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Cereal and Snack Bars - UK - February 2011

Growth of 32% against 2005 saw the market reach an estimated £371 million in 2010. The robust growth conceals a slowing trend in annual growth rates from 8% in 2008 to 4% in 2009 and just 2% in 2010.

This partly reflects the slowing trend in food price inflation since 2008. However, the market also appears to have been negatively affected by the recession, and the shift in consumer focus from health, a strength area for the bars, to value for money.

  • Variety packs stand to appeal to the three in five users of cereal and snack bars who report being interested in multipacks offering different flavours.
  • Greater focus on nutritional benefits in marketing and product development stands to attract the nearly two in three cereal and snack bar users stating an interest in such positive nutrition.
  • Breaking away from staple flavours like chocolate and strawberry stands to chime with nearly half of cereal and snack bar users who prefer bars with more adventurous flavours and ingredients.
  • A high-quality proposition continues to provide opportunities in spite of the recession, as nearly two in five (37%) cereal and snack bar users report they often buy more expensive bars with quality ingredients.
  • Polishing their value credentials could increase the appeal of cereal and snack bars among the three in five non-users who view them as expensive compared to other snacks.
  • While few cereal and snack bars highlight themselves as filling, this could help brands differentiate themselves among the 16-24-year-olds. 71% of the age group eat cereal and snack bars, four in five of those choosing the bars as a filling snack.

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definition
          • Abbreviations
          • Future Opportunities

              • A Simple Balance for Health
                • The Real Thing
                • Market in Brief

                  • Growth of 29% to £479 million forecast by 2015
                    • Everyday and healthy bars capture two thirds of the market
                      • Kellogg's dominates the market
                        • On-the-go snacking, lunchboxes and health continue to provide opportunities
                          • Three in five adults eat cereal, snack and energy bars
                            • Strong interest in variety packs, nutritional benefits and adventurous varieties
                              • Non-users put off by poor value and health credentials
                              • Internal Market Environment

                                • Key points
                                  • Snacking and treats benefit in the recession
                                      • Figure 1: Trends in the tendency to snack and eat treats, 2006-10
                                    • Half the nation snack on the go
                                      • The lunchbox opportunity remains lucrative
                                        • Additive-free food can still justify a premium
                                            • Figure 2: Trends in attitudes towards ingredients and additives in food, 2006-10
                                          • One in three adults are trying to lose weight
                                              • Figure 3: Trends in attitudes towards weight control and calories, 2006-10
                                          • Broader Market Environment

                                            • Key points
                                              • Changing age profile brings opportunities and challenges
                                                  • Figure 4: Changes in the age structure of the UK population, 2010-15
                                                • Growth of C2s is good news for the cereal and snack bar market
                                                  • Figure 5: Changes in the socio-economic structure of the UK population, 2010-15
                                                • Consumer spending to recover slowly
                                                    • Figure 6: Consumer expenditure at current and constant 2010 prices, 2005-15
                                                  • Cost pressures loom
                                                    • Figure 7: Weekly prices of cereals in England and Wales, 2008-10
                                                • Competitive Context

                                                  • Key points
                                                    • Cereal, snack and energy bars play many roles
                                                      • Figure 8: Performance of selected markets competing with cereal, snack and energy bars, 2009-10
                                                      • Figure 9: Performance of selected markets competing with cereal, snack and energy bars, 2005-10
                                                    • Many bars compete with wholesome snacks...
                                                      • …while others aim for indulgence
                                                      • Strengths and Weaknesses

                                                        • Strengths
                                                          • Weaknesses
                                                          • Who’s Innovating?

