Often touted as the perfect on-the-go snack, cereal bars had a strong 2008, but their rate of growth has slowed over the past 12 months.

The market showed a 4% year-on-year growth in value and is now worth £314m (IRI Scanning Data to September 5, 2009). While this is down from the 8.3% increase seen in the previous 12 months, consumers on the lookout for a quick and healthy snack have kept the market strong.

"Cereal bars are a convenient snack," says Weetabix marketing controller Tony Corp. "In our increasingly busy lifestyles, consumers want a product that they can just grab and go. However, cereal bars are also functional; they act as a transition point between a chocolate bar or biscuit and a piece of fruit as a snack."

Honey Monster Bars marketing manager John Price agrees that cereal bars are great for those in a hurry. "The market has been helped by the increased popularity of on-the-go foods," he says. "These days people don't always have the opportunity to sit down to a bowl of cereal, so now they can eat a cereal bar anytime and anywhere."

According to Sanjay Panchal, Kellogg's head of marketing, cereal bars are now holding their own against some of the more traditional snacks, and retailers can integrate them into other categories, such as confectionery, to save on space without worrying about a drop in sales. "Cereal bars are now at home alongside chocolate confectionery in a store, offering a healthier but no less satisfying alternative to the traditional chocolate bar," says Panchal. "Rice Krispies Squares was the product that really broke the barrier and has helped the entire cereal bars market to be considered as a day-to-day snack option."

Price also believes that the product was instrumental in pushing cereal bars to be considered as a mainstream snack. "The best performer has been Rice Krispies Squares, which has been a key brand in driving cereal bars from simply breakfast replacement products into an everyday snacking product," he says.

Health matters

Another reason why cereal bars have remained popular is that they provide a healthy alternative for children's lunchboxes, says Price. "As cereal bars have moved into the general snacking market they have found a number of new competitors such as biscuits, chocolate bars and even savoury snacks such as crisps," he says.

"There are many ways in which we can compete well with this slew of other products. The most obvious is that cereals bars present a healthier option for kids. More and more schools are banning chocolate bars and mums want tasty snacks to replace these in their kids' packed lunches."

Corp at Weetabix agrees that schools' crackdown on unhealthy foods has led to an opportunity for the cereal bars market. "Kids' bars are well placed to continue growth, particularly with the emphasis on healthy lunchboxes," he says.

"Many schools no longer allow chocolate bars, so cereal bars such as Oaty bars offer the perfect alternative as they reassure mums on health, taste great and are appealing to kids."

But kids aren't the only focus when it comes to health. According to Kellogg's, adults who are watching what they eat can be a key target for cereal bar brands.

Panchal points out that the cereal bar market is ideal for those watching their calorie intake. "For a 'shapewatcher', the cereal bars snack market can be a minefield, and consumers are looking for the healthy option," he says. "Brands such as Special K find the right balance between an indulgent treat and a healthy one. That's why Special K cereal bars have seen a 12% growth in the past 12 months."

General Mills marketing director Ed Culf points out that there has to be a balance between health and taste. "Consumers are increasingly seeking healthier snacks without having to compromise on taste," he says.

"They are seeking products that fulfil both their rational and emotional snacking needs. It is crucial that c-store retailers stock a range of products that meet both of these needs."

Size is everything

While customers will be looking to make sure that they and their children eat well, they will also be looking at value and convenience. Multipacks offer a convenient way for parents to have a ready supply of bars available for lunchboxes, however sales in the convenience channel are still skewed towards single units.

"Single bars and multipacks have different usage occasions, but both have a home in the convenience channel," says Price. "Generally, people will pick up a single as snack to eat right away and this accounts for 83% of units sold in the channel. However, mums may often need to pop to a convenience store to get a sweet treat for their child's lunchbox and a multipack of cereal bars can be perfect for this."

Panchal attributes the lack of popularity of multipacks in the convenience channel to unavailability. "Most retailers focus on single bars as they may not have space to carry many ranges of multipacks," he says. "Yet there is a huge opportunity for those who can stock one or two of the key lines in multipack format."

He adds that the cereal bars market as a whole offers potential for retailers. "The level of growth we have seen over the past two years proves that the category is strong and lucrative," says Panchal. "Times are tough and people are looking to treat themselves without feeling guilty about it, and cereal bars are the perfect option to do this."

If retailers can find a balance between a range of single-unit cereal bars that offer a tasty yet healthy treat for on the go and multipacks that are perfect for lunchbreaks, then they can capitalise on the growth in the market.

Top 10 ceral bars

1 Kellogg's Rice Krispies Squares marshmallow

2 Kellogg's Nutri Grain soft bake strawberry

3 Kellogg's Rice Krispies Squares caramel and chocolate

4 Tracker chocolate chip

5 Kellogg's Special K cereal bars original

6 Eat Natural apricots and almond

7 Kellogg's Nutri Grain soft bake apple

8 Eat Natural brazils sultanas almonds and hazelnuts

9 Tracker roasted nut

10 Kellogg's Nutri Grain Elevenses raisin

Source: IRI Scanning Data, 52 weeks to September 5, 2009

Ones to watch

Honey Monster Food has released Monster Puffs, a cereal bar version of the children's breakfast. Monster Puffs is seen as a lighter snack for children to eat between meals. It is available in milk and milk chocolate flavours.

rrp: single 45p; four-pack £1.45

tel: 020 8574 2388

General Mills has released a 35p pricemarked pack for its Nature Valley snack bars. The promotion is being supported by a £4m marketing package including high-profile TV advertising that will run until the end of November.

rrp: 35p

tel: 01895 201 100

Weetabix has released a range of bars for kids. Weetabix Oaty bars are available in strawberry, white chocolate and milk chocolate flavours. They contain less than 85 calories and provide 30% of a child's recommended daily fibre intake.

rrp: 32p

tel: 01536 722 181

McVities has launched a range of Go ahead! Fruity Crunch bars. They are available in two variants chocolate & red berry and citrus twist and in a multipack of six. Each Fruity Crunch bar contains less than 100 calories.

rrp: £1.35

tel: 0800 138 0813

Retailer view

Bob Gibson, Premier, Basingstoke, Hampshire

"We're stocking a core range of cereal bars mostly Kellogg's and Weetabix products. There are a lot of other brands out there, but people seem to know and trust these two the most. If either of those released a new product or range, we'd consider stocking that before any other brand.

"Sales of cereal bars have increased in the store over the past couple of months. It may be to do with people having less time to eat breakfast at home and choosing to eat a cereal bar on their way to work, or at their desk. Special K and Coco-Pops bars are probably the two most popular bars that we currently sell.

"We've also just started selling multipacks of cereal bars as we feel that there will be a demand for them from mothers looking for something to put in the lunchbox for their children."