Prepared Foods- July 2008

new product trends Kraft Foods’ line of South Beach Diet breakfast bars has had a name change, and this is after bringing in $65 million in sales. The brand’s well-advertised line of products, along with its balanced approach to weight loss, makes it appealing to consumers. 83 (or 27%) of the new snack/cereal/energy bars introduced in 2007 feature fruit as a key ingredient; many promise to fulfill two or more of the recommended five to seven daily servings of fruits and vegetables. Consumers have an opinion about which bars count as better-for-you. In today’s wellness-driven market, cereal bars with a nutrition profile perceived to be overly similar to candy bars and cookies are in decline. According to IRI InfoScan data, MasterFoods’ Kudos brand experienced a loss of 39% at FDM from 2004-2006. This kid-friendly brand is well-known for its addition of M&M's milk chocolate and Snickers candy bar pieces. At the same time, brands with less-indulgent flavor profiles and a focus on better nutrition (like Barbara’s Bakery Nature’s Choice and Kashi) benefited from the quest for healthier snacks. Not only are brands with healthy positioning increasing in sales, but they are also growing the category, as shoppers reach for them in place of cookies, candy bars and other highfat, high-sugar snack items. New product trends in the bar market reflect consumer desire for organic products. For example, while organic products accounted for just 8% of new bars introduced in 2004, they made up 44% of new bars in 2007 (as per Mintel’s GNPD). Furthermore, sales for these products are increasing much faster than average. In fact, Mintel’s “Organic Foods—U.S., October 2007” report found that organic food sales generally rose 132% from 2002-2007, to $4.2 billion. Although sales for organic cereal bars do not pose a strong threat to sales of conventional products, more new products on the market and greater demand by consumers are leading to wider retail distribution. Traditional grocery stores and general merchandisers are carrying a much wider selection of organic products. Since these products usually cost more than conventional bars, increased sales can only contribute to faster growth of the cereal bar market. The 2005 food pyramid updates inspired Americans to add more fruit to their diets. This and the challenge that some consider bars to be over-processed or filled with nutritionally questionable ingredients, like high-fructose corn syrup, are moving manufacturers to increase the number of bars sweetened with fruit or that are entirely fruitbased bars. According to GNPD, Market Trends: Granola Bars Granola bar sales increased 20%, to $746 million from 2005-2007, in conjunction with an increase in market penetration. Part of the attraction for cereal bars is due to the wide array of tastes and textures, like chewy or crunchy; sweet and salty; or coated and uncoated. To their credit, much of the variety comes from inherently healthy ingredients like fruit, nuts, oats and yogurt adding to the appeal. Increasing whole-grain consumption is another FDA recommendation affecting new products introduced into the bar market. Food manufacturers across various food categories Fast-selling Bars FDM Sales of Cereal Bars, by Type, 2005 and 2007 Sales 2005 ($ Millions) 2005 Share % Sales 2007 (est.)* ($ Millions) 2007 Share % Change % Sales of granola and cereal bars grew by 11% between 2005-2007. Granola bars made up the largest segment of the FDM market, enjoying an increase of 20% between 2005-2007. Growth is being driven primarily by consumers looking for healthier snacks for themselves and their children. Granola bars Breakfast bars Total 621 560 1,181 52.6 47.4 100.0 746 565 1,311 56.9 43.1 100.0 20.1 0.9 11.0 * 52 weeks ending March 25, 2007 Figures do not include Wal-Mart; data may not equal totals, due to rounding Source: Based on Information Resources Inc. InfoScan® Reviews Information/Mintel 16 July 2008 ● www.PreparedFoods.com http://www.PreparedFoods.com

Table of Contents Feed for the Digital Edition of Prepared Foods- July 2008

Prepared Foods- July 2008 Table of Contents Hitting the Shelves Category Analysis: Cereal Bars MarketWatch Modern Mediterranean Cuisine On the National Menu Stabilizers in Foods Beverages: Drinking It Up Protein and Aging R&D Applications: Chia Seed Nutraceutical R&D Applications: Navigating Flavor Trends R&D Applications: Ancient Whole Grains Abstracts

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