                                                            • Key points
                                                              • Fragmented NPD activity reflects the structure of the market
                                                                • Figure 10: New product launches in the UK cereal, snack and energy bar market, by brand, 2010
                                                              • Vegetarian and no additives are top claims
                                                                • Figure 11: New product launches in the UK cereal, snack and energy bar market, by top 16 claims, 2010
                                                                • Figure 12: Change in share of all new product launches in the UK cereal, snack and energy bar market, by claim, 2008-10
                                                              • Claims popular in overall food gain ground
                                                                • Mixed trends in functional claims
                                                                  • Functional bars enjoy active NPD globally
                                                                    • Chocolate and strawberry are top flavours
                                                                        • Figure 13: Top five most common flavour components in new cereal, snack and energy bars, 2008-10
                                                                      • Smaller formats appear on the global arena
                                                                        • Boundaries between bars and biscuits continue to blur
                                                                        • Market Size and Forecast

                                                                          • Key points
                                                                            • Annual growth rates are slowing
                                                                              • Underlying consumer trends and brand activity support growth
                                                                                • Figure 14: Forecast of UK retail sales of cereal and snack bars, by value, 2005-15
                                                                              • Forecast
                                                                                • Figure 15: Forecast of UK retail sales of cereal and snack bars, by value, 2005-15
                                                                              • Slow spending growth and ageing population dampen short-term outlook
                                                                                • …growth of ABs and healthy eating bodes well longer-term
                                                                                  • Forecast methodology
                                                                                  • Segment Performance

                                                                                    • Key points
                                                                                      • Figure 16: UK retail value sales of cereal, snack and energy bars, by type, 2010 (est)
                                                                                    • Nature Valley has energised everyday bars
                                                                                      • Mixed performance from healthy bars
                                                                                        • Kellogg’s Rice Krispies Squares drive sales of children’s bars
                                                                                          • Eat Natural still leads the premium end
                                                                                          • Market Share

                                                                                            • Key points
                                                                                              • Kellogg’s leads a fragmented market
                                                                                                • Figure 17: Manufacturers’ estimated shares in UK retail value sales of cereal, snack and energy bars, 2010
                                                                                                • Figure 18: Brand shares in the cereal, snack and energy bar market, by value, 2008-10
                                                                                              • Mixed performances from market leaders
                                                                                                • Strong marketing support fuels rising stars
                                                                                                  • Eat Natural maintains share
                                                                                                    • Own-label still small
                                                                                                    • Companies and Products

                                                                                                      • Kellogg’s
                                                                                                        • United Biscuits
                                                                                                          • Weetabix
                                                                                                            • Eat Natural
                                                                                                              • General Mills (Nature Valley)
                                                                                                                • Jordans
                                                                                                                  • Mars
                                                                                                                    • Raisio
                                                                                                                      • Big Bear Group
                                                                                                                        • Glisten
                                                                                                                        • Brand Elements

                                                                                                                          • Brand map
                                                                                                                              • Figure 19: Attitudes towards and purchase of cereal, energy and snack bar brands, December 2010
                                                                                                                            • Brand attitudes
                                                                                                                              • Figure 20: Attitudes by cereal, energy and snack bar brand, December 2010
                                                                                                                            • Brand personality
                                                                                                                              • Figure 21: Cereal, energy and snack bar brand personality – macro image, December 2010
                                                                                                                              • Figure 22: Cereal, energy and snack bar brand personality – micro image, December 2010
                                                                                                                            • Correspondence analysis
                                                                                                                              • Brand experience
                                                                                                                                • Figure 23: Cereal, energy and snack bar brand usage, December 2010
                                                                                                                                • Figure 24: Satisfaction with various cereal, energy and snack bar brands, December 2010
                                                                                                                                • Figure 25: Consideration of cereal, energy and snack bar brands, December 2010
                                                                                                                                • Figure 26: Consumer perceptions of current cereal, energy and snack bar brand performance, December 2010
                                                                                                                                • Figure 27: Cereal, energy and snack bar brand recommendation – Net Promoter Score, December 2010
                                                                                                                              • Brand index
                                                                                                                                • Figure 28: Cereal, energy and snack bar brand index, December 2010
                                                                                                                                • Figure 29: Cereal, energy and snack bar brand index vs. recommendation, December 2010
                                                                                                                              • Target group analysis
                                                                                                                                • Figure 30: Target groups, December 2010
                                                                                                                                • Figure 31: Cereal, energy and snack bar brand usage, by target groups, December 2010
                                                                                                                              • Group One – The Conformists
                                                                                                                                • Group Two – Simply the Best
                                                                                                                                  • Group Three – Shelf Stalkers
                                                                                                                                    • Group Four – Habitual Shoppers
                                                                                                                                      • Group Five – The Individualists
                                                                                                                                      • Brand Communication and Promotion

