Abstract

• Simply toning down the sweetness in cereal bars could win over 3.6 m adults who shun the bars for being too sweet.
• Bigger is better. Larger cereal bars have the potential to attract over four million adults. This group doesn' t eat cereal bars as they prefer something more substantial.
• Sharper price credentials could win over up to 13m current users who do not see cereal bars as offering value for money.
• High fibre cereal bars could appeal to more than 12m over-55-year-olds, who are trying to include plenty of fibre in their diet. This is a particularly lucrative group, as just one in three over-55-year-olds currently eat cereal bars.
• Sampling can be key to shaking non-users from their apathy. Just 13% of non-users see the bars as satisfying, while only 14% say they are unsatisfying, appearing to signal lack of experience and contact with the bars, rather than negative ones.
• Cereal bars pitched as more exciting and filling could tap into a pool of 5.5m 15-24-year-olds who eat snacks between meals. Just 2.6m of them currently eat cereal bars, being the most likely age group to see the bars as boring and unsatisfying.

Table of Contents

Issues in the Market

• Key themes
• Definition
• Abbreviations
• mySupermarket-Insights.co.uk

Market in Brief

• Market slows in 2009, forecast to regain momentum
• Healthy eating waning, but demographics promising
• Most popular for snacking, cereal bars face stiff competition
• New entrants drive product launches
• Top two manufacturers hold half the market
• Classic snacks the most popular
• Snacking is top use for cereal bars
• Convenient, not tasty?
• ' Not for me' say two in five

Internal Market Environment

• Key points
• Natural appeal waning
  • Figure 1: Agreement that "I am prepared to pay more for foods that don' t contain artificial additives", 2005-09
• The snack society
  • Figure 2: Agreement that "I often eat between meals, I keep eating snacks", 2005-09
• On-the-go opportunity
• Fibre-hunters
  • Figure 3: Agreement that "I try to include plenty of fibre in my diet these days", by selected demographics, 2009
• A slimming nation
  • Figure 4: Agreement with selected lifestyle statements on diet, 2005-09
• The indulgence opportunity
  • Figure 5: Agreement that "I like to treat myself to foods that aren' t good for me", 2005-09
• Children' s advertising goes healthy
• And so do school lunches

Broader Market Environment

• Key points
• Consumer confidence and incomes
  • Figure 6: How respondents describe their financial situation, December 2009
  • Figure 7: Index of consumer expenditure, current prices, 2004-14
• More 25-34s is good news for cereal bars
  • Figure 8: Trends in the age structure of the UK population, 2009-14
• Growth of ABs puts health and natural credentials in spotlight
  • Figure 9: Adult population trends, by socio-economic group, 2004-14
• Producer costs rise in 2008
  • Figure 10: UK commodity price of wheat, January 2004-November 2009

Competitive Context

• Key points
• The snack market is hotly competed
  • Figure 11: Performance of competing markets, 2005-09
• Healthy snacks
  • Figure 12: Performance of competing ' healthy' markets, Index, 2005-09
• Indulgent snacks
  • Figure 13: Performance of competing ' indulgent' markets, Index, 2005-09
• Snacking on the go
  • Figure 14: Types of snacks eaten on the go most commonly, 2006 and 2008

Strengths and Weaknesses

• Strengths
• Weaknesses

Market Size and Forecast

• Key points
• 46% growth forecast over 2009-14
  • Figure 20: UK retail value sales of cereal bars, and index of growth, 2004-14
  • Figure 21: UK retail value sales of cereal bars, at current and constant prices, 2004-14
• Robust growth slows in 2009
• Market to regain steam
• Factors used in the forecast

Segment Performance

• Key points
• Everyday bars still lead
  • Figure 22: UK retail value sales of cereal bars, by type, 2009
• General bars large but lacklustre
• Healthy bars strong
• Children' s bars benefit from brand activity
• Fragmented premium end

Market Share

• Key points
• Apart from top two, a fragmented market
  • Figure 23: Manufacturers' shares in UK retail value sales of cereal bars, 2009
• Small bars with big backing leap ahead
• Healthy bars continue to see robust growth
• ' Just snack' bars lack steam
• Eat Natural robust despite top-end pitch
• Leading cereal bar brand' s sales and market shares
  • Figure 24: Brand shares in the cereal bar market, by value, 2007-09

