Review of the Russian Market of Snack BarsResearch by the Company “Euromonitor International”
GLOBAL SNACK BAR MARKET
In the whole world, the market of snack products is the most dynamic and developing in terms of new products, packaging solutions and ways of consumption. The segment of snack bars* is of particular interest; it is developing steadily thanks to growth in demand for products that are intended for consuming on the go and are healthy at the same time.
According to “Euromonitor International”, in 2016 retail sales of snack bars reached $13 million globally. Over half of sales are generated by granola bars**. In terms of average per capita consumption of this product, the most developed markets are Canada and New Zealand, where this index exceeds 1 kilogram per capita. It should be noted that global sales of granola bars during the period from 2012 to 2016 declined by 7% in monetary terms. The decline was due to saturation in a number of largest markets such as markets in the USA, Great Britain and Australia.
Depending on the region of the world, different players lead in the market of granola bars. In North America it would be such giants as “General Mills Inc” (“Nature Valley” trademark), “Kellogg Co” (“Kellogg’s” trademark) and “PepsiCo Inc” (“Quaker” trademark). Brands popular in Australia are “Nestlé SA” (“Uncle Tobys” trademark), “Carman’s Fine Foods Pty Ltd” (“Carman’s” trademark) and “Griffins Foods Ltd” (“Nice & Natural” trademark). In Western Europe the leaders include “Kellogg Co” (“Kellogg’s” trademark), “Hero Group GmbH” (“Corny” trademark), “Mondelez International Inc” (“Cadbury”, “LU” trademarks) and “General Mills Inc” (“Nature Valley” tardemark) whereas the leaders in Eastern Europe are “Cereal Partners Worldwide SA” / “Nestlé SA” (“Fitness” trademark) and “Hero Group GmbH” (“Corny” trademark).
The category of energy bars is second in sales volumes***, occupying less than a third of the market. The key positions in the category belong to the USA, where over two thirds of the world’s volume of the product are sold. The largest players in this market include “Clif Bar & Co” (“Clif Bar” trademark) and “Quest Nutrition LLC” (“Quest” trademark). Second place in volumes of energy bar sales belongs the Asia-Pacific region, where virtually all sales are concentrated in Japan. The leader of Japanese sales is “Otsuka Holdings Co Ltd” (“Calorie Mate”, “Soy Joy” trademarks).
The next category in terms of significance is fruit bars****. Huge interest in this product is observed by consumers. Attractive product composition and a natural source of vitamins and nutrients in a convenient bar format predetermined the success of this category. Since 2012, global sales in the market increased two-fold in both physical and monetary terms. The highest growth in sales in value terms since 2012 has been observed in Norway and Sweden. The largest player in these markets is “Eat Natural Ltd” (“Eat Natural” trademark).
In Russia overall consumption of snack bars remains at the initial level, but the prospects for market growth are very high. Today the Russian index of average per capita expenses per snack bar falls behind European markets – however, steady growth at a high rate is recorded.
RUSSIAN SNACK BAR MARKET
According to “Euromonitor International”, in 2016 retail sales of snack bars in Russia amounted to 4.7 billion rubles. The two factors defining the potential of market development are growing demand for food products in the snack format coming from city residents, and fashion for healthy eating and healthy snacks. The formats most popular today are granola bars and fruit-and-nut bars. To a lesser extent Russians choose energy bars and other types of bars*****, such as gozinaki, as snacks.
Retail sales of granola bars amount to 59% of the whole Russian market of snack bars in monetary terms. The main sales channel of granola bars are modern grocery retail chains. Granola bars can also be bought in traditional food stores, pharmacies and vending machines, as well as online. Representation of granola bars in store chains across the country increased significantly during the past few years, which attracted more new buyers in different regions. Starting with 2011, the volume of granola bar sales in volume terms increased two-fold.
