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Good-for-you consumption trends are proving good for sports nutrition products, but it's going to take more work for the product segment to reach peak performance.
Fact: A little over a year ago 27 million Americans said they were following some kind of low-carbohydrate regimen, be it Atkins, South Beach, or some other branded low-carb diet, according to the NPD Group, a Port Washington, N.Y.-based market research firm. That figure represented roughly 9.1 percent of the country.
By year's end, however, that number had plummeted to 2.4 percent. Do we detect a fad fade here?
The short answer is "yes...and no." While low-carbohydrate diets are on the wane, they're being replaced by more intelligent carbohydrate awareness, and lower-carb lifestyles. In turn, consumer awareness of the need to moderate intake of fat and sugar -- no doubt fueled by media coverage of the obesity epidemic among Americans -- has opened the door for many good-for-you consumables to enter the marketplace. And among the main beneficiaries of this groundswell of healthy consumption have been nutrition drinks and bars.
According to ACNielsen data, for example, sports and nutrition drinks experienced a 10 percent gain in all-channel dollar sales (food, mass, convenience, and drug, excluding Wal-Mart data) for the 52-week period ending March 12. In the $2 million-plus grocery channel (excluding supercenters), the gain was even greater: 10.6 percent. The trend was similar in unit volume, as the category increased 9.8 percent in all channels (excluding Wal-Mart) and grew 10.7 percent in $2 million-plus supermarkets (excluding supercenters).
"A typical dieter's attention spans about one year," says Marcia Mogelonsky, research analyst for Chicago-based market research firm Mintel. However, 25 percent of Americans continue to be cognizant of their carbohydrate consumption. That means they'd likely balance a high-carb product with a low-carb item.
A similar trend can be detected in the public's awareness of sugar consumption. As a result 100 percent fruit juice, once thought of as the ultimate health beverage, is now part of the balancing act that consumers play in maintaining a healthy diet. While carbonated soft drinks have lost much of their luster because of this focus on healthy consumption, bottled water and its next-generation offspring, nutrient-enhanced water, have been spreading like wildfire.
"Most consumers would agree that orange juice is healthy, and in a lot of ways it is," notes Matt Kahn, director of marketing for Whitestone, N.Y.-based Glaceau, maker of the VitaminWater line of nutrition beverages. "Moderation is the key. Juice does contain a lot of good stuff. But it also contains a lot of sugar."
To fill the need for a substitute beverage among consumers eschewing orange juice, Glaceau offers an orange-flavored drink, Essential, as part of its VitaminWater line. With half the calories, half the sugar, no acidity, the same amount of vitamin C, and more calcium than non-calcium-fortified OJ, Essential offers another key attribute over orange juice: It tends to be consumed beyond the breakfast occasion.
According to Kahn, "Our products are relevant and responsive to consumers' need states, throughout the entire day."
Going with the flow
Interestingly, the morphing of the sports drink category into a broader, less athlete-centric nutrition drink segment didn't really gain steam until the granddaddy of all sports drinks, Chicago-based Gatorade, launched the Propel line of enhanced water in 2000. Behind first Quaker Oats' and then PepsiCo's distribution muscle, Propel, which is lightly flavored, contains vitamins and nutrients, and offers only 30 calories per 24-ounce serving, quickly gained domination of the enhanced water market. According to Information Resources, Inc., the brand owned 47 percent of the U.S. enhanced water category at the end of 2004.
In addition to the added nutrients, the flavor profile of enhanced waters makes them more attractive to most active consumers. "We know from research that exercisers will drink more of a lightly flavored beverage than plain water, and will therefore stay better hydrated," says Lawrence Spriet, principal scientist at the Gatorade Sports Science Institute Canada.
That principle has led Glacéau to introduce a new line of low-cal fruit-flavored waters to the marketplace this summer. Glaceau FruitWater is made from pure vapor-distilled water with electrolytes added to expedite the hydration process. Sweetened with low levels of crystalline fructose, FruitWater, which comes in lemon, raspberry, peach, grape, and lime flavors, offers just 20 calories per serving.