                                                                                                                                        • Key points
                                                                                                                                          • Adspend fluctuates as major players adjust strategies
                                                                                                                                            • Figure 32: Main monitored media advertising spend on cereal bars, 2006-10
                                                                                                                                          • £2 in every £3 of adspend is by Kellogg's
                                                                                                                                            • Figure 33: Main monitored media advertising spend on cereal bars, by advertiser, top five, 2008-10
                                                                                                                                            • Figure 34: Main monitored media advertising spend on cereal bars, by brand, top ten, 2008-10
                                                                                                                                          • TV still dominates
                                                                                                                                            • Figure 35: Main monitored media advertising spend on cereal bars, by media type, 2008-10
                                                                                                                                          • Celebrity and TV tie-ups gain popularity
                                                                                                                                          • Channels to Market

                                                                                                                                            • Key point
                                                                                                                                              • Figure 36: UK retail distribution of cereal bars, by value, by type of outlet, 2007-10
                                                                                                                                            • Impulse, treat and meal demand provide opportunities
                                                                                                                                            • Consumer – Usage of Cereal and Snack Bars by Brand

                                                                                                                                              • Key points
                                                                                                                                                • Youngsters, families and C2s eat cereal, snack and energy bars most
                                                                                                                                                    • Figure 37: Usage of cereal, snack and energy bars in the last six months, by type, November 2010
                                                                                                                                                    • Figure 38: Usage of cereal, snack and energy bars, by age and household income, November 2010
                                                                                                                                                  • Lapsed users geared towards 25-44-year-olds
                                                                                                                                                    • Usage by children is rising slowly
                                                                                                                                                        • Figure 39: Consumption of cereal bars – 7-19s, 2008-10
                                                                                                                                                      • Most users are brand-loyal
                                                                                                                                                        • Figure 40: Repertoire of consumption of cereal, snack and energy bars in the last six months, November 2010
                                                                                                                                                      • Only the diet bars have a clear female bias
                                                                                                                                                        • Figure 41: Usage of cereal, snack and energy bars in the last six months, by type, by gender, November 2010
                                                                                                                                                    • Consumer – Occasions for Eating Cereal, Snack and Energy Bars

                                                                                                                                                      • Key points
                                                                                                                                                        • A filling, on-the-go snack with strong health credentials
                                                                                                                                                            • Figure 42: Attitudes of users towards cereal and snack bars, November 2010
                                                                                                                                                          • The bars are first and foremost for on the go
                                                                                                                                                            • The bars enjoy image as filling
                                                                                                                                                              • Two in three choose the bars as a 'better-for-you' alternative
                                                                                                                                                                • The bars are a treat to nearly half of users
                                                                                                                                                                • Consumer – Attitudes towards Cereal, Snack and Energy Bars

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Nutrition and variety packs spark majority interest
                                                                                                                                                                        • Figure 43: Attitudes towards choosing and buying cereal, snack and energy bars, November 2010
                                                                                                                                                                      • High interest in nutritional benefits
                                                                                                                                                                        • Variety and adventurous flavours chime with consumers
                                                                                                                                                                          • Price is not all-important
                                                                                                                                                                            • Only a minority shun the bars at home
                                                                                                                                                                            • Consumer – Non-users' Attitudes towards Bars

