Package as product definer
Bike shops and runners' stores are outside typical food distribution networks, but energy drinks, nutrition bars and other diet supplements are a growing presence at those retailers' checkout counters. Red Bull and Balance Bar are examples that have made the transition to mainstream distribution, and the next product type to bridge the gap may be energy gel.
Generically referred to as "goo," energy gels surfaced in the early 1990s in Berkeley, CA, still home to the three largest manufacturers: Clif Bar Inc., PowerBar and Sports Street Marketing, maker of GU energy gel. Not only did it lend its name, Sports Street created the bottle-shaped polyfoil package that defines the category. The shape suggests a water bottle, a nod to the electrolytes and simple sugars in the gels. The gel is mostly complex carbohydrates that don't require much digestion before delivering energy to on-the-go athletes.
So pervasive is the bottle shape that gel makers who have tried different packaging quickly retreated to the familiar look. "We were in an applesauce cup when we came out with Carb-BOOM," recalls John M. Cooney, CEO and co-founder of Tucson, AZ-based Sunburst Nutrition Inc. "Polyfoil pouches with a tapered