Why snack bars are in great shape: category report 2023

Snacking is on a serious health kick in grocery. The October imposition of strict government rules has banished HFSS goods from impulse aisles and other prime positions in supermarkets. It’s hard to see the full impact at tills at this early stage. But what’s already clear is snack bar makers are now in great shape to capitalise and grow sales.

“Cereal bars have an opportunity to leverage their health claims to become the go-to choice for shoppers,” believes Kantar category analyst Tom Quick.

As they stand, take-home value sales of cereal bars are up 3.9% to £355m – nearly three times the value growth for overall grocery [Kantar 52 w/e 22 January 2023].

This is a furtherance of performance ahead of the HFSS rules. For percentage unit growth, the leading cereal bars brands were outpacing chocolate, candy and biscuits in the year to 10 September 2022 [NIQ]. Seven of the 10 fastest growers across those categories were cereal bars brands, including Skinny, Fuel10k and Battle Bites.

“The snacking category has undergone significant change over the past year, with HFSS legislation impacting £17bn or 16% of all retail sales,” says Graze CEO Joanna Allen, citing Kantar [52 w/e 7 August 2022]. “The legislation is starting to create positive change, with growing sales of HFSS-compliant products.”

Granted, such growth is from a relatively small base. But the advances in snack bars with a fraction of the sugar and fat of traditional confectionery can’t be ignored.

So, how have the HFSS rules affected the merchandising of snack bars in supermarkets? Which brands have chosen to reformulate or launch non-HFSS products? And what other health claims are enticing shoppers?

The shift towards health in snack bars has been a long time coming.

As early as December 2014, Jamie Combs, co-founder of raw snack bar brand Nakd, said: “The age of confectionery is starting to end. All the shelf space confectionery has… at some point in the future there will be a wholefood alternative sitting next to it.”

To be clear, Britain’s bestselling grocery brand is still Cadbury, and chocolate is worth nearly £4.2bn to the supermarkets [NIQ].

Nevertheless, all major mults have leaned in to non-HFSS snack bars, ranging them in prime impulse spots.

Asda, for example, has products including Snickers Triple Treat and Kind bars at self-service checkouts in larger stores, while Nakd is stocked at tills and queue points in Sainsbury’s Local outlets.

Tesco, meanwhile, has been trialling Graze-branded gondola ends. “This was a huge success; 78% of shoppers picked Graze up for the first time in over 12 months, which tells us that if shoppers can visibly see and find healthy alternatives, they will choose them,” says Allen.

For her, the HFSS rules are “a genuine opportunity to grow the snacking category and improve the health of shoppers”.

In-store presence

The key to promoting the category is “creating deliciously exciting displays of non-HFSS products that will interrupt shopper journeys”, Allen argues.

“Snack bars are an impulse category, which means additional displays beyond shelf space are crucial to the growth of healthy snacking. For retailers, there’s a huge opportunity for non-HFSS products off-shelf.”

Alongside Graze, the likes of Nakd and Kind have also been growing their front-of-store presence in the years since Combs’ comments.

“Retailers are making sure that the ranges they have front of store are HFSS-compliant”

“Retailers are focused on making sure that the ranges they have front of store are HFSS-compliant,” says Jo Agnew, marketing director at Natural Balance Foods, which owns the Nakd and Trek brands.

Ahead of the rules, Nakd was “already fantastically distributed”, she adds. And because its bars are made of raw fruit and nuts, it’s always been classified as non-HFSS, “so we haven’t seen much change for the brand in terms of distribution”.

Throughout other areas of stores, non-HFSS lines have also become more common. Agnew is seeing “a growing number of HFSS-compliant SKUs are going into the likes of Sainsbury’s and Tesco as they step away from confectionery”, she says.

Among those with growing distribution in mainstream retailers are brands that began life targeting fitness buffs in gyms and CrossFit spaces.