In keeping with the trend toward moderation, Glacéau's position is that the rush to artificial sweeteners may have actually contributed to the obesity problem.
"Over the last 25 years, there has been an increase in the consumption of artificially sweetened beverages," says Cindy Sherwin, a nutrition consultant for Glaceau. "That coincides with a rise in the incidence of obesity. Because they're fully flavored but non-nutritive, artificial sweeteners trick our bodies into thinking they're drinking something packed with sugar. That increases our dependency on sweets, often actually making it more difficult to lose weight."
The suggested retail price for a 20-ounce bottle of Glaceau FruitWater is $1.49.
Another pioneer in the nutrient-enhanced beverage category, Norwalk, Conn.-based SoBe, is promoting healthy lifestyles among its consumers this summer with the assistance of professional triathlete and fitness expert Eric Harr. A nationally syndicated health columnist, TV commentator, and author, Harr is one of the country's leading exercise and health experts. This spring he has embarked on SoBe's "Leancities Tour," which recognizes 12 of the nation's healthiest cities while promoting the SoBe Lean line of low-calorie nutrition drinks.
"Eric Harr is a credible health-and-wellness expert who truly supports the brand," says Tom Smallhorn, SoBe's v.p. of marketing. "His energy and enthusiasm are boundless, and his strong media relationships will help us spread our message through print and broadcast outlets nationwide."
Part of that message will be the addition of Energy, Mango Melon, and Cranberry Grapefruit flavors to the SoBe Lean line. All SoBe Lean flavors contain just one gram of carbs and five calories or fewer per eight-ounce serving, as well as 100 percent of the RDA of vitamin C.
"I believe replacing sugary drinks with SoBe Lean is one small but important way to shift to a healthier lifestyle," says Harr.
Raising the bar
Unlike nutrition beverages, nutrition foods -- primarily energy bars -- haven't fared as well in terms of market growth compared with their liquid cousins, according to ACNielsen data. For the 52-week period ending March 12, supplement bars saw a meager 0.7 percent dollar growth in the combined food/convenience/drug/mass channels (excluding Wal-Mart data). The news was even more somber in the $2 million-plus grocery channel (excluding supercenters), where supplement bars saw a 0.1 percent decline in dollar sales over the previous year.
That trend mirrors what's going on in the sporting goods channel, where nutrition foods and supplements have long been in favor with target consumers. According to West Palm Beach, Fla.-based SportScanINFO, the leading market research and information service for the athletic and sporting goods industry, the nutrition bar segment was down 35.1 percent for the 52-week period ending March 27.
Overall, however, the nutrition category is healthy, with 2.13 percent dollar growth over the same reporting period, spurred primarily by the nutrition drink market, which is positively vibrant in the sporting goods channel, based on 77.14 percent growth. So what gives with nutrition bars?
"I think it's just a matter of oversaturation," says Neil Schwartz, SportScanINFO's director of marketing and business development. "There's simply too much selection for consumers, and they're having a hard time knowing what to buy and what to believe."
In the grocery channel, merchandising opportunities abound to take advantage of the synergies between the food and beverage segments, and encourage growth in the overall nutrition category.
"You see that going on in the health and natural foods channel," says Glacéau's Matt Kahn. "Not so much in traditional grocery yet, but it's coming. Whole Foods is a trendsetter, and I think you'll be seeing a lot more cross-merchandising within the overall nutritional category in the future. It's difficult in the grocery channel, because there are separate buyers for each category."
While the overall nutrition category may defy traditional pigeonholing, there certainly are enough commonalties between nutrition foods and beverages that cross-merchandising synergy should be a natural.
"It just makes sense," continues Kahn. "The categories definitely supplement each other rather than encroaching on each other. These are consumers looking for healthier options, and that occurs in both food and beverage categories. As grocery stores become more evolved in their thinking, I think you'll start seeing freestanding racks of nutrition bars in the aisle with nutrition drinks."