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Doubts about value for money and healthiness are key barriers
                                                                                                                                                                                    • Figure 44: Non-users' attitudes towards cereal, snack and energy bars, November 2010
                                                                                                                                                                                  • Poor value image remains an issue for the bars
                                                                                                                                                                                    • Half of non-users doubt healthiness of the bars
                                                                                                                                                                                      • One in three think the bars are for dieters
                                                                                                                                                                                      • Targeting Opportunities

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Four target groups
                                                                                                                                                                                            • Figure 45: Target groups for cereal and snack bars, November 2010
                                                                                                                                                                                          • Indulgers (38%)
                                                                                                                                                                                            • Snack-swappers (17%)
                                                                                                                                                                                              • Bar Lovers (24%)
                                                                                                                                                                                                • Big Spenders (21%)
                                                                                                                                                                                                • Appendix – Internal Market Environment

                                                                                                                                                                                                    • Figure 46: Agreement with selected lifestyle statements, 2006-10
                                                                                                                                                                                                    • Figure 47: Agreement with selected lifestyle statements, by demographics, 2010
                                                                                                                                                                                                    • Figure 48: Agreement with selected lifestyle statements, by demographics, 2010 (continued)
                                                                                                                                                                                                • Appendix – Competitive Context

                                                                                                                                                                                                    • Figure 49: Performance of selected markets competing with cereal, snack and energy bars, 2006-10
                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                    • Figure 50: Best and worst case forecasts for cereal and snack bars, 2010-15
                                                                                                                                                                                                • Appendix – Consumer – Usage of Cereal, Snack and Energy Bars

                                                                                                                                                                                                    • Figure 51: Cereal, snack and energy bars eaten in the last six months, by brand/type, November 2010
                                                                                                                                                                                                    • Figure 52: Most popular cereal, snack and energy bars eaten in the last six months, by brand/type, by demographics, November 2010
                                                                                                                                                                                                    • Figure 53: Next most popular cereal, snack and energy bars eaten in the last six months, by type, by demographics, November 2010
                                                                                                                                                                                                    • Figure 54: Other cereal, snack and energy bars eaten in the last six months, by brand/type, by demographics, November 2010
                                                                                                                                                                                                    • Figure 55: Consumption of cereal bars – 7-19s, by demographics, 2010
                                                                                                                                                                                                    • Figure 56: Consumption of cereal, snack and energy bars in the last six months, by brand/type, by repertoire, November 2010
                                                                                                                                                                                                    • Figure 57: Repertoire of consumption of cereal, snack and energy bars in the last six months, by demographics, November 2010
                                                                                                                                                                                                • Appendix – Consumer – Users' Attitudes towards Cereal, Snack and Energy Bars

                                                                                                                                                                                                    • Figure 58: Attitudes of users towards cereal, snack and energy bars, November 2010
                                                                                                                                                                                                    • Figure 59: Agreement with the statement ‘I eat it when I need a filling snack’ and ‘I eat it as part of a meal eg lunch, as a dessert after dinner’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 60: Agreement with the statement ‘I eat it when I need a snack on the go’ and ‘It’s more nutritious than snacks like chocolate/sweets/crisps’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 61: Agreement with the statement ‘It’s a lower-calorie alternative to snacks like chocolate/sweets/crisps’ and ‘I eat it when I feel like a treat’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 62: Agreement with the statement ‘I eat it when I need an energy boost’, by demographics, November 2010
                                                                                                                                                                                                • Appendix – Consumer – Attitudes towards Choosing and Buying Cereal, Snack and Energy Bars

