Segmentation:Energy Bars

Amanda BoothMarch 18, 2010

Segmentation: Energy Bars

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Product category overview:

What exactly is an energy bar? An energy bar is a high-carbohydrate snack marketed towards active individuals. 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 overall healthy choice. They are frequently made with all-natural ingredients. Energy bars are versatile in that they can be consumed before, during, and after exercise, or even just as a mid-day snack. There are so many different types on the market that are tailored to unique needs. According to Packaging, an online news site, sales of cereal and energy bars has risen from less than $400 million in 1996 to over $2 billion in 2009. Furthermore, nutrition and health bars, including energy bars, saw the best growth in the market last year. (Wells)

Current brands, product features, distribution channels, prices, and promotion:

Brand Product Features Distribution Channels

Price Promotions

Balance Bar: Original Balance bars are based on the 40/30/30 principle, a nutritional philosophy created by Dr. Barry Sears. 40% of calories are from carbohydrates, 30% of calories are from protein, and 30% of calories are from dietary fat. Balance bars provide 15 grams of protein, 23 vitamins and minerals, and 100% daily value of vitamins C & E. Balance bars contain no artificial flavors or preservatives.

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, and balance.com.

$1.00

-Promotes its balanced ratio of carbs, protein, and dietary fats.-Joined with TerraCycle to reduce waste in landfills. -Teamed with The Whole Planet Foundation to make a difference in developing countries through micro-lending.

Clif Bar Clif Bar’s mission is to deliver great tasting, nutritionally-dense energy bars. It has the right combination ofcarbohydrates, protein, and fiber to deliver sustained energy to

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, natural/specialty

$1.25

-Partnered with 1% For the Planet and contribute 1% of sales to environmental organizations.-Created the Clif Bar Marathon Pace Team to support runners during races around the

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active people. Clif Bars are made of all-natural ingredients and are 70% organic. They contain organic oats and soybeans. The bars are also vegan. Every bar is free from trans fats, hydrogenated oils, and high fructose corn syrup. Clif bars have 23 essential vitamins and minerals and are high in fiber.

food stores, and clifbarstore.com.

country.-TEAM CLIF BAR is a community of over 2000 pro and amateur athletes, sponsored by Clif Bar & Co. Includes the Tour de France cycling team, Team Garmin-Slipstream.-Print ads in men's general, athletic, and environmentally-oriented magazines. Feature the father-son duo, “trusting” pictures and wording, and athletics. -The San Francisco Business Times chose Clif Bar & Co.as the “Best GreenPractices (Small Business)” category of the 2009 Green Business Awards.

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Clif Kid: ZBaR The ZBaR was the first product designed to contain less than 35% of its total weight in sugar in order to comply with the sugar intake stand for foods available in the California school 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.

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, natural/specialty food stores and clifbarstore.com.

$.79

-Promoted as an organic snack for kids in motion.-Was named “The Best Snack Bar” by Kiwi magazine in 2008 and 2009.

EAS: Myoplex Strength Formula Nutrition Bars

EAS Myoplex Strength Formula bars were developed by sports nutrition scientists. When taken within 30 minutes after working out, the bars help athletes refuel and rebuild lean muscle. Myoplex Strength Formula Nutrition bars contain 23 vitamins and minerals and 25 grams of protein. They have no trans fat or high-fructose corn syrup.

Grocery stores, drug stores, mass stores, specialty health stores, and abbottstore.com.

$1.69

-Promotes its post-exercise nutritional benefits.-Select products are NFL and NFLPA certified and therefore used by many pro athletes.-Print advertising in magazines like Self, Shape, Triathlete, and Bicycling.-TV commercials feature pro athletes. -Slogan: “I’m not done yet.” -Partnered with I Play Clean to encourage teens to be steroid-free.-Free samples online.

