Like many other nutrition bar/snack brands, Quest – which was founded by Tom Bilyeu, Ron Penna, and Mike Osborn in 2010, sold to Simply Good Foods Co in 2019, and generated $127m in net revenues in the latest quarter – suffered in the early weeks of the pandemic as traffic at c-stores, gyms, and other ‘on the go’ channels fell off a cliff, Zink told FoodNavigator-USA.
“People were eating at home versus on the go, and a lot of our products are very much positioned for on the go convenience.”
However, looking at how some fans were consuming Quest bars at home helped the team identify some opportunities to keep Quest top of mind when they were no longer frequenting gyms or commuting, said Zink, while the brand also worked hard to build its e-commerce business and engage with consumers online.
“We have a group of consumers we call the Quest squad that’s about 7,000-strong, and one thing some of them were telling us they were doing was putting our bars in the microwave; you throw them in for 15 or 20 seconds and eat them with a spoon or a fork and it really elevates the taste and the texture.
“So we positioned the bars as a better for you at-home snack. Better than grabbing a carb loaded bagel or something else, and that really helped our original bar business. We also learned that people were opening up our chip bags and adding them to tacos with lettuce and salsa.”
Net revenues at Quest Nutrition were up 45.7% to $127.1m in Q3
In recent weeks, Quest has experienced a resurgence in bricks and mortar channels as consumers have emerged tentatively from their homes, although with the Delta variant raging, there is no room for complacency, she said: “With some restrictions being lifted, consumers are getting out and about again, and they're returning in some cases to a more ‘normal’ daily routine.
“Our numbers have outpaced the category and we're very, very happy with our results ," she said. Net revenues at Quest rose +45.7% to $127.1m in three months to May 31, 2021.
As for the product mix, she said, “a couple of years ago, bars were 80% of the business, whereas right now they are around 60%, with the balance being made up by some of the new forms we've introduced, specifically chips and cookies.
“What we've learned is consumers really want variety. So, we want to make sure we have those products that they're looking for when they go to grab a chip or a cookie that's not so healthy.”
Channels and e-commerce
From a channel perspective, meanwhile, e-commerce sales now account for around 20% of Quest’s overall sales, said Zink. “It really helped us through COVID, as we were already very well established online, so rather than going into their local store, people were able to order our products online very easily.
“We have a very strong presence across multiple online platforms including Amazon, and we have a subscription business that’s offered through our direct-to-consumer site as well as other platforms.”
A steady shift to mainstream consumers
As to what consumers are looking for from bars and other snacks, she said, “the idea of higher protein, lower sugar, lower carb snacks, is here to stay. I remember 10 years ago people were asking me if it was a fad. It's not a fad.”
Protein bars, meanwhile, are reaching a far wider set of consumers, she said: “A decade ago, it was still a lot about bodybuilders and gym rats. But what we've seen is a steady shift to mainstream consumers who just want to eat better, satisfy their hunger, and get a good source of protein.
“This consumer is interested in consuming optimal levels of protein combined with lower sugar and lower net carbs; a lot of consumers really look at that ratio.”
‘So many people have reinvented themselves during the pandemic’
For Quest specifically, she said, “We've got a core consumer that has been with us since Quest was established and we always keep them in mind when we're developing new products and when we're messaging. But we’ve definitely evolved our approach, it really is a mindset that we're targeting.”
That said, the brand does skew a little bit female, she said, while from a demographic perspective, she said, “We are a millennial and Gen X brand, but we’re really going after that healthier mindset.
“There are also people that have what we call a millennial mindset. So many people have reinvented themselves during the pandemic, whether it's career wise, or health-wise, and they're making changes, so we want to be there to support them during that journey.”
‘Quest is very much focused on complete dairy-based protein’
When it comes to macronutrients, she claimed, “consumers are looking for different levels of protein depending on the occasion, so if someone is eating a bar as a meal replacement, they're going to want more protein than for a between meal snack. They’re thinking, how does this fit into the context of my entire day?”
Within the Quest bar portfolio, therefore, the core protein bars contain 20-21 grams of protein, snack bars have 10 grams, and hero bars – which have a different texture and offer “a very different eating experience than our original bar,” - have 16 grams of protein, she said.
