The Global Protein Bar Industry Booms With Nearly $3 Billion Clif Bar Acquisition
With the demand for on-the-go, better-for-you snack bar options continuing to increase, the global protein bar market is predicted to register a Compound Annual Growth Rate (CAGR) of 5.34% for the forecast period of 2022 - 2027. And considering the recent news that multinational snack titan, Mondelez International, Inc., will be acquiring protein and energy bar giant, Clif Bar, the industry looks to be well on track to meet or exceed this value.
In June, Mondelez announced its decision to purchase Clif Bar brand for a massive $2.9 billion, with the potential for additional earnout, as announced in a recent press release. The acquisition will also include Clif Bar’s other well-known brands, Clif Kid and Luna. The main motivator behind this significant deal is Clif’s global range, reputation, and potential to solidify Mondelez as a leader in the traditional nutrition bar market.
The Chicago-based multinational food, beverage, and snack food company is known for countless popular brands, like Oreo, Ritz, and Triscuit, making them a mainstay on kitchen counters across the globe. Since 2018, the company has managed to close 9 major deals as part of an acquisition spree that gained them over $2.8 billion in revenue. Among these deals was Mondelez’s first foray into the protein bar industry with the purchase of a majority stake in the popular nutrition snack brand, Perfect Snacks. Now with Clif Bar under its belt, Mondelez will be taking a large step toward becoming a leader in the fast-growing snack segment to achieve higher long-term growth.
Launched in 1992 by Gary Erickson, Clif Bar has been a brand focused on pushing the envelope in flavor and ingredient innovation that has pushed the protein bar industry to become a lucrative segment in the nutrition and health foods market. Mondelez plans to allow Clif Bar to continue to operate and innovate from its existing headquarters and is looking forward to obtaining a more substantial presence in the US market by expanding Clif's existing distribution.
"Mondelez International is the right partner at the right time to support Clif in our next chapter of growth,” says CEO of Clif Bar, Sally Grimes. “Our purposes and cultures are aligned and being a part of a global snacking company with broad product offerings can help accelerate our growth…”
What This Means For The Protein Bar Industry
This deal is undoubtedly momentous for Mondelez and Clif Bar, as both have become household names in the grocery market segment individually, and the partnership will only enhance their capabilities. But furthermore, this deal is key to the short and long-term potential for the protein and snack bar brands to scale and grow.
When Clif Bar first came into the picture in the 1990s, the protein bar market was a very different proposition. There was a limited variety present in the brands and products available to consumers and the general awareness of protein and energy-boosting snacks in the CPG space was minimal. Nutrition bars focused almost exclusively on the raw numbers and benefits, meaning that flavor and texture were often lacking. Since then, the industry has come a long way to be more mindful of consumer tastes, behaviors, and wellbeing. Especially during the COVID-19 pandemic, consumers sought out on-the-go, healthy snacks that could boost immunity, help with weight management, and promote healthier lifestyles. Protein and nutrition bars fit right into this growing demand.
Though Mondelez and Clif Bar are nowhere near becoming obsolete in the CPG space, there is a major opportunity for protein and snack bar entrepreneurs to gain market share following this investment. As other large CPG and nutrition food corporations take notice of the segment's increasing potential, the demand for food visionaries with innovative healthy snack ingredients and product types will open up new avenues for important partnerships.
Protein bars are seeing a historical moment of growth, and we can expect further advancements and investments in the industry in the years to come. Small bar brands will benefit greatly from the success of major protein bar brands in the CPG space and should be agile with their innovation and experimentation of protein products and snacks. With the global snack bar market expected to be worth nearly $32 billion by 2025, sales and opportunities will only continue to go up from here.
The Mondelez-Clif Bar deal will close in the third quarter of 2022 with expected organic net revenue to increase by over 4% within the year. Understanding how both the physical and online market will change as a result of this acquisition will be crucial for other bar brands to boost market share and increase prospects in an industry where protein bars have a more significant impact each day.
We understand that many small details that go into perfecting a protein bar brand in this new landscape. Consider collaborating with a certified manufacturer and co-packer that can align with your expectations, scale with demand, and provide industry-leading services. Protein bars are here to stay, and this year will play a key role in how industries adapt to the coming changes within the global protein bar industry.