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    Study: Snack Bar Sales Growth Will Slow

    Cereal bar growth driven by kids, Hispanics.

    After the recent sales explosion of cereal and granola bars in the United States, sales of these products are expected to slow over the next few years, according to a new report cited by Foodnavigator-usa.com.

    However, opportunities for growth still remain, particularly by targeting children and Hispanics, Mintel reported.

    Bar sales grew by 69 percent between 2001 and 2006, which equates to a 48-percent increase at constant prices, according to Mintel. However, the category’s growth slowed considerably in the last year: at constant 2006 prices, sales grew only 1 percent between 2005 and 2006. This was primarily a result of slowing sales in the breakfast/cereal/snack bar segment, Mintel said.

    This segment currently makes up 47 percent of the total market, and grew by almost 10 percent over the past two years. The remaining 53 percent of the market is made up of granola bars, which showed stronger growth due to the product’s greater flexibility. This segment grew 15 percent since 2004, according to the Foodnavigator-usa.com report.

    Main drivers behind the popularity of cereal bars are a desire for healthier food alternatives, as well as demographic factors, Mintel reported. Many cereal and granola bars make nutritional claims that synchronize with the desires of Americans to eat a healthier diet.

    Although the most commonly cited reasons for eating cereal bars were to replace meals or as a snack, consumers also said they purchased them for weight loss, as an energy boost, and to maintain metabolism or blood sugar.

    While a total of 65 percent of respondents to a Mintel survey said they consume cereal bars of some kind, most frequent consumers of the products are children, teens and 18-34 year-olds.

    And the expected 15 percent increase of the nation’s Hispanic population is also good news for marketers of cereal bars, as this population segment is more likely to eat bars than other consumers.

    “As Hispanics are a high-growth segment of the population, manufacturers should promote and develop product for this population. The Hispanic population is also younger and more likely than the population as a whole to have children. Younger and family households are also more likely to eat cereal bars,” said the report.

    The US cereal bar market is currently dominated by four major players: Quaker Oats, Kellogg, General Mills and Kraft. In 2006, these four companies accounted for 77 percent of sales, excluding Walmart. Quaker Oats’ Chewy Granola, General Mills’ Nature Valley, Kellogg’s Nutri Grain and Special K bars and Kraft’s South Beach bar were the top-selling brands in 2006, according to Mintel.

    “The top five brands achieved significantly higher sales growth than the category as a whole. These brands grew by 24 percent between 2004 and 2006, whereas total category growth was 12 percent. The packaged food companies exert marketing muscle behind new product introductions and brands and are better able to gain shelf space for their products,” according to the Mintel report.

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