Question

Case Challenge #1 (Please do not attempt to solve if you can not answer all) A...

Case Challenge #1 (Please do not attempt to solve if you can not answer all)

A New, Dynamic Industry

THE ENERGY BAR INDUSTRY

In 1986, PowerBar, a firm in Berkeley, California, single-handedly created the energy bar category. Positioned as an athletic energy food, it was distributed at bike shops and events that usually involved running or biking. The target segment was the athlete who needed an efficient, effective energy source.

Six years later, seeking to provide an alternative to the sticky, dry nature of the PowerBar, a competitor, also located in Berkeley, developed an energy bar with superior taste and texture and branded it the Clif bar. About the same time, another competitor introduced the Balance bar, which offered a blend of protein, fat, and carbohydrates based on the nutrition formula associated with the “Zone diet.” Faced with these challenges, PowerBar responded with Harvest (a bar with a much more accessible taste and texture) and ProteinPlus (an entry into the high-protein subcategory closely related to that defined by Balance).

The makers of the Clif bar observed that many women were athletes and many more were involved in fitness. They further observed that this half of the population had unique needs in terms of vitamins and supplements and that the energy bar industry had yet to recognize or fill them—a classic case of unmet needs. As a result, they introduced Luna as the first nutritional (not energy) bar for women, using media and promotions targeting active females. The bar had a light, crunchy texture; came in flavors like “lemon zest” and chai tea; and contained nearly two dozen vitamins, minerals, and nutrients. The target market consisted of time-strapped women who wanted both taste and nutrition and would appreciate a bar tailored to their needs.

Both in reaction to Luna’s success and to expand the segments for which the category was relevant, PowerBar studied why women did not buy its products, which the firm considered to be nutritious, convenient, tasty, and able to provide a quick pick-me-up in mid-morning or mid-afternoon. One answer was that the calorie hit from any member of the PowerBar family was simply too great. In response, the firm created the almost indulgent PowerBar-endorsed Pria. With only 110 calories, Pria was designed to respond to Luna while attracting new users into the category.

The Balance strategy was to introduce a series of products, all of which stuck to the original bar’s 40/30/30 nutritional formula but had different taste and textures. These spinoffs included Balance Plus, Balance Outdoor (with no chocolate coating to melt), Balance Gold, Balance Satisfaction, and the Balance-endorsed Oasis, a bar designed for women. The big success was Balance Gold, which was positioned close to the candy bar category (indeed, its tagline was “like a candy bar”) by containing ingredients such as nuts and caramel. Such a bar probably risked some of Balance’s perceived authenticity as being an energy bar. However, because Balance entered the category from the diet perspective anyway and probably was never considered in the center of the energy bar world, the risk may have been acceptable.

In addition to the major brands, challengers from a variety of small and large firms advanced subcategories by positioning themselves around such factors as age (bars for seniors and kids) and health (products to fit dairy-free, diabetic, and heart-conscious diets), to say nothing of numerous textures, flavors, sizes, and coatings. Over a 10-year period, some 450 products were introduced. For example, the popularity of low-carbohydrate diets has prompted a host of entries, including Atkins Advantage, developed by the Atkins organization, which gained a substantial market share that peaked in 2003 and fell off sharply thereafter. Other participating brands include Zone- Perfect, Met-Rx, GeniSoy, EAS, CarboLite, Carb Solutions, and Gatorade energy bars. Masterfoods’ Snickers Marathon—a candy bar with a blend of vitamins, minerals, and protein— has blurred the division between candy and energy bars by seeking to gain share in the latter market. One concern of the energy bar industry is the skepticism among some quarters as to how qualitatively different its products are from candy bars in the first place.

The motivation for using an energy bar is primarily to provide a convenient energy boost. The original heritage of being a product to enhance the performance of top athletes engaged in demanding physical activities (like Lance Armstrong, a PowerBar endorser) created credibility and self-expressive benefits in the category’s early years. Because household penetration was still under 20 percent, however, the major firms worked to generalize “performance” to be relevant to anyone who needs to perform well during the day. In fact, the industry dream is to get people to label the category “performance nutrition” and think of it as enhancing one’s ability to complete any task.

