There’s no escaping nutrition bars. From the grocery store to Amazon, there’s a seemingly endless number of shelves to shop and never-ending pages to scroll offering the snack equivalent of a healthy lifestyle... whatever that means.
Given the sheer number of bars and the countless varieties, it may not come as a surprise to learn that the global nutrition bar market was valued at $5.1B in 2017. What is surprising, however, is the origin of the nutrition bar.
Space Food Sticks—a nutrition bar for astronauts created by Pillsbury in the 1960s—were the predecessor to the modern day energy bar. Later, Pillsbury went on to file for a trademark on “non-frozen balanced energy snacks” ahead of marketing Space Food Sticks to the public. Although their space-inspired efforts never quite caught on, the concept of a convenient, nutritionally balanced meal/snack stuck.
Although, General Mills, not Pillsbury, is thought to be the originator of the mainstream bar category. In the 1970s, when General Mills noticed that people were eating its Natural Valley Granola cereal as a snack, it created a crunchy granola bar under the same name.
Forty years later, General Mills is still a force in the bar category, with sales exceeding $749M in the 52-week period that ended Oct. 7. But granola bars were just the beginning. Over time, General Mills built out its portfolio of bars through acquisition—snapping up Fiber One, Cascadian Farm, LÄRABAR, and Epic—while creating the Big Food blueprint in the process: if you can’t beat ’em, buy ’em.
|What’s Next For Nutrition Bars? →
The future of the nutrition bar market—a segment that includes muscle-building protein bars, as well as weight loss and energy bars—is being shaped by upstarts and acquisitions. In recent years, General Mills spent $100M to acquire Epic, Kellogg’s paid $600M for RXBAR, and last month, PepsiCo scooped up plant-based bar maker Health Warrior.
At the same time, two privately held companies by the name of Clif Bar (who walked away from a $120M buyout offer from Quaker Oats in 2000) and Kind Healthy Snacks (for which Mars, makers of Snickers and M&M’s, is an investor) continue to accelerate with more than $800M and $700M in annual sales, respectively. Photo: Alex Lau
|Peloton Pulls Ahead of SoulCycle →
In the battle between boutique studios and at-home options, Peloton appears to be pulling ahead of SoulCycle. According to debit and credit card data from Second Measure, Peloton has more than doubled its active memberships since Q3 2017. SoulCycle, however, lost 10% of its active customers during the same period (of note, a spokesperson for SoulCycle strongly disputed the claim).
Peloton also seems to be presenting an issue for competitors beyond the boutique studio. The company reports their retention rate of 96%, a number that is substantially higher than that of high-end gym Equinox, where only 35% of members return after the first year.
While there have been whispers about a boutique fitness bubble, as well as some concerns over the growing number of startups hoping to become the Netflix of Fitness, this data—as reported by Recode—gives us a point of reference that goes beyond the anecdotal sense that streaming, connected, and on-demand startups are disrupting the space.
|The Goop Affect →
When it comes to wellness, consumers go crazy for advice from celebrities, even though they’re clearly not experts. Enter: Gwyneth Paltrow’s Goop empire — the quintessential example of celebrity-driven pseudoscience. Despite widespread criticism and litigation, the company, which is valued at more than $250M, is reportedly working on a wellness-themed series for Netflix. All the more reason for Paltrow to keep doing what she’s doing.
Directly or indirectly, Goop’s success is inspiring other celebs to follow Paltrow’s lead. From Oprah and the Kardashians to Tom Brady and even Tim McGraw, the list of famous folks hoping to capitalize on the wellness craze is long and growing. Just last week, that list expanded to include LeBron James, Arnold Schwarzenegger, and Cindy Crawford, who launched Ladders, a DTC supplement company. Although the launch had its critics, the company’s star power is seemingly too big to fail. After all, stardom, not science, is the unfair advantage of celebrity-inspired wellness.
Kraft Heinz Company scooped up Primal Kitchen, reportedly paying $200M for the maker of paleo-friendly condiments and salad dressings.
After bootstrapping since 2013, Freeletics—an app offering fitness content and AI-powered training plans—announced a $45M funding round featuring a host of big-name investors, co-led by FitLab, Causeway Media Partners, and JAZZ Venture Partners. Courtside Ventures, Elysian Park Ventures, and ward.ventures also participated in the round, along with the San Francisco 49ers and the Boston Celtics.
Selling itself as a minimalist, design-forward toothbrush must be working for quip. The subscription-based, oral health startup just landed a $40M investment — bringing their total funding to more than $60M.
With $1.9M in pre-Series A funding, Feedr—a food tech startup delivering healthy and personalized meals to office workers—will grow its sales force and expand deliveries beyond London.
Keyto, a startup that helps people adhere to a ketogenic diet, landed $2.5M in seed funding and also launched an Indiegogo campaign for its breath analyzer and smartphone app that’s already raised more than $200K (420% more than its $50K goal) with 23 days remaining in the campaign.
On a recent episode of Shark Tank, VADE Nutrition, makers of dissolvable protein pod that eliminates the need for a plastic scoop, received a $700K cash infusion from Mark Cuban and Alex Rodriguez. Later in the same episode, the keto cookie company Nui won over A-Rod who—in keeping with his focus on health and wellness companies—made a $300K investment.
Bright Health, a Minneapolis-based insurance company providing individuals with exclusive Care Partner health plans, raised $200M in Series C funding, bringing their combined fundraising efforts to $440M across three rounds.
Hail Mary — Should Chipotle buy the newly-minted unicorn Sweetgreen? Probably, definitely, yes.
Want to get in touch? Just reply to this email with tips, questions, or to continue the conversation.