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LÄRABAR LÄRABAR is blend of unsweetened fruits, nuts, and spices. The bar is made from 100% whole food and contains no more than eight ingredients. Each LÄRABAR flavor has at least half a serving of fruit, sometimes even a whole serving. The LÄRABAR is gluten free, dairy free, and soy free. It is all-natural, vegan, and kosher. LÄRABAR contains vitamins, minerals, fiber, protein, good carbohydrates and healthy fats.

Grocery stores, natural/specialty stores, convenience stores, athletic/outdoor stores, and larabarstore.com.

$1.25

-Interactive blog featured on website.-Regularly featured in women’s magazines, such as Self, Shape, US Weekly, Glamour, and Women’s Health. -Partnered with Project Education Sudan to build a school kitchen.- LÄRABAR has a fan page on Facebook and a Twitter account.

Luna Bar Luna was created to help women get more of the nutrients they often lack in their meal plans. Luna bars are 100% natural and 70% organic, but the company is making the transition to a fully organic product. Each bar has 23 vitamins and minerals, including 35% daily value of calcium for bones and 100% daily value of vitamin C. Luna bars have no high fructose corn syrup and are wheat and dairy free.

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, natural/specialty food stores, and clifbarstore.com.

$1.25

-Uses print ads that portray Luna Bar as a healthy, indulgent escape, but stay clear of female stereotypes. -Created LUNAFEST to promote women filmmakers.-Has 26 LUNA Chix teams, which support the Breast Cancer Fund.-Regularly mentioned in women’s magazines.

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PowerBar PowerBar is the original energy bar. PowerBar helps athletes fuel up before any training session or competition. It’s formula is proven to increase endurance performance. Each bar is low in fat and has 8-10 grams of protein and 41-55 grams of carbs. About 75% of the energy in the PowerBar comes from carbs, which offer longer lasting energy. In addition, 15-17% of the calories in the bar come from protein that aids muscle growth and recovery.

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, and powerbarstore.com.

$1.00

- Launched a national advertising campaign featuring Michael Phelps. The tagline was “Power to Push.”-Sponsors athletic events such as the Boston Marathon.-Launched an iPhone app campaign with SkiReport.com in February, 2010. The campaign offers the winter sports community nutritional information, athlete profiles, videos, and free samples.

PowerBar: Pria Created with PowerBar’s expertise, Pria is a nutritious snack just for women. It is meant to energize and keep women going throughout the day. It is perfect for snacking or on-the-go. Each bar has just 110 calories and 3 grams of fat. Pria contains 23 vitamins and minerals, including as much calcium as a glass of milk. In addition, the bar has 5 grams of soy protein for muscle tone. The ingredients are minimally processed, and have no artificial colors, flavors or preservations.

Supermarkets, drug stores, convenience stores, sporting goods retailers, discount department stores, and powerbarstore.com.

$1.00

- Caters to women’s need for a quick-energy snack.-Launched with a $9 million nation print, outdoor, and sampling program.- Created the “Sparkle and Shine” online sweepstakes as part of its “Be Sparked” campaign. It allowed women to enter to win valuable gifts, including fine jewelry.-Slogan: “Be Great.”-Commercials focus on high calcium, soy protein, antioxidants, low calories, and chocolate.

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ZonePerfect: Classic Nutrition Bars

ZonePerfect Nutrition Bars have always focused on nutrition. By following the 40/30/30 eating plan, ZonePerfect delivers a bar that combines great taste with balanced nutrition. The bar is all-natural and rich in antioxidants. It has 14 grams of protein, 3 grams of fiber, and 19 vitamins and minerals.

Supermarkets, drug stores, convenience stores, discount department stores, and abbottstore.com.

