School of Management and Entrepreneurship

Marketing Strategy
(MKT631)
MBA 2019-21

Energy Bars Case Analysis 2

SUBMITTED BY:
GROUP - 5
Ritika Sharma (1910120028)
Ashutosh Choudhary (1910120007)
Anuj Yadav (1910120163)
Atul Mishra (1910120135)
Mayank Sharma (1910120021)
Morvi Dhawan (1910120022)
 CASE ANALYSIS 2 (MARKET ATTRACTIVENESS)

Factors underlying Market Attractiveness (Ref. Exhibit 6.8):

1. Customer needs and behaviour

They went on to say that this half of the population had specific vitamin and supplement
requirements, which the energy bar industry had yet to identify or meet—a classic case of
unmet needs. As a result, they launched Luna as the first nutritional (rather than energy) bar
for women, leveraging media and advertising targeted at active women. The bar had a thin,
crunchy texture and contained nearly two dozen vitamins, minerals, and nutrients in flavours
like "lemon zest" and "chai tea." The target market consisted of time-strapped women who
appreciated both taste and wellness and would benefit from a bar designed specifically for
them.

Rating: 9; Weight: 50%

 Justification - Unmet needs for first nutritional bar (Luna) launched for Women have
been identified and are well understood.

2. Market segment size and growth rate

With net sales of $ 2.6 billion in 2017, and an expected growth rate of 34% of the energy bar
segment, the industry is on the way to grow at a tremendous rate.

Increasing health-consciousness, active lifestyles, and awareness about the benefits of

Increasing sports participation and the increasing gym-going population are expected to
further propel the growth of energy bars.

Consumer demand for convenient and healthy on-the-go snack options has by-far been the
primary attribute for sales of energy bars in the country.

Assuming the annual growth rate which is forecasted to be between 32 to 37% in the coming
years, let’s take a mid-point of around 34%. Going by this annual growth rate for energy bar
 market and taking 2017 as the base year in 2021, the net sales of energy bar will be $ 8.38
Billion, while in 2025 it will reach $27 Billion.

The price of an energy bar is given to be from $1 to $3.5, let us take the average value of this
price range, which comes out to be $2.25. Here we are assuming that the increase in the price
of energy bars in the years to follow will be negligible, or sol less to not have much effect on
our calculations. In short, we are not factoring in the hike in the average price of energy bar.

Taking the average price of an energy bar to be $2.25, dividing the net sales of each year by
the average price we get the expected number of units sold in each of the subsequent years.

Year 2017 2018 2019 2020 2021 2022 2023 2024 2025

Revenue (in
Billions) 2.6 3.48 4.67 6.26 8.38 11.23 15.05 20.17 27.03

Units Sold 1.16 1.55 2.08 2.78 3.73 4.99 6.69 8.96 12.01

It gives 1.15 billion energy bars sold in the year 2017, 3.7 billion energy bars sold in the year
2021 and a little over 12 billion energy bars sold in the year 2025.

Market growth- Weight 30% - Rating 7

 Justification - Market is growing at 34% annually and the revenue increase will high,
however there will competition from other segments of snack bars as well especially
organic energy bars, which may impact the annual revenue share of energy bars.
3. Macro trends:
a. Demographic: The consumption of Kind energy bars is higher between 18
and 40 years compared to those above 40 years of age. It targets both males
and females. The United States is the world's largest market for convenience
foods, and developing markets in Asia-Pacific, the Middle East, and Latin
America are expected to expand in the future. The Kind energy bar company
now sells more than 20 million bars a month at 80,000 locations throughout
the country, including 2,000 in the region. Consumption of the bars grew by
more than 100 percent last year. If lined up all the Kind bars sold nationally at
Whole Foods Markets last year, they would stretch from New York to
Chicago.
b. Sociocultural: Changes in social and economic trends, as well as increased
food and beverage spending, knowledge of nutritious foods, changes in meal
patterns and current food habits, and the urge to try new items, are all driving
up demand for convenience foods globally. Due to their hectic lifestyles, on-
the-go snacking is becoming increasingly common, especially among
working-class people, teenage children, people living in hostels, and
bachelors. Furthermore, the idea of on-the-go snacking is closely linked to the
ease with which energy bars can be consumed and treated. As a result, the
demand for energy bars is growing as a result of the associated convenience of
use, to improve energy, supported by disposable packaging that prevents the
bars from coming into contact with hands, keeping them clean to function at
the same time. Kind energy bars provides all the above convenience to the
people with the variants as per their need of consumption. Kind energy bars
comes in different flavours, shapes, and sizes like nut bars, thins, minis,
energy bars, protein bars, fruit bars, granola bars, breakfast bars, kids’ bars, etc
to name a few.
c. Natural: Kind energy bars contained natural as well as artificial contents.
Following are the contents of the energy bar: Whole grain blend (oats, brown
rice, millet, oat flour, buckwheat, amaranth, quinoa), tapioca syrup, dried cane
syrup, honey, canola oil, coconut, chocolate liquor, sugar, brown rice syrup,
molasses, gum acacia, sea salt, vanilla extract, cocoa butter, soy lecithin,
Vitamin E (to maintain freshness).
 Weight: 50%; Rating: 8

 Justification: Identifying and fulfilling customer needs is the primary task of any
company and for that first proper segmentation is required. KIND bars had identified
the demographic and sociocultural factors accurately and were successful in targeting
their market segments. Even after increase in price the sales were more than 100%
every next year.

Overall Assessment of Energy Bar’s Market Attractiveness (Ref. Exhibit

Market attractiveness factors Weight Rating (0-10 scale)

Customer needs and behaviour 0.5 9

Segment size and growth rate 0.3 7

Macro trends 0.5 8

 What happens when I eat an energy bar? (2012, May 24). Winners Sports Nutrition -
Eat Natural, Be Active!. https://winnersbars.com.au/what-happens-when-i-eat-an-
energy-bar/
 Energy bar market and segmentation. (2017, March
5). https://peruvianentrepreneur.wordpress.com/2017/02/25/market-segmentation-
and-energy-bars/
 Energy bar market size, share & trends | Industry forecast, 2019-2026. (n.d.). Allied
Market Research. https://www.alliedmarketresearch.com/energy-bar-market
 Energy bar market size, shares, trends, opportunities & forecast. (2021, February 1).
Verified Market Research. https://www.verifiedmarketresearch.com/product/energy-
bar-market/
 Marketing analysis on the energy bar industry. (n.d.). Studypoolwork
Help. https://www.studypool.com/discuss/4494818/Marketing-analysis-on-the-
energy-bar-industry
 Energy Bar Market - Growth | Trends  | Forecast (2021 - 2026)
(mordorintelligence.com)