"There's also a category management component to consider," adds Aaron Simmons, director of sales at Schaumburg, Ill.-based ACNielsen North America Merchandising Services. "As retailers move toward aisle management, it would seem that these two categories [nutrition food and beverages] -- as long as they can be well defined -- would have an interrelationship that would benefit from an aisle management approach to merchandise them in a way that maximizes the profitability of both.
"If you're really thinking about the occasion, it could be that consumers are moving between drinks and other nutrition food products to satisfy their needs. And that may lend itself to creative merchandising solutions."
Sport shops lead off
In the sporting goods channel, nutrition foods and beverages are already merchandised together, primarily in displays near the register, where they effectively cross-promote each other.
"They're not meal replacements as much as they're supplements to meals -- snacks, in other words," adds Schwartz. "As such, they're far more in competition with chips and soda than they are with each other. Consumers have to make a choice when they look for an energy boost: 'Do I want a bag of Doritos and a soda, or do I get a nutrition bar and a sports drink?' They definitely won't do both. It just makes so much sense for the two nutrition segments to be merchandised together."
While the segment may be flat, market leader PowerBar is doing everything in its power to revitalize the category. In a marketing partnership with the National Basketball Association's "Rhythm 'n Rims" tour presented by Sprite, the Berkeley, Calif.-based company is launching a new line of energy bars, PowerBar Triple Threat. The new line, which debuted in January, consists of four flavors (Caramel Peanut Fusion, Chocolate Caramel Fusion, Chocolate Peanut Butter Crisp, and Caramel Peanut Crisp) that have the nutrients and minerals of a PowerBar (i.e., the "fuel"), but taste like a candy bar.
Each 55-gram bar is fortified with 16 vitamins and minerals and a balance of carbohydrates, protein, and fiber. The bars provide 100 percent RDA of vitamins C and E, 10 grams of protein, four grams of fiber, and 30 to 32 grams of carbohydrates. Additionally, the bars contain 220 to 230 calories and are free of trans fats.
As part of the NBA promotion, PowerBar and the NBA will host the PowerBar Triple Threat 3-on-3, a nationwide basketball competition held in several cities. Rhythm 'n Rims is the league's interactive basketball and music tour, with basketball activities and live musical performances running from April through August. The events are expected to attract over 1 million fans.
Not forgetting women
While the Triple Threat Rhythm 'n Rims program is primarily aimed at young male consumers, another PowerBar initiative targets females. With both nutrition food and beverage components, the PowerBar Pria Complete Nutrition line delivers 40 percent to 50 percent of women's RDA of calcium, with 170 calories and low sugar levels. The line, consisting of three bars and two shakes, launched nationwide this spring.
The shakes, sold in four-packs of four 11-fluid-ounce servings, are available in two flavors: Creamy Milk Chocolate and French Vanilla. Pria Complete Nutrition bars consist of a crispy center covered with a chocolate or creamy yogurt coating and are available in three flavors: Chocolate Peanut Butter Crisp, Chocolate Mint Crisp, and French Vanilla Crisp. The suggested retail prices are $1.49 per bar and $6.15 per four-pack of shakes.
Another nutrition system from Abbott Park, Ill.-based Abbot Laboratories, maker of Ensure, targets pregnant women by offering healthy alternatives to their unique—but quite common—cravings. Ensure Healthy Mom Shakes and Snack Bars offer at least 20 vitamins and minerals and are designed to meet the nutritional needs of pregnant women, nursing mothers, and women who may soon become pregnant.
The shakes come in Homemade Vanilla and Creamy Milk Chocolate flavors, offer 200 calories and only three grams of fat, and can be substituted for ice cream. With 150 calories per serving, the bars are available in Fudge Graham and Chocolate Chocolate Chip flavors.
"We want to create products that are versatile, convenient, nutritious, and, most of all, great-tasting," says Juliann Pavlovcic, manager, market research at Ensure.
The line, which launched in April, carries the suggested retail tags of $5.99 per four-pack of shakes and $3.49 for a box of 10 bars.