For example, Swedish protein brand Barebells launched its first non-HFSS snack bar in January. It’s also now available in WH Smith and Co-op.

“Barebells has undergone a shift in channel mix, with 60% of sales in grocery & convenience”

“Barebells has undergone a notable shift in channel mix, with over 60% of sales now coming from grocery and convenience,” says Maria Ledesma, trade marketing manager at brand owner Vitamin Well, citing NIQ [52 w/e 11 February 2023].

Pivoting to Vitamin Well internal data, she adds: “The sports and fitness channel has grown by 14%, while Barebells protein bars have grown a whopping 99% overall.”

Kind innovation

Not everyone has been quite so enthusiastic about the opportunities of HFSS, mind you.

Ahead of the regulations coming into force, Kind was among those hoping for them to be more lenient; its core range contains between 52% and 76% nuts, making it relatively high in fat and therefore classified as HFSS.

So, in May 2021, the Mars brand revealed it was lobbying to have products containing more than 50% nuts made HFSS-exempt.

Kind’s lobbying was unsuccessful, but the brand has stuck to its recipes. “None of our bars have been reformulated to make them HFSS-compliant,” says marketing head Audrey Arbeeny.

Instead, it has produced dedicated non-HFSS lines: Maple Pecan Almond and Fruit & Nut launched in June 2022, while Caramelised Biscuit Nut made its debut last month.

“Launching our HFSS-compliant bars into the market has been a major milestone,” says Arbeeny, adding that Maple Pecan Almond has become the UK’s bestselling non-HFSS bar in NIQ’s latest 12-week period, with Fruit & Nut placed second.

Alongside the new launches, Kind has also added Thins – slimmer, less calorific versions of its bestselling Dark Chocolate Nuts & Sea Salt and Caramel Nuts & Sea Salt variants.

“Kind Thins combines great-tasting and nutritious ingredients in a thin and chewy bar, which both come in at under 100 calories per serving,” adds Arbeeny.

Similar efforts have been seen across other Mars brands. Last May, the supplier launched fruit and nut-based, non-HFSS versions of its Mars, Bounty, Galaxy and Snickers chocolate bars – forming the reduced sugar and satfat range Triple Treat.

Similarly, Mondelez launched non-HFSS Fruit Crunch and Soft Bake lines for Belvita in July, while three more non-HFSS Belvita options were added this month.

“Vitamins are one of the fastest growing macro categories, among the top three health needs”

Even non-HFSS brands have had to adapt to the changing market. Nakd, for instance, is upping the size of its key impulse lines from 35g to 45g (the rsp will remain £1.35) to compete with an influx of non-HFSS products front of store. It’s also set to launch three high-protein lines in April.

While suppliers have committed to new product launches with some enthusiasm, there is still some wariness in the market around reformulation of established lines.

“Taste is a non-negotiable factor when making our snacking choices, and it’s important brands do not compromise on quality while delivering healthier products,” says Steve Rich, MD of Fulfil, which next month will roll out a range of non-HFSS snack bars.

Functional claims

While Fulfil’s first priority is taste, it also favours an array of health credentials, going well beyond the reductions to sugar and fat encouraged by the HFSS rules. The addition of vitamins is key selling point for the brand.

“Vitamins are one of the fastest-growing macro categories and rank in the top three consumer health needs,” Rich says. “Uniquely, Fulfil Bars contain nine of the essential daily vitamins, contributing 30% of the RDA for each.”

Pairing indulgent taste with added benefits is also seen in leading protein bar maker Grenade.

In January, the Mondelez brand launched a co-branded Oreo protein bar – the latest in a series of launches including three protein flapjacks in Caramel Overload, Chocolate Chunk and Oatally Blueberry variants.

“It’s important to never stand still and we are constantly looking at ways to improve our products,” says Grenade MD Phil Greenhalgh.

For the brand and its protein bar rivals, functional health claims are key to justifying higher price points compared to other types of snack bar.

