Industry and Competitive Analysis For The ENERGY BAR Market

Dynamics of New Ventures
Industry and Competitive Analysis

for ENERGY BAR
-Aadya Madan
2020ECO1103
1
WHAT IS AN ENERGY BAR?
Energy bars are supplemental bars containing

cereals and other high energy foods targeted at
people who require quick energy but do not have
time for a meal. Moreover, due to their healthy
content, these bars have become a common snack,
owing to the pro-healthy lifestyle.
Like all food, these bars are meant to enhance your

physical energy, nourish you, and give you that
protein kick along with a combination of fats,
carbohydrates, minerals and vitamins – all balanced
together to give you what they promise.
INDUSTRY OVERVIEW
India has emerged as one of the fastest growing economies in the world. As for the
snacking industry, it is the young generation, that forms up around 2/3rds of the
total population, which, owing to their rising incomes have created a growing
market. Even though, most people still prefer to opt for unpackaged food, the rise
of a global pandemic and the growing awareness towards healthy eating, has
stirred up some market trends.
Traditionally, India has been a country where taste used to overshadow all
nutritional and hygienic elements but recently, a survey conducted by IPSOS has
revealed that while 72% of participants were aware of the nutritional needs of
the body, 91% of Indians would like to explore healthier alternatives while
looking to ‘snack up’, thus giving better shape to the healthy snacking market.
In today's on-the-run society, where sitting down for a meal is sometimes an

impossible luxury, the emergence of nutrition bars may seem to be just what the
doctor ordered. Though these pocket-sized bars once found favor primarily with
serious athletes looking for a competitive edge, now anyone who feels the need
for a nutritional boost may keep a few stashed in a purse or a briefcase. The Indian
nutritional bars market stood at $ 9.4 million in 2018 and is projected to grow
at a CAGR of over 30%, to reach $ 46.2 million by 2024.
2
PORTER'S FIVE FORCES MODEL
1. THREAT OF NEW ENTRANTS
The threat of new entrants is any open market is always a viable option.
Talking about the energy bar industry, since the market is already starting
to see some well-established market leaders in India, the threat of new
entrants is minimal. The profitability is hugely dependent on the
distinguished product features such as taste, ingredients and overall
appeal, these factors have already been bookmarked by the existing
brand names and thus, reduce the threat of new entrants in the given
market.
An energy bar is not an easy product to manufacture, it requires a wide

variety of fats, proteins, carbohydrates, different levels of sugar
concentration, fibres, nuts and any other added flavours. Moreover, the
manufacture of a perfect consumer-friendly energy bar will also require
skilled technicians. Thus, the distribution channels and the supply chains of
the industry will be well-defined by now and hard to break into.
2. THREAT OF SUBSTITUTES
The Energy Bar Industry is highly susceptible to substitutes. The Indian
public has still not sold its heart to the energy bar segment and has a wide
variety of substitutes available. Some of the major ones being, chocolate
bars, low-priced energy drinks, and pro-health baked goods. Since the
price of energy bars is still way above what an average customer pays for a
chocolate bar, the taste of which is very well developed, the switch back to
the chocolate segments is possible. A large portion of the energy bar
demand comes from sportspersons, athletes, and gym freaks, who
consume an energy bar, mainly for the nutrition it provides. The same
group of people is likely to switch over to energy drinks, given that cost-
friendly variants of energy drinks are being rapidly introduced. Moreover,
the Indian market is very sensitive to taste, and the customers eating an
energy bar in order to maintain a healthy lifestyle, may switch over to the
seemingly attractive category of healthy foods such as chips and biscuits
being offered by various companies such as TooYum, MAX PROTEIN etc.
Thus, the threat of substitutes runs high.
3
3. RIVALRY AMONG EXISTING FIRMS
As it is said, the major determinant of industry

profitability is the level of competition among
existing firms. The Indian nutritional bars market is
controlled by these major players, namely - General
Mills India Private Limited, Naturell (India) Pvt. Ltd.,
Sun Hygiene Foods Pvt. Ltd, Sprout Life Foods
Private Ltd, among others.The most active
companies in the India energy bar market include
Unibic, Yoga Bar, General Mills, HealthKart and
Eat Anytime, which hold a significant market
share.
However, India has a fairly large number of energy

bar producers, as shown by the following table. The
Indian Market has around 15% more sellers of energy
bars than the United States of America. Despite a
large number of sellers, the industry is mostly
dominated by the three big players and is on the
brink of consolidation. With over 40 alternatives
available, the Indian energy bar market is growing
rapidly. But, most companies have targeted the
high-income segment with only a few
manufacturers focusing on economical alternatives.
YogaBar and RiteBIte being significant members of
the economical segment.
4
Manufacturers are incorporating measures to increase their product visibility in the
retail shelf, by expanding their distribution channel and adopting innovative marketing
strategies.
Some of the players have positioned and marketed specific bars with particular
ingredients/health benefits targeting a specific gender. This strategy of launching
target-oriented products gives the feeling of personalization to consumers, as they
could be specifically created for their needs.
RiteBite is the market leader in the entire granola bar/ nutrition bar market. For taking
the brand equity further, some of their marketing efforts to be put in for promoting the
brand are as follows: consumer awareness, approaching the influencers – like gym
trainers, dieticians, one-to-one approach with social media and website. Online
consumer programmes – Facebook, Blogs, Youtube, BTL activity, PR activity, events
and promotions. Their major target consumers for these nutrition bars have been
working professionals, weight watchers, fitness freaks, gym goers, people with busy
lifestyle, people on diet, in short people who are health conscious.
Yoga Bar, another major competitor has been a startup and has been able to achieve
unparalled heights in a short span of time. Their ingredients and their taste being the
unique selling proposition, Yoga Bar has witnessed a number of funding rounds and a
3x revenue growth in FY21.
Thus, tackling the rivalry and existing competition, with a number of new brand
launching day-by-day, but with the key ingredients and a solid USP, will be
manageable, given the forecasted growth and recent rise of the market.
4. BARGAINING POWER OF SUPPLIERS
The supplies required to produce and market Energy Bars are generic and
used in a great number of confectionary items, thus the suppliers are
bound to have an upper hand. Suppliers to the industry wish to capture as
much of the profit in the value chain as possible prices are generally
governed by international commodity markets, making most of these
companies a price taker. Even though the generic nature of the supplies
opens up a large market of suppliers, the suppliers have been in the
business for a long time and will expect control. The attractiveness of
substitutes is present, and so does the threat of forward integration.
5
5. BARGAINING POWER OF BUYERS
As we've heard, Consumer is king and in an industry that deals directly with
consumers by producing and marketing products that are Fast Moving
Consumer Goods, the influence of a customer/buyer automatically increases.
The industry firms, like any other firm, will seek to maximize returns but the
consumers will always look for the lowest price possible. In the case of energy
bars, the consumers, due to negligible effort involved in shifting from one brand
to another will enjoy a good bargaining power. The customers, consume energy
bars with the greatest taste and the cheapest price, are highly influenced by
marketing strategies and thus are ultimately, the king of the market.
6
COMPARITIVE ANALYSIS

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Dynamics of New Ventures

Industry and Competitive Analysis

Energy bars are supplemental bars containing

Like all food, these bars are meant to enhance your

In today's on-the-run society, where sitting down for a meal is sometimes an

An energy bar is not an easy product to manufacture, it requires a wide

As it is said, the major determinant of industry

However, India has a fairly large number of energy

4. BARGAINING POWER OF SUPPLIERS

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