New products in the category are going in several directions. A trend toward indulgent icings, coatings, and coverings has led some to morph toward candy bars. Others go the opposite way, using whole-grain ingredients for products somewhat like the original Clif bar and Quaker’s Oatmeal Squares for women. The makers of the Clif bar also have introduced a Mojo line of salty snack bars to provide alternatives to sweet-tasting bars and the Clif Nectar bar, an entirely organic nut and fruit bar. PowerBar introduced Nut Naturals, a low glycemic index bar. There are bars positioned around ingredients such as protein or soy bars. A major Japanese brand of soy bars, SoyJoy is now in the market with a dry bar that will not be confused with a candy bar.

The energy bar category has gone mainstream, moving from the bike shops to the grocery stores and exploding from just over $100 million in revenue in 1996 to an estimated $2 billion or more a decade later, with expected future growth exceeding 10 percent per year. It is fueled both by the confluence of trends toward low-carb, portable, nutritious snacks and meal replacements (along with a general concern for health and weight control) and by the introduction of new products. Along the way, it became large enough to attract the attention of major packaged-goods firms. In 2000, Nestle purchased PowerBar, which has remained the leading player, with the Clif bar (which has remained independent) emerging as its most formidable competitor. The Balance line of products was bought by Kraft, also in 2000.

Energy bars can be considered a part of a larger food bar category which is also growing rapidly. The market is divided fairly equally between granola bars (positioned as a snack food that is healthier than candy bars), breakfast/cereal/snack bars (used as a meal replacement), and energy bars. Energy bars have a far lower household penetration than the other food bar forms. The top marketers of food bars are Kellogg’s (Nutri-Grain), Quaker Oats, General Mills, and Slim-Fast.

Review the case above and answer the following questions:

1) Prepare an overview/history of the case industry or company.

2) Outline and summarize case details.

3) Summarize major Conclusions and insights on the company or industry.

Homework Answers

Answer #1

1. Overview: The Energy Bar industry

  • Started in 1986 by the firm PowerBar in Berkley, California
  • Positioned as athletic energy food
  • Competitor of Powerbar came up with Clifbar, which was superior in taste and texture
  • Another competitor offered balanced bar, with protein, fat and carbohydrate
  • Clifbar came up with Luna, an energy bar for active women, with vitamins and supplements
  • Powerbar came up with low calorie bar Pria for calorie conscious customers
  • The Balance strategy was introduced to launch various balanced energy bars
  • In addition to major brands, there were small and large firms offering subcategories of products like dairy-free, diabetic and heart conscious diets
  • A $100 million industry in 1996, grew to $2 billion industry within a decade
  • In 2000, Nestle purchased Powerbar and balance line of products brought by Kraft
  • Currently, the top food bars are Kellogg’s (Nutri-Grain), Quaker Oats, General Mills, and Slim-Fast

2. Summary of Case details

  • Energy Bar Started in 1986 by the firm PowerBar in Berkley, California and then positioned as athletic energy food for Runners or Bikers
  • Six year later the competitors of Powerbar, came up with Clifbar, which was superior in taste and texture and Balanced bar, with protein, fat and carbohydrate
  • Understanding the potential of un-served customers, mainly women, Clifbar came up with Luna, an energy bar for active women, with vitamins and supplements
  • To counter the competitors and acquire women who were not buying Luna, Powerbar came up with low calorie bar Pria for calorie conscious customers
  • The Balance strategy was introduced to launch various balanced energy bars
  • In addition to major brands, there were small and large firms offering subcategories of products like dairy-free, diabetic and heart conscious diets
  • There are various new products are offered in the market with niche positioning
  • A $100 million industry in 1996, grew to $2 billion industry within a decade
  • In 2000, Nestle purchased Powerbar and balance line of products brought by Kraft
  • Currently, the top food bars are Kellogg’s (Nutri-Grain), Quaker Oats, General Mills, and Slim-Fast

