Balance Bar

Balance Bar
Product type Nutritional energy bar
Introduced 1992
Website Official Balance bar Website

Balance Bar, sometimes styled as balance bar, is the brand name of a nutritional energy bar based on the 40-30-30 dietary principle, that is, a diet containing 40% carbohydrate, 30% protein and 30% dietary fat. The 40-30-30 nutritional philosophy was popularized by Dr. Barry Sears, a biochemist, and later expounded in his Zone diet books.

The product was first released in 1992. Since that time, the product line has expanded to include Balance Bar, Balance Gold, Balance Trail Mix, Balance Plus, Balance CarbWell, Balance Gold Crunch, Balance Outdoor, Balance Organic, Balance 100 Calories, Balance Bare, and 40-30-30 Balance Drink Mix. Balance Bar is a subsidiary of NBTY.

Company history

Founding and early years

The Balance Bar Company was founded in 1992 by Thomas Davidson and Richard Lamb, a windsurfing champion, Olympic judge and sporting goods manufacturer[1] who would later go on to found New Sun Nutrition. Davidson, Lamb and two other investors acquired rights to a bar based on Sears' zone diet.[2] The company was originally called Bio Foods Inc. and was located in Santa Barbara, California. Balance Bars were originally sold through natural food stores, and were introduced into mainstream stores in 1997.[3]

Sears was originally to have partnered with Lamb, but backed out of the deal and formed a competing company to sell BioZone bars and other products through multi-level marketing. In 1995, Sears' bestselling book about his nutrition concepts, The Zone, was published. Around the same time, several other authors published books advocating high-protein diets[4] and the nutrition bar business started to take off. Balance Bar sales hit $1.3 million in 1995. In 1999, just four years later sales reached $100.9 million.[5]

Kraft acquisition

The company's speedy growth caught the attention of Kraft Foods, which purchased the company for $268 million ($19.40 per share) in January 2000 as part of a strategy to expand its product line to natural foods. Earlier that same week, Kraft had announced it would acquire Boca Burger. Kraft paid a 37% premium over Balance Bar's then-current trading price. Analysts cited Balance Bar's agreement to market a line of bars with weight loss firm Jenny Craig, Inc. as a factor that drove up the price. Another factor accounting for the premium may have been that Kraft's purchase was part of a rush by large food manufacturers such as General Mills, PepsiCo and the Adolph Coors Company to snap up well-established natural foods companies such as Cascadian Farm, Mother's Oatmeal and Blue Moon Beer respectively.[6] [7]

At the time, the deal was thought to be a winner for both sides, with Kraft picking up a well-established brand in a high-growth market category, and Balance Bar leveraging Kraft's resources for further growth.[8] However, Balance Bar was "not financially material" to Kraft, said a Kraft spokesman later said. In 2008, Kraft posted annual revenues of $42 billion.[9] Balance Bar posted revenues of $127 million, a 7% decline from the previous year. It slipped to third position in the category, with Clif Bar surpassing it in sales. Nestle's PowerBar held the top spot, with 2008 sales of $196 million[10] However, the company languished under Kraft, and in December 2009 was purchased for an undisclosed amount by private equity firm Brynwood Partners, a firm known for buying orphan brands from large companies.

Acquisition by NBTY

The sale was seen as part of a larger restructuring effort by Kraft CEO Irene Rosenfeld to sell underperforming brands and refocus on Kraft's core of dairy and pizza products.[11] It also reflected a recognition that the nutrition bar category had matured. Competition stiffened as over 500 new bars launched in 2004 and 2005. New product launches fell off significantly in the following years, as did interest in the high-protein diet fad. However, Balance Bar retained a very loyal customer following that was attractive to Brynwood, which said at the time of the sale that it planned to increase marketing and new product innovation.[12][13]

In 2012, NBTY acquired Balance bar.[14]

See also

References

  1. ↑ "Balance Bar Company". Funding Universe http://www.fundinguniverse.com/company-histories/Balance-Bar-Company-Company-History.html
  2. ↑ Fulmer, Melinda (January 22, 2000). "Kraft to Buy Balance Bar for $268 Million". Los Angeles Times http://articles.latimes.com/2000/jan/22/business/fi-56411
  3. ↑ Fulmer, Melinda (Jan. 22, 2000) "Kraft to Buy Balance Bar for $268 Million". Los Angeles Times. http://articles.latimes.com/2000/jan/22/business/fi-56411
  4. ↑ "Balance Bar Company". Funding Universe.http://www.fundinguniverse.com/company-histories/Balance-Bar-Company-Company-History.html
  5. ↑ "Kraft Foods to Acquire Balance Bar" (Jan. 21, 2000) Business Wirehttp://findarticles.com/p/articles/mi_m0EIN/is_2000_Jan_21/ai_58825542/
  6. ↑ Koo, Carolyn (Jan. 21, 2000). "Balance Bar Shares Surge on Kraft Takeover". TheStreet.comhttp://www.thestreet.com/story/866776/balance-bar-shares-surge-on-kraft-takeover.html
  7. ↑ Helliker, Kevin (June 7, 2002) "General Mills Goes Incognito to Sell Cereal That's Organic" The Wall Street Journal.http://www.mindfully.org/Food/General-Mills-Cascadian-Farms7jun02.htm
  8. ↑ Koo, Carolyn (Jan. 21, 2000). "Balance Bar Shares Surge on Kraft Takeover".http://www.thestreet.com/story/866776/balance-bar-shares-surge-on-kraft-takeover.html
  9. ↑ "Brynwood partners buys Balance Bar from Kraft Foods". (Dec. 5, 2009). TradingMarkets.comhttp://www.tradingmarkets.com/.site/news/Stock%20News/2702675/
  10. ↑ "Kraft Foods Sells Balance Bar After Years of Stagnant Sales". (Dec. 1, 2009). nutritionbusinessjournal.comhttp://nutritionbusinessjournal.com/healthy-foods/news/kraft-food-balance-bar-sales-decline-nbj/
  11. ↑ "Brynwood partners buys Balance Bar from Kraft Foods". (Dec. 5, 2009). tradingmarkets.comhttp://www.tradingmarkets.com/.site/news/Stock%20News/2702675/
  12. ↑ Stone, Mike (Dec. 4, 2009). "Kraft Foods sells Balance Bar as sector saturates". nutraingredients-usa.comhttp://www.nutraingredients-usa.com/Industry/Kraft-Foods-sells-Balance-Bar-as-sector-saturates
  13. ↑ 'http://www.healthy-diets.co'[]
  14. ↑ NBTY buys Balance Bar Company

External links

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