Like many others, Grenade calls out its high protein content on pack alongside its low sugar content – while similar brands also use the satiating and muscle-building properties of protein as key selling points.

This makes a lot of sense, given protein has drawn greater focus from shoppers since the onset of Covid-19. Many other aspects of health have also stepped into the spotlight as a result of the virus.

“The pandemic has increased the focus on wellbeing with consumers taking more responsibility for their health,” says Rich.

“This is reflected in consumer trends, with 85% of shoppers actively trying to improve their diet in some way and 80% of consumers seeking functional benefits from their snacks,” he adds with reference to findings by IGD and The Foresight Factory.

Gut instincts

With improved diet at the front of shoppers’ minds, some suppliers tip gut health-boosting snack bars as a key trend.

Take healthier snacking brand Perkier, which in 2021 launched what it claimed were the UK’s first probiotic snack bar.

It contains lives strains of Bifidobacteria Longum and Lactobacillus Rhamnosus – which are proven to support immune health – and come in Blueberry with Dark Chocolate and Madagascan Vanilla with Dark Chocolate Active Cultures.

More recently, February saw snacking giant Pladis go with its gut with the launch of Wholistic – a cold-pressed, nut butter-filled snack bar in Dark Chocolate & Sea Salt and Almond & Raspberry variants.

The supplier claims Dark Chocolate & Sea Salt provides digestive support by virtue of its chicory root fibre-content, with Almond & Raspberry boasting immunity support due to containing vitamin, zinc and iron.

“On top of Wholistic’s unbeatable flavour and texture profiles, we’ve incorporated an array of popular plant-based ingredients which will help consumers diversify their diets and contribute to their overall wellbeing,” says Pladis health & wellness director Asli Akman, citing Boston Consulting Group research from 2022.

She believes Wholistic’s positioning in immunity and digestion will build on the success of the £2.2bn ‘eat for wellness’ occasion – which “frequently puts product benefits front and centre on pack, plus over-indexes among younger adults”.

The focus on reducing HFSS values and adding further benefits shows where the category is likely to grow.

Meanwhile, the increase in call-outs has led to a decline in sales of low-calorie offers, some argue. “The diet management segment has really struggled and, as the biggest part of that space, so has Fibre One 90 Calorie,” says JP Carmen, head of snacks at Fibre One owner General Mills.

As such, the supplier is looking to innovation to reinvigorate the low-cal bar market through innovation.

“Last year, we launched Fibre One Doughnuts, and we are following it up this year with the launch of a Banoffee variant,” Carmen adds.

Value options

Another factor in the declining share of brands such as Fibre One is what Carmen calls “a huge influx of lower priced alternatives into the market, with the likes of Skinny Bars and own label doing well. This has driven the overall size of the prize down”.

Indeed, Kantar’s Quick notes that Skinny, which has been buoyed by the 2021 launch of its Crunch Light Salted Caramel bar, and Aldi granola bars are among the fastest growers of the past year in percentage terms.

But it’s important to note that their performance comes in what is a very small own label snack bar market. Brands make up the lion’s share of the category – their value share falling only 0.3 percentage points to 84% last year.

And it’s still debatable whether own label and cheaper challengers in snack bars will flourish even during this time of rampant food inflation.

For one, Kantar notes the average price of own label is £1.05 per pack, not much less than the £1.30 per pack seen in branded snack bars. Own label prices are rising faster, too – up 8.2% compared with 2.4% in branded.

And people’s trust in established brands – writ large during the height of coronavirus in 2020 – make them most likely to benefit amid the cost of living crisis, as demand for affordable comforts rises.

“During times of economic hardship, shoppers tend to gravitate towards small indulgences, such as ‘treating’ type biscuits,” notes Quick.

Snack bars may therefore be unusually well placed to benefit from the combination of HFSS restrictions incentivising health cues and the cost of living crisis. Its health kick may have been imposed by lawmakers, but the category looks fighting fit.