While many brands in the set have launched plant-based protein options to tap into the trend, Quest is not planning to follow suit, she said. “We think there are great companies out there for consumers who are looking for plant-based options, Quest is very much focused on complete dairy-based protein.”
Nutrition: Quest's top-selling 60g bar (Chocolate Chip Cookie Dough) has 200 calories, 21g protein, 14g fiber, 1g sugar, and 4g net carbs.
Ingredients: Protein blend (milk protein isolate, whey protein isolate), soluble corn fiber, almonds, water, unsweetened chocolate, erythritol, natural flavors, cocoa butter, <2% sea salt, sunflower lecithin, stevia, sucralose
‘Fiber may be one of the most underrated superfoods out there’
On sugars, she said, “generally what they'll say to us is we want it as low as possible. Fiber is also important because people look at net carbs [which they calculate by subtracting fiber from total carbs], but also because people are finally beginning to understand that fiber may be one of the most underrated superfoods out there in terms of what it can do for health.”
While consumers generally tell market researchers the more ‘natural’ the better when it comes to sweeteners, they also want products that taste good and deliver very low amounts of sugar, and using ‘artificial’ sweetener sucralose (which Quest uses in its core range) has not proved a deal breaker, she said. “It’s a trade-off consumers are willing to make.”
Quest was also one of the first brands to use ‘sweetener of the moment’ allulose, before the FDA said it no longer had to be listed as added or total sugar on the Nutrition Facts label, she said.
“We actually educated the consumer on it when it was still listed as a sugar, so we were very happy with the FDA’s ruling, because it just made it simpler and easier for consumers to make choices.”
The ‘bewildering’ nutrition bar aisle: ‘I always refer to it as a sea of bars…’
When it comes to the nutrition bar set in stores, the category has become increasingly confusing for consumers, who are now presented with a bewildering array of products that on the face of it might look much the same, but may have very different macronutrient profiles, she said.
“I always refer to it as a sea of bars. When I visit stores, I sometimes see consumers just standing there, trying to figure it out. It’s been complicated for quite a while, and it's a category with low barriers to entry, so there's a lot of churn, and there's always a new flavor, there's always a new product out there, but a lot don't last very long.
“So we're very focused on working with retailers on making sure that consumers can see at a glance what it is, what the flavor is, and what the macronutrients are, and then with our retailers, it’s about helping them understand how consumers make choices in the category, what are they looking at first?”
Aside from flavor, she said, “Our consumers are looking at protein, sugar, and carbs. It’s confusing when you try a new bar and then realize it has 20 grams of sugar, but you thought it was good for you because it was next to a lower sugar bar.”
‘We're looking at those pain points, so when consumers start looking for ways to lower their sugar intake or carb intake, they have an option’
Quest protein chips, cookies, and candies, meanwhile, are performing well, said Zink. “We are very pleased with the rollout of our peanut butter cups and candy bites which are perfect when you have a craving and want something sweet [without consuming a ton of sugar or calories], so we’re working with some retailers to get our products to the checkout lane, because right now, most of the options are not great for you.”
While Quest’s move into the pizza category might seem like an odd move, it’s a logical adjacency for the brand, which wants to play in categories that are traditionally carb-heavy by offering something with a more appealing macronutrient profile, claimed Zink, who said Quest has an innovation pipeline spanning multiple categories.
“We're looking at those pain points, so when consumers start looking for ways to lower their sugar and carb intake, they have an option. What do consumers [seeking to reduce carbs] miss? Cereal? Absolutely. Granola? Absolutely.”
‘Shakes is one area where we're a little challenged…’
But not everything the Quest brand has touched has turned to CPG gold, acknowledged Zink.
“Shakes is one area where we're a little challenged. They haven’t done as well as we had hoped, and the reason we believe, is that the category already had a very established product base that met the macronutrient profile, so Quest wasn't flipping the macros and bringing anything really different to the table here.
“However, we do have some very loyal consumers, so we have no plans to withdraw this product and we’ll continue to keep that out there for the consumers who love it.”