WONDER BARS

RICHARD TURCSIK

Granola bars aren't just for health nuts anymore. They're not just for health food stores anymore, either.

Consumers are bellying up to the bars -- granola bars, along with their cousins, cereal bars and fruit bars -- encouraged by creative advertising from manufacturers.

In the last year or two, the trend has placed the bar snack segment solidly into the mainstream, and into more and more grocery carts. Sales are on an upward spiral with no end in sight, according to supermarket buyers.

"The bar snack segment is fixing to pop loose," said Peter Jost, grocery buyer at Harp's Food Stores, Springdale, Ark.

"Our sales of granola bars have been doing great, and the new bars like the Nutri-Grain are doing outstanding business," said John Burger, category manager at Randalls Food Markets in Houston. Business has been so good that Randalls recently added three stockkeeping units of private-label granola

bars to its lineup.

"Bar snacks is a growing category for us, and we don't even advertise them," said Jim Jones, a buyer at Ingles Markets, Black Mountain, N.C.

"We find that the low-fat granola and bar snacks are definitely gaining in popularity in our market," said Patty Jones, buyer for Fleming Cos.' Northern California division, West Sacramento, Calif. "We have been increasing the number of granola items that we carry through the warehouse and manufacturers keep introducing new products."

"The bar snack category continues to grow, and we expect that there will be a lot of innovations in that category," said Ned Meara, corporate grocery merchandising manager at Grand Union Co., Wayne, N.J.

Meara and other retailers said they expect the category's positive momentum to continue. They also noted that sales are being spurred by a constant stream of new product offerings from leading manufacturers.

"Pop Secret is coming out with a popcorn bar. The whole category continues to grow as our society looks at healthy snacks," Meara said.

"The granola and cereal bars are definitely a growing segment for us, and they offer us good prices and margins that are better than cereals," said Robert Hanson, grocery buyer at Treasure Island Foods, Chicago.

"Taken as a whole, the granola category is both rapidly growing and innovative, and we find that the innovation is what fuels the growth," noted Emily G. Holdstein, senior vice president of Wonder Markets Cos., Worcester, Mass.

Jost of Harp's predicted that a new line of granola-type bar snacks featuring Oreo, Nutter Butter and Chips Ahoy flavors now being launched by Nabisco will really help fuel double-digit category growth.

Burger said Randalls began shipping the Nabisco line to its stores in mid-February.

"I have extremely high hopes for them," he said. "I think Nabisco will bring a current nonuser into the section and that will bode well for the entire category."

Scanning sales figures provided by Information Resources Inc., Chicago, show that for the most part the bar snack category is showing healthy growth. For the 52 weeks ended Nov. 6, 1994, nutritional snacks-granola bars had supermarket sales of $628.1 million, an increase of 16.1% over the same period the year before. Retailers told SN that a combination of heavy couponing and innovative television commercials is helping to drive growth of the category among many consumers.

"We find that the bar snack category lends itself to strong manufacturer commercial and coupon support," said Judy Payne, a spokeswoman for Schnuck Markets, St. Louis.

"There are a lot of coupons, a lot of coupons, especially in the Sunday paper. The brokers also do an awful lot of advertising with us in our combos and everything, so the category is backed up," said Ray Todd, a buyer with Hale-Halsell Co., a Tulsa, Okla.-based wholesaler and retailer servicing about 290 supermarkets and convenience stores.

Meara said Grand Union advertises such snacks on a regular basis.

"There are some tremendous names that are usually heavily advertised and couponed by the vendors, which we feel really helps the products. They are hitting the children's TV shows, which is a real important plus for the retailer because that type of advertising is driving sales too," he said.

While many of the bar snack items, particularly the fruit snacks, are targeted specifically at children, retailers said the category attracts a broader section of shoppers.

Holdstein said she thinks the category reaches four distinct segments of consumers: value-added kid, price-driven kid, all-family and adult consumer groups.

"When it comes to customers we find that the snack bars attract a little bit of everybody," said Mark Polsky, senior vice president of Magruder Inc., Rockville, Md.

"We find that these items tend to attract the upper-middle level demographic customer, and we don't find them to be a fad item. They are definitely here to stay," said Payne of Schnuck Markets.

"Those products just lend themselves to my demographics unbelievably," said Burger of Randalls, whose chain caters to a well-educated, middle- to upper-income customer.

"Kellogg's with their Nutri-Grain bars captured part of their Pop Tart audience that was looking for an alternative for themselves while they were buying Pop Tarts for the kids. But they didn't cannibalize Pop Tart sales. They brought in a new user," he said.

Jost of Harp's finds that the bar snacks attract "mostly upper- and upper-middle income families, with income above $40,000. It is a lot more of the health-conscious customer who is also going to buy granola bars and related items."

The category's diversity makes it a bit of a merchandising challenge. Retailers told SN that for the most part they merchandise the bar snacks in the cereal aisle, often near toaster pastries, like Pop Tarts. Most said they devote 8 to 12 feet to the segment.

"Our fruit and granola bar category is located across from the cereals in the same aisle. It does best when it is merchandised in a high-visibility area, because there is a certain amount of impulse purchases," said Holdstein of Wonder Markets.

"We looked at the category for possible expansion of the allocated shelf space, because it does continue to grow. We decided to maintain the same shelf space this year and probably go up next year," said Meara of Grand Union.

Randy Naeve, buyer at Fareway Stores, Boone, Iowa, said while bar snack sales are up in his chain, trying to fit all the new products on the shelf has caused some problems.

"There have been so many new items, and we certainly haven't taken all that have been presented to us. We haven't expanded the sections yet, but I think that will happen in the future," he said.