.adults eat meals or snacks on-the-go; six out of 10 adults do so on a daily basis. (Cannon) Energybar companies have recognized this dilemma and promote their products as convenient snacks forthose on-the-run. On Clif Bar’s website it states, “Whether you’re on a 150-mile bike ride ormaking your way through a long day, it’s the energy bar for everyone.” On the ZonePerfectwebsite, the bars are said to be “your delicious go-to snack for on-the-go inspiration.” Pria targetswomen on-the-go. The packaging for its Chocolate Peanut bar states it is “A crispy, chewychocolaty covered snack that keeps you going through your day.” In a commercial for Pria, abusinesswoman in her office says, “It’s my 3 o’clock appointment,” which implies that it is her
  • 9. Booth 9 mid-day snack when at work. A running website describes the benefits of energy bars: “Energy bars are ready-and-waiting to be consumed - No mess, no preparation, no refrigeration. In todays eat-and-run society, when meals are a rare occurrence in a busy schedule, an energy bar suits the need for hungry runners who seek a hassle-free, somewhat nutritious alternative to vending machine snacks or a missed meal. The bars have a long shelf life, so you can stock them in your desk drawer or cupboard for a steady supply.” (Clark)Review of demographic, psychographic and behavioral variables: Market Segmentation Description Base and Variables Demographic: Children: This market is up-and-coming. Children are encouraged to join Age sports and activities, which is increasing the need for energy snacks. Adults: The energy bar market is primarily targeting adults. Adults are the ones who are purchasing these bars for themselves or family members. Adults use energy bars as fuel for physical activity or as mid-day snacks. About 32.5% of American adults participate in regular leisure-time exercise. ("Summary Health Statistics for US Adults") In addition, adults are aware of the nutritional benefits of consuming energy bars. Demographic: Males: Energy bars were primarily designed for men because they Gender typically engage in more strenuous activity than women. Energy bars provide protein, which helps to build their muscles, as well as many carbohydrates for extra calories. Females: Women have recently become essential targets for energy bars. Women exercise and watch what they eat to stay healthy and in-shape, and energy bars fit perfectly into their diets. In addition, some energy bars can be seen as indulgent, which women like, yet they still have low calories and provide many vitamins and minerals. Demographic: Higher Income: Energy bars are priced at a premium so they generally Income appeal to those with a higher income. Energy bars are usually sold individually, so at over $1 each it can become very expensive for a person to buy multiple bars. Buying these bars for every workout requires a good amount of disposable income. Psychographic: Health, Wellness, and Nutrition: Energy bar are not only consumed for Values fuel, but also because of their nutritional benefits. These consumers are generally very conscience about the foods they eat. They value eating whole grains and natural and organic foods. Energy bar consumers are concerned about the ingredients, and they do not want a bar with preservatives. Psychographic: Sports and Fitness: Energy bar consumers exercise very frequently. Activities They usually participate in intense endurance sports, such as running, cycling, hiking, and swimming. These consumers like to do anything that involves them moving, being active, and improving their health. Behavioral: The main reason people consume energy bars is because of the many Benefits Sought benefits they provide during training. Consumers want a bar that will give
  • 10. Booth 10 them energy so that they don’t “bonk” during exercise. Also, they want a bar that will allow them to go longer, perform better, and feel stronger. Behavioral: Usage rate varies with each type of user. Serious endurance athletes Usage Rate generally consume more energy bars than the average person. They may even need more than one during their session if they are exercising for over an hour. Moderate athletes will only need one for when they exercise. In addition, so will people on-the-go who only eat energy bars as a mid-day snack. Behavioral: Energy bars are generally consumed at three different times: before Occasions exercise, during exercise, and after exercise. Each period will require a different type of bar to provide the correct fuel. Energy bars for pre- exercise are eaten at least a half hour before and offer initial energy to muscles. Bars for mid-exercise are great for refueling electrolytes so the user can exercise longer and avoid muscle cramping. Energy bars for post-exercise are for recovery, and have protein for muscle growth and repair.Two underdeveloped market segments:Lower-Income Athletes: Energy bars are relatively expensive snacks. To put it in perspective, the priceper pound of granola bars is around $4.75 while nutrition and energy bars are about $9.87 per pound.(Wright) Premium energy bars are therefore consumed more by consumers with higher incomes, whilelower income individuals must settle for other foods during workouts. Athletes with lower incomes stillwant and need the benefits that energy bars provide, but they just cannot afford them. According toMintel, a marketing research firm in Chicago, the top reason for discontinuing consumption of energybars is that they are too expensive (47%). (Winter) Companies need to start targeting those with lowerincomes not only because this group should be able to benefit from the nutritional aspect of energy bars,but also because it would allow for a great increase of profits.Teen Athletes: Energy bar companies have products that target adults or children, but none thatspecifically reach teens. This market is currently overlooked but has huge potential. One survey foundthat 56.3% of America students participate on one or more sports teams. (“CDC”) Teens need a healthysource of fuel for their practices and competitions. Since students are so busy and active these days, theyusually have poor nutrition. According to a report from the CDC, less than 10% of teens get therecommended amount of fruit and vegetables every day. This means that teens are missing many vitaminsand minerals in their diets. (Dr. Amen) Teens need an energy bar that provides calories for fuel, but alsovitamins and minerals for overall health.Implementation for the underdeveloped segments:Segment: Lower-Income Athletes Product: The actual products do not really need to be changed in order to appeal to lower-income individuals. However, companies may choose to use less expensive ingredients so that the prices of the energy bars can be brought down.
  • 11. Booth 11 Price: This is the most important aspect when targeting the lower-income segment. An energy bar company should strive to make sure that their product is cheaper than the competitors. Promotion: Lower-income athletes will be more likely to purchase energy bars if they have coupons. Companies should begin to use sales promotions. Coupons could be sent in newspapers, such as buy four bars and receive 50¢ off your purchase. Companies should also begin to widely sell their products in packaged boxes. This will allow people to buy multiple bars at a lower price. In addition, companies should advertise on public transportation like trains, subways, and buses. Distribution: In order to reach this segment, the energy bars must be sold in stores where lower- income consumers shop. This includes discount department stores, such as Wal-Mart, Target, and K-Mart.Segment: Teen Athletes Product: Energy bars targeted towards teen athletes need to be modified slightly. Firstly, teens have nutritional requirements that are different from adults. The bars should be made a bit smaller so that they have a proportionate amount of calories. The energy bars also need to include all of the vitamins and minerals that teens do not get enough of in their diets every day. Additionally, different flavors can be introduced to appeal to the younger generation. These energy bars can be sweet, yet still nutritional. Flavors could include Chocolate Chip Cookie Dough, Chocolate Fudge Brownie, Oatmeal Cookie, and Cinnamon Bun. Price: Price will not have to be changed, since parents are usually buying energy bars for their children. Promotion: Companies need to reach teens through media, such as TV, the Internet, and magazines. Commercials can be shown during popular teen shows, especially on channels like MTV and the CW. In addition, ads and accounts should be on social networking sites like Facebook and Twitter. Ads can also be placed in magazines such as Teen People and Seventeen. Ads should feature popular celebrities and high-profile athletes. Distribution: In order to reach student athletes, energy bars can be distributed in school vending machines. This would make it easy for athletes to grab a nutritious, filling snack before practice. Energy bars can also be sold in school stores and at high school competitions and meets.