MOUNTAIN RANGE 2004-10-04 (2)

LUCIA MOSES

BOULDER, Colo. -- Snack bar sales are surging nationwide, and especially in cities like Boulder.

Nestled at the foot of the Rocky Mountains 30 miles northwest of Denver, Boulder is home to the University of Colorado, a high concentration of high-tech firms and an active, outdoorsy population. Cycling, hiking and skiing are popular pastimes for residents. Highly educated and affluent, they're likely to be young and single. They're more likely to shop at REI, the outdoor sporting goods store, and Wild Oats than a Kmart or Albertsons. When they're on the go and seeking an energy boost or meal replacement, they're likely to snack on an energy or nutrition bar.

Dollar sales of the top 20 bars grew 13% to $1.6 billion in the year ended Jan. 25, according to Information Resources Inc., Chicago. Total category sales are expected to more than double by 2007, estimated Packaged Facts, New York.

The explosion of brand extensions and flavors in the category -- which includes cereal, nutrition, diet and athletic -- poses merchandising challenges for retailers. Do bars belong in food or health care? What about diet varieties? Here, consumers are less likely than the overall Denver market population to be dieting, but their health and wellness orientation no doubt is a strong consideration in how the category is merchandised.

On recent visits to four of the area's top 10 retailers, SN found varying approaches. Yet regardless of format, all heavily merchandised and promoted the category. Bars are everywhere: They often lead off the aisle in individual packages, and get secondary displays in the aisle and near cash registers. Competition ensured well-stocked shelves and heavy use of price cuts.

King Soopers

1650 30th Street, Boulder

In keeping with the strong natural foods position at this older King Soopers, the Kroger-owned store separated its low-carb and diet from its natural and nutrition bars. While the first category was relegated to an eight-foot section at the rear of HBC, energy bars received prominent placement at the beginning of the natural foods aisle, located next to produce.

The aisle had an old-fashioned look that was distinct from the rest of the store. A wood-like "Natural Foods" sign hung above it. The flooring resembled natural wood, a departure from the linoleum in the rest of the store. The shelving sported a homey checkerboard pattern. Oval, wood-like signs marked the categories: cereal, sauces, pastas, soy milk, crackers and soda. Elsewhere, natural foods were identified using the same old-fashioned design elements. A hanging sign reading "Natural Food Shoppe" hung over an extensive selection of frozen natural foods, which were identified by shelf tags as organic or dairy-free.

A vertical "Natural Snacks" sign set off the well-stocked bars section, which extended about 12 feet. Better-for-you brands like Luna and Clif were prominently featured, but the presence of Snickers energy bars and an aisle display of Carbolite bars gave the section broader appeal. The bars also were merchandised on the bottom shelves of a rounded endcap that carried bulk foods.

Bars were heavily promoted: Buy-one, get-one offers were plentiful, and the category's dynamic nature was evidenced by the presence of many "New Item" shelf tags.

Safeway

3325 28th Street, Boulder

This older Safeway was similar in size to the King Soopers store, but had a smaller natural foods aisle and about half the shelf space for bars than King Soopers. Nutrition bars led off the aisle. Across the aisle were diet shakes, Atkins muffin mixes, other products from the Atkins low-carb line, and vitamin supplements. In a distinctive cross-merchandising approach, Safeway had a three-foot display of yoga mats and video tapes next to the diet shelf.

The bars were divided between diet/supplement and better-for-you. However, on the day of SN's visit, the distinctions were somewhat blurred, with Luna and Clif bars found in the diet section and Joyride bars in the better-for-you section. Many of the bars in that set came in tantalizing flavors, such as GeniSoy's Ultimate Chocolate Fudge Brownie and Tiger's Milk's Chocolate Peanut Butter Crisp -- better for you, but tasty, too.

Elsewhere in the store, Power Bar's Protein Plus and Pria Carb Select were promoted in cardboard displays at the registers.

Here, as elsewhere, bargains were plentiful. Tiger's Milk bars were marked down to 69 cents. There were 10 for $10 and five for $5 sales on several others. Many were labeled with "New Item" shelf tags.

SuperTarget

400 Marshall Road, Superior

Unlike the conventional supermarkets, this SuperTarget about five miles from Boulder merchandised its energy bars in HBC instead of grocery. The bars were carried near the front of the store in a section marked diet pills and nutrition bars. The selection was substantial, with 10 feet of bars leading off the aisle, followed by Slim-Fast and other weight-loss drinks. Diet supplements ran across the top of the shelf.

Educational signs throughout the store's grocery aisles that described products' benefits and uses also set this store apart from its conventional counterparts. In the bars section, horizontal shelf signs informed shoppers that balanced bars are 40% carbs, 30% protein and 30% fat, and pointed out that low-carb bars' low-calorie, nutrient-dense composition can help with weight loss. Another suggested using bars as meal replacements.

Bars were segregated in three sections, generally as follows: natural (ZonePerfect, Kashi GoLean), low carb (Carborite, Atkins) and weight loss/nutrition (Slim-Fast, Luna). Bars touting a weight-loss message were found throughout, however. Carborite low-carb cereal bars also were found on one of two endcaps devoted to low-carb products.

In the HBC aisle, several varieties were marked with price cuts and for clearance during SN's visit. Among them were individual Luna Bars in Dulce de Leche and S'mores flavors on sale for $1.19; Carborite bars could be had for 99 cents and 84 cents. Other bars were sold there in boxes of six.

Wild Oats

303 Marshall Road, Superior

The natural foods store distinguished itself from conventional supermarkets with its selection and variety. In Wild Oats Marketplace's new prototype store, located in the same shopping center as the SuperTarget, nearly 200 stockkeeping units filled 16 feet of shelf space in one of the first Center Store aisles. Brands included R.W. Knudsen's Recharge, Power Dream and GeniSoy.

In keeping with its commitment to carry only all-natural foods, the retailer doesn't carry Atkins or other brands that contain artificial ingredients. "We had a lot of people asking for Atkins products," stated Sonja Tuitele, spokeswoman for Wild Oats, the only one of the four retailers that provided a store tour to SN. "We decided, 'No, this is who we are. We're not going to compromise our standards."'

Wild Oats publishes an in-store shopping guide for people seeking low-carb foods.

The retailer is big on cross merchandising, and this category was no exception. Energy drinks ran across the top of the nutrition bar shelves, which stand five feet tall -- a shelf height that runs throughout the new prototype. Bags of soy nuts hung from the shelves, and crackers stood in aisle columns. During the week of Sept. 20, Wild Oats promoted three bars in its ad, ZonePerfect nutrition bars, Kashi Golean bars and PowerBar Harvest Bars, for 99 cents each.

BOULDER COUNTY PROFILE

Population: 278,231

Median age: 34.3

Average wage: $44,000

Ethnic makeup: 78.4% white non-Hispanic, 7.1% Hispanic, 14.5% other (not white or Hispanic)

Snow-skied in past 12 months: 34%

Rode bicycle 12-plus times in past year: 42%

Hold one or more college degrees: 57.4%

Major employers: IBM Boulder, Ball Corp., Storage Technology Corp.

Sources: U.S. Census, The Media Audit and Metro Denver Economic Development Corp.