Will 2018 be the “Year of the Protein-Packed Confectioneries”?
I would bet that most of us functional CPG industry veterans have probably ate our weight in protein bars over the years. Recently, I have had more amazing protein bars compared to the less appealing variety, but we can all agree that they have come a LONG way since Bob Hoffman launched his soy-based protein bar in the 1950s.
It is estimated that the U.S. protein bar market will reach approximately $2.2 billion at the end of 2018 with the CAGR growth of around 8–10% for the next several years. Analysts consider nutritional bars containing equal or more than 20 percent of the RDI per reference amount customarily consumed, a protein bar. While these protein bars are a large market overall, if you look at the larger catch-all “functional foods” category, you see that the opportunity spans pretty much across all sub-categories, with many being focused on “protein-added” product development.
The same functional CPG industry veterans that have ate their weight in protein bars also know that protein bar popularity, both in “type” and brand, have a short life-cycle. These popular protein bars (or types) usually launch, grow, and then fade off into the sunset well before a decades time. With that shortened consumer interest, high protein snacks in the sports nutrition market have started to take on new looks…
Current “Alternatives” to Protein Bars
Protein Cookies
In the last few years, the sports nutrition market has seen protein cookies become a product line extension for brands that have protein bars. These protein cookies have seen success from very fast consumer adoption. For brands, the product development popularity of these protein cookies have come in part because of the ease of manufacturing. Existing protein bar contract manufacturers usually have capabilities and ingredients to create the protein cookies because of its current similarity to protein bars.
Protein Nut Butters
Another protein-added application that has become popular in the last few years has been to nut butters. These protein nut butters usually consist of a general nut butter base, flavor system, and a protein source. Adoption of the protein nut butters have been strong, but some consumers complain about the gritty mouth feel. The space is also highly competitive, lower margins, and fairly low levels of merchandising exists currently at larger retail channels. Being that the product is heavier to ship per unit, it also creates low profitability unit economics in the digital channel.
What’s next?
If you follow the sports nutrition CPG space closely, you have seen some launches that would be more associated confectionery-type CPG products. Some of the more popular recent ones include:
- Optimum Nutrition Protein Coated Almonds
- Performix Protein Bark
- MyProtein High Protein Chocolate
While most sports nutrition brands have not innovated in this manner, will these product launches become an indicator of the future? Or is it better to stick to more traditional protein bars and cookies?
My Thoughts
I always look for outside inspiration when coming up with product development strategies for clients. In my opinion, it’s usually best to see what other categories are doing with similar market conditions. The copy-cat nature of sports nutrition will only get you so far in your revenue aspirations. For this scenario, the “protein-added” evolution in food and beverage is just getting started, so I don’t see this being a bad place to innovate if you have the cash flow, manufacturing contacts, and adequate sales capabilities. Additionally, I see some opportunities for licensing or partnership deals if you can lock-in someone that understands the needs to get “healthier” with their legacy brand portfolio.
I think if you are going dairy protein you have many of the traditional confectionery product forms that you can explore re-making “better for you” in the next few years that consumers will naturally be attracted to. Alternatively, if you are going the plant-based protein route, I would stick to more traditional applications at this time, as the market is less saturated in both e-commerce and grocery/mass channels.
As for flavor opportunities, I think the market is ready for flavor innovations that are more progressive and match some of the most-popular emerging food and beverage brands. The normal Chocolate, Chocolate Peanut Butter, and whatever else is boring and not very playful to help create buzz for your product. The current economic environment enjoys food exploration, so take some chances, you won’t regret it!