3. Summary of major Conclusions and insights

  • The Energy bar industry has come a long way within short span of time
  • There are products available for every segment of the customer
  • Due to many players in the industry, positioning as niche is the way to go forward
  • A single firm or brand/product, cannot serve every segment of customer, therefore having own presence in the niche have become need of hour
  • Due to fast moving life style, the Energy bar industry in expected to grow with higher rate and there is huge potential available for those who understand the need of the customer
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please do not attempt to solve if you can not answer all!!! THE ENERGY BAR INDUSTRY...
Please do not attempt to solve if you can not answer all!!! THE ENERGY BAR INDUSTRY In 1986, PowerBar, a firm in Berkeley, California, single-handedly created the energy bar category. Positioned as an athletic energy food, it was distributed at bike shops and events that usually involved running or biking. The target segment was the athlete who needed an efficient, effective energy source. Six years later, seeking to provide an alternative to the sticky, dry nature of the PowerBar, a...
Outline and answer all discussion questions following case description in details. (Do not attempt to solve...
Outline and answer all discussion questions following case description in details. (Do not attempt to solve if you can not fulfill all the requirements!!!!) THE ENERGY BAR INDUSTRY In 1986, PowerBar, a firm in Berkeley, California, single-handedly created the energy bar category. Positioned as an athletic energy food, it was distributed at bike shops and events that usually involved running or biking. The target segment was the athlete who needed an efficient, effective energy source. Six years later, seeking to...
Please do not attempt to answer the question if you have not read the case study...
Please do not attempt to answer the question if you have not read the case study already and cite your sources. What are the major elements of LVMH’s competitive strategy in the branded luxury products industry? How well do the pieces fit together? Is the strategy evolving?
Discussion: (Please do not attempt to solve if you can not answer all!!!) The Strategy of...
Discussion: (Please do not attempt to solve if you can not answer all!!!) The Strategy of Cultivating Interdependence All of life is an opportunity to think, relate, and work strategically. However, most people do not really think well, and they certainly do not think strategically by nature.  This IS something that can be learned! In Covey's chapter on "Paradigms of Interdependence," he talks about the "Emotional Bank Account" that we have in our relationship with others, and he identifies "Six Major...
In February 2012, the Pepsi Next product was launched into the US market. This case study...
In February 2012, the Pepsi Next product was launched into the US market. This case study provides students with an interesting insight into PepsiCo’s new product process and some of the challenging decisions that they faced along the way. Pepsi Next Case Study Introduction Pepsi Next was launched by PepsiCo into the US market in February 2012, and has since been rolled out to various international markets (for instance, it was launched in Australia in September 2012). The new product...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
Review and submit the Donatos: Finding the New Pizza case study below. Answer the following two...
Review and submit the Donatos: Finding the New Pizza case study below. Answer the following two questions: 2. Evaluate the Wassup meeting as an exploratory methodology to help define the research question. 4. What measurement scales would you have used on the survey that was part of the in-restaurant product tests? Abstract and Written Case: The pizza segment of the fast-food industry is very aggressive. As people’s tastes change and new diets become the rage, restaurant chains must decide if...
Liebeck v. McDonalds Restaurants: The Original Coffee Product Liability Case James M. Dedman, IV Back in...
Liebeck v. McDonalds Restaurants: The Original Coffee Product Liability Case James M. Dedman, IV Back in 1994, Stella Liebeck v. McDonalds Restaurants became one of the most talked about lawsuits in American history. To this day, that New Mexico state court case is an essential component of any tort reform debate or discussion of litigation lore. At that time, and to this day, the thought of a fast food drive-thru customer spilling coffee on herself in her vehicle and later...
Discuss ethical issues that can be identified in this case and the mode of managing ethics...
Discuss ethical issues that can be identified in this case and the mode of managing ethics Enron finds itself in this case. How would you describe the ethical culture and levels of trust at Enron? Provide reasons for your assessment. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among...
2. SECURING THE WORKFORCE Diversity management in X-tech, a Japanese organisation This case is intended to...
2. SECURING THE WORKFORCE Diversity management in X-tech, a Japanese organisation This case is intended to be used as a basis for class discussion rather than as an illustration of the effective or ineffective handling of an administrative situation. The name of the company is disguised. INTRODUCTION In light of demographic concerns, in 2012, the Japanese government initiated an effort to change the work environment in order to secure the workforce of the future. Japan is world renowned for its...