                                                                                                                                                                                                    • Figure 63: Attitudes towards choosing and buying cereal, snack and energy bars, November 2010
                                                                                                                                                                                                    • Figure 64: Agreement with the statement ‘I prefer cereal/snack/energy bars with more adventurous/exotic flavours/ingredients’ and ‘I often buy more expensive bars that are made from quality ingredients’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 65: Agreement with the statement ‘I buy multipacks of cereal/snack/energy bars’ and ‘I’d sometimes rather buy single bars than multipacks‘, by demographics, November 2010
                                                                                                                                                                                                    • Figure 66: Agreement with the statement ‘I’d buy more cereal/snack/energy bars if they were easier to find in-store’ and ‘I only buy cereal/snack/energy bars when they are on promotion’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 67: Agreement with the statement ‘I would be interested in multipacks offering different flavours/varieties’ and ‘I would be interested in cereal/snack/energy bars with nutritional benefits (eg high in fibre)’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 68: Agreement with the statement ‘I rarely eat cereal/snack/energy bars at home’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 69: Attitudes towards choosing and buying cereal, snack and energy bars, by repertoire, November 2010
                                                                                                                                                                                                • Appendix – Consumer – Non-users’ Attitudes towards Cereal, Snack and Energy Bars

                                                                                                                                                                                                    • Figure 70: Non-users' attitudes towards cereal, snack and energy bars, November 2010
                                                                                                                                                                                                    • Figure 71: Agreement with the statement ‘I am not sure what cereal/snack/energy bars are’ and ‘I’ve tried them but wouldn’t buy them again’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 72: Agreement with the statement ‘I think they are mainly aimed at dieters’ and ‘I buy them for my children but not for myself’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 73: Agreement with the statement ‘I don’t think they look very appetising’ and ‘If I am going to have a snack then I’d rather have something else (eg chocolate, crisps etc)’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 74: Agreement with the statement ‘I don't think they are any healthier than other snacks’ and ‘I am not interested in healthy snacks’, by demographics, November 2010
                                                                                                                                                                                                    • Figure 75: Agreement with the statement ‘They are expensive compared to other snack options’, by demographics, November 2010
                                                                                                                                                                                                • Appendix – Consumer – Target Groups

                                                                                                                                                                                                    • Figure 76: Target groups, by demographics, November 2010
                                                                                                                                                                                                    • Figure 77: Consumption of cereal, snack and energy bars in the last six months, by brand/type, by target groups, November 2010
                                                                                                                                                                                                    • Figure 78: Repertoire of consumption of cereal, snack and energy bars in the last six months, by target groups, November 2010
                                                                                                                                                                                                    • Figure 79: Attitudes of users towards cereal and snack bars, by target groups, November 2010
                                                                                                                                                                                                    • Figure 80: Attitudes towards choosing and buying cereal, snack and energy bars, by target groups, November 2010
                                                                                                                                                                                                    • Figure 81: Statements on eating habits, by target groups, November 2010

                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                • Associated British Foods Plc
                                                                                                                                                                                                • Cadbury Schweppes Plc
                                                                                                                                                                                                • Dorman-Roth Foods
                                                                                                                                                                                                • Dorset Cereals
                                                                                                                                                                                                • Eat Natural Limited
                                                                                                                                                                                                • Green & Black's Ltd
                                                                                                                                                                                                • Honey Monster Foods
                                                                                                                                                                                                • Kellogg Company of GB Limited
                                                                                                                                                                                                • Nature Valley
                                                                                                                                                                                                • PepsiCo Inc
                                                                                                                                                                                                • Quaker
                                                                                                                                                                                                • The Big Food Group Plc
                                                                                                                                                                                                • The Fabulous Bakin’ Boys
                                                                                                                                                                                                • The Food Doctor Ltd
                                                                                                                                                                                                • Unilever Bestfoods UK Ltd
                                                                                                                                                                                                • United Biscuits
                                                                                                                                                                                                • W Jordans (Cereals) Ltd
                                                                                                                                                                                                • Waitrose
                                                                                                                                                                                                • Weetabix Ltd.

                                                                                                                                                                                                Cereal and Snack Bars - UK - February 2011

                                                                                                                                                                                                £1,995.00 (Excl.Tax)