Post plans to revitalize PowerBar

By Elizabeth Crawford

- Last updated on GMT

Post plans to revitalize PowerBar

Related tags Powerbar New product development

Post Holdings hopes to return the long-neglected and aging PowerBar brand back to its former glory by revitalizing its marketing, branding and product innovation in 2015, according to company executives. 

PowerBar, which is accredited with creating the now vast and varied energy bar category, “is a great brand, but it has been neglected,”​ said Robert Vitale, president and CEO of Post, which closed the acquisition of the brand from Nestle in October.

Recognizing the iconic brand was a small part of Nestle’s portfolio that has coasted on its equity for several years, Vitale said during the firm’s first quarter earnings call Feb. 6 that “2015 will be an investment year for this brand with our efforts benefiting financial results in fiscal year 2016 and beyond.”

Specifically, Post plans to invest in new product development within the brand to bring it up to speed with the rest of the category and re-establish its relevance with today’s consumers.

“The brand hasn’t had much attention to the actual product form in recent years as the whole category has changed. It has stayed mostly a slab product with limited innovation,”​ Vitale said.

He said the company plans to “turn around the brand”​ by extending it “beyond the bar into different forms, like powders and shakes. So we think it needs to be proliferated.”

PowerBar already operates a bit in the powder sports drink category, but does not offer ready-to-drink shakes. It also sells some gels and liquid foods for performance athletes to eat quickly and under Nestle it marketed rehydration tablets that could be added to water.

The past year has seen some innovation in PowerBar’s bar segment. In April, the brand launched the Energize Wafer, which it touted as “a totally new concept to sports nutrition,”​ with a crunchy consistency that is easy to snap in two to eat while running or cycling. It also launched its Performance Energy Fruit and Nuts Bars.

Marketing update

Post also plans to “refresh”​ the brand’s marketing message, which for years has focused on helping athletes train and perform better during competition.

While Vitale did not say how the brand would be revitalized, marketing experts have previously suggested the brand needs to expand beyond athletes to reach out to health snackers and the meal replacement segment. (Read more HERE​.) 

This will be a big challenge for the brand given the intense competition in the category, which has new bars popping up ostensibly every week, an analyst with J.P. Morgan Securities noted during the firm’s quarterly earnings call.

Vitale agreed that expanding or “regaining”​ distribution lost in recent years to these competitors would be a challenge, but he is not too worried about it.

“The PowerBar acquisition is not predicated upon gaining distribution or regaining distribution. … It’s predicated upon holding and making more profitable the existing bar distribution,”​ Vitale said. “Obviously, distribution gains would be nice, but it’s not necessary for this investment to pay off and then extending into additional forms where there are more rapid growth opportunities.”

Given the extent of the investment necessary to revitalize the brand, Post does not expect PowerBar to contribute to its earnings until 2016.

Nonetheless, the firm is optimistic about its other brand and recent acquisitions buoying sales, which climbed 261.6% during the first quarter to $1.07 billion compared to the same time last year. The growth spurt mostly comes from acquisitions, including Dakota Growers Pasta Co., Golden Boy Foods and others. The most recent $1.15 billion acquisition of MOM Brands happened after the close of the quarter. (Read more about the acquisitions HERE​ and HERE​.) 

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