Companies and Products

• Figure 25: Leading manufacturers and brands in the UK cereal bar market, 2009

Major players

• Eat Natural
• General Mills
• Jordans
• Kellogg' s
• Mars
• United Biscuits
• Weetabix

Brand Communication and Promotion

• Key points
• Adspend cut in 2008, regains in 2009
  • Figure 26: Main monitored media advertising spend on cereal bars, 2005-09
• Kellogg' s dominates ad spend
  • Figure 27: Main monitored media advertising spend on cereal bars, by holding company, 2007-09
• TV remains channel of choice
  • Figure 28: Main monitored media advertising spend on cereal bars, by media channel, 2007-09
• Three quarters of spend on three brands
  • Figure 29: Adspend by top ten brands in the cereal bars market, 2007-09
• Bars look to engage users
• Rambling and slimming
• Sampling supports new launches

Channels to Market

• Key points
• Grocery multiples dominate
  • Figure 30: UK retail distribution of cereal bars, by value, by type of outlet, 2005, 2007 and 2009
• 100+ lines at major grocers
  • Figure 31: Trends in online supermarket ranges of cereal bars, number of lines by retailer, December 2007-November 2009
• Promotional activity on the rise
  • Figure 32: Trends in online supermarket promotions on cereal bars, total number of lines on promotion, December 2007-November 2009
• Own-label accounts for a tenth of lines
  • Figure 33: Trends in online supermarket own-label ranges of cereal bars, number of own-label lines by grocer, December 2007-November 2009

The Consumer - Trends in and Frequency of Usage

• Key points
• Cereal bar usage low at two in five
  • Figure 34: Consumption of cereal bars in the last 12 months, 2004-08
  • Figure 35: Consumption of cereal bars, by frequency, 2004-08
  • Figure 36: Most valuable consumers for volume sales of cereal bars, 2009
• Two in three 11-14-year-olds eat snack bars weekly
  • Figure 37: Number of cereal bars eaten weekly, 2005-09
  • Figure 38: Most valuable consumers for volume sales of cereal bars, 2009

Consumer - Snack Preferences

• Key points
• Crisps and cakes are favourite snacks
  • Figure 39: Preferred snacks, December 2009
• Few differences in favourites by age group
  • Figure 40: Most popular snacks, by age group, December 2009
• 25-34-year-olds top users of healthy snacks
  • Figure 41: Types of snacks, by age group most likely to eat them, December 2009
• Who eats snack bars?
  • Figure 42: Demographic groups the most and least likely to eat cereal bars, December 2009
  • Figure 43: Demographic groups the most and least likely to eat granola bars, December 2009

Consumer - Occasions for Eating Cereal Bars

• Key points
• Snacking remains main use
  • Figure 44: Occasions for eating cereal bars, December 2009
• One in three choose bars for one occasion only
  • Figure 45: Number of occasions for eating cereal bars, December 2009

Appendix - Internal Market Environment

• Figure 51: Agreement with selected lifestyle statements on diet and health, 2005-09
• Figure 52: Agreement with selected lifestyle statements on diet and health, by demographics, 2009
• Figure 53: Agreement with selected lifestyle statements on diet and health, by demographics, 2009 (continued)

Appendix - Broader Market Environment

• Figure 54: Forecast adult population trends, by socio-economic group, 2004-14
• Figure 55: Trends in the age structure of the UK population, by gender, 2004-14

Appendix - Consumer - Trends in and Frequency of Usage

• Figure 56: Consumption of cereal bars in the last 12 months, 2004-08
• Figure 57: Consumption of cereal bars in the last 12 months, by demographics, 2009
• Figure 58: Number of cereal bars eaten weekly, who buys them and location where eaten most, 2005-09
• Figure 59: 11-14s who ever eat cereal bars, by demographics, 2009

Appendix - Consumer - Snack Preferences

• Figure 60: Preferred snacks, December 2009
• Figure 61: Preferred snacks, by demographics, December 2009
• Figure 62: Preferred snacks, by demographics (continued), December 2009
• Figure 63: Preferred snacks, by demographics (continued), December 2009

Appendix - Consumer - Occasions for Eating Cereal Bars

• Figure 64: Occasions for eating cereal bars, December 2009
• Figure 65: Occasions for eating cereal bars, by demographics, December 2009
• Figure 66: Repertoire of occasions for eating cereal bars, December 2009
• Figure 67: Repertoire of occasiong for eating cereal bars, by demographics, December 2009
• Figure 68: Occasions for eating cereal bars, by repertoire of occasions, December 2009