$1.00

- Will donate $180,000 to VH1’s Save the Music Foundation in 2010.-Launched the “live.create.” campaign in 2009. -Created a Facebook fan page.- ZonePerfect frequently sponsors competitive events, such as the San 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 has expanded within the last 20 years, energy bar products have been designed for and marketed towards different consumers, all of whom have unique and specific needs. I have broken down these targeted segments into five distinct categories: High-Performance Athletes, Health-Conscience Individuals, Active Women, 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

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needs of these individuals. In addition, health-conscience people participate in activities such as running, going to the gym, yoga, and skiing. LÄRABAR, Clif Bar, and ZonePerfect are examples of brands that use all-natural ingredients to appeal to this set of people. On the LÄRABAR website, the bar is described as “a delicious blend of unsweetened fruits, nuts and spices - energy in its purest form. Made from 100% whole food, each flavor contains no more than eight ingredients. Pure and simple, just as nature intended.” In addition, Clif Bar’s slogan is “The Whole Food 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. One market that has been booming is natural and organic foods targeted at children and babies. Sales in this category have been estimated to be $1 billion in 2008 according to a report entitled Organic Kids 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 for children involved in athletics or just as a healthy snack. Clif Kid, a brand by Clif Bar, has taken the lead and created the organic ZBaR, a whole grain snack with vitamins and minerals and without “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, further proving it is for kids in motion. Although other energy bar companies do not have lines specifically for children, the FAQs sections on their websites state that their products are a safe addition 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 on the women’s market. Active women need energy just like men, but their nutritional needs differ quite a bit. For example, women especially need to add calcium, folic acid, iron, and antioxidants to 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 feature chocolate. 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 inspired by the women of Clif Bar. In 180 indulgently delicious calories, Luna meets many of the specific nutritional requirements of active women.” PowerBar also created a line especially for athletic women called Pria. The Pria bar is just 110 calories and contains as much calcium as a glass of milk. The website says, “Indulge your craving and get a nutritional kick.” LÄRABAR is also a bar geared more towards women. It was created by a woman hiker named Lara Merriken who wanted to make a “healthy product that tasted delicious.” LÄRABAR is frequently featured in women’s magazines as a healthy addition to a nutritious diet. Also, articles often quote celebrities saying they 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) Energy bar companies have recognized this dilemma and promote their products as convenient snacks for those on-the-run. On Clif Bar’s website it states, “Whether you’re on a 150-mile bike ride or making your way through a long day, it’s the energy bar for everyone.” On the ZonePerfect website, the bars are said to be “your delicious go-to snack for on-the-go inspiration.” Pria targets women on-the-go. The packaging for its Chocolate Peanut bar states it is “A crispy, chewy chocolaty covered snack that keeps you going through your day.” In a commercial for Pria, a businesswoman in her office says, “It’s my 3 o’clock appointment,” which implies that it is her

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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 today's 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 Base and Variables

Description

Demographic:Age

Children: This market is up-and-coming. Children are encouraged to join 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:Gender

Males: Energy bars were primarily designed for men because they 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:Income

Higher Income: Energy bars are priced at a premium so they generally 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:Values

Health, Wellness, and Nutrition: Energy bar are not only consumed for 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:Activities

Sports and Fitness: Energy bar consumers exercise very frequently. 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:Benefits Sought

The main reason people consume energy bars is because of the many benefits they provide during training. Consumers want a bar that will give

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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

Usage rate varies with each type of user. Serious endurance athletes 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: Occasions

Energy bars are generally consumed at three different times: before 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 price per 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, while lower income individuals must settle for other foods during workouts. Athletes with lower incomes still want and need the benefits that energy bars provide, but they just cannot afford them. According to Mintel, a marketing research firm in Chicago, the top reason for discontinuing consumption of energy bars is that they are too expensive (47%). (Winter) Companies need to start targeting those with lower incomes 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 that specifically reach teens. This market is currently overlooked but has huge potential. One survey found that 56.3% of America students participate on one or more sports teams. (“CDC”) Teens need a healthy source of fuel for their practices and competitions. Since students are so busy and active these days, they usually have poor nutrition. According to a report from the CDC, less than 10% of teens get the recommended amount of fruit and vegetables every day. This means that teens are missing many vitamins and minerals in their diets. (Dr. Amen) Teens need an energy bar that provides calories for fuel, but also vitamins 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.

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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.