Another strong impulse for market development was the launch of “Fitness” and “Nesquik” by “Nestlé” in 2014. They quickly gained leadership in the market due to the popularity of the brands and wide distribution in retail chains. In 2016 the company introduced the new “Cini Minis” snack bar brand to the Russian market (it also produces breakfast cereals under the same name). Apart from “Nestlé”, another largest player in the market of granola bars is “Hero Group” with its “Corny” trademark. These companies together occupied 73% of the granola bar market in monetary terms in 2016, and therefore the market can be characterized as highly concentrated.
Fruit bars are second in popularity in the Russian market. In 2016 they accounted for over a third of all snack bar sales in monetary terms in the country. The emergence of strong domestic players during the past 5 years widened the range of bars present in the market and increased their availability to the consumer. Prices for fruit-and-nut bars on store shelves differ insignificantly from prices for granola bars, which attracts consumers. An interesting factor stimulating bar consumption is their distribution through non-retail sales channels, for instance in restaurants and cafes, in-flight and on trains. This way, consumers get to know the product and are introduced to certain brands.
Unlike granola bars, in the market of fruit-and-nut bars the leading positions are occupied by domestic companies. The largest market players are the Moscow “BioFoodLab” LLC (“Bite” trademark) and “Prodinko” LLC (“Fit&Fruit” trademark), as well as “Beloe Derevo (White Tree)” LLC (Novosibirsk region, “Frutilad” trademark), “Dary Pamira (Gifts of Pamir)” (Moscow, “Shelkovitsa s Pamira (Mullberry from Pamir)” trademark), “Klinskie Sneki (Klinsky Snacks)” LLC (Vladimir region, “Pikki” trademark). Besides a considerable market share belongs to Czech “Usovsko Food AS” (“Fit” trademark).
Energy bars are a niche market in Russia. Said product is oriented to consumers who lead an active lifestyle, do sports and search for additional sources of energy. This market features companies that are specialised on sports nutrition and have protein and energy bars in their range. While protein bars are intended for consumers following a special sports diet, energy bars have a wider consumer audience and serve as snacks between meals, before or after workout. The leading brands in the market of energy bars in Russia include the same brands as in the market of sports protein bars, namely: “Weider Global Nutrition LLC” (“Weider” trademark), “Atlantic Grupa dd” (“Multipower” trademark), “Glanbia Plc” (“Optimum Nutrition” trademark), “Well Plus Trade Vertriebs GmbH & Co KG” (“Power System” trademark). Therefore consumers perceive energy bars as a variety of protein bars rather than a separate product type. In 2016 the ratio of retail sales of energy and protein bars in value terms was about 2 to 3.
PROSPECTS FOR FUTURE GROWTH OF THE RUSSIAN MARKET
According to forecasts by “Euromonitor International”, the market of snack bars will increase by 2.5 times in monetary terms by 2022. The main growth will fall on fruit bars.
The insufficient market saturation and growing consumer interest in various snack formats are the main conditions for future growth in snack bar sales. In addition, growth in the presence of snack bars in federal retail networks and wider use of non-retail distribution and promotion channels are expected, which will positively affect brand recognition and purchase frequency. Snack bars will continue to attract new consumers who desire to try something different from traditional popular snacks (cookies, chocolate bars). Given steady overall growth in private label sales in various product categories in Russia, one can expect development of snack bar private labels in major federal networks in the future. Future trends also include big potential for the launch of new snacks in the bar format intended for kids. Snacks for kids that one can take to school and that are, in addition, beneficial for health have a big potential for demand by Russian parents.
* Snack bars include granola bars, fruit bars, energy bars and other types of bars.
** Granola bars are made from cereals and may be marketed as breakfast food.
*** Energy bars are produced from cereals and other ingredients, enriched with nutrients and marketed as a source of energy; these exclude protein bars for sports nutrition.
**** Fruit bars are made from fruits, berries, nuts or a combination thereof and do not contain cereals.
***** Other types of bars are not included in the aforementioned groups, for example sesame bars or yoghurt-based bars. Chocolate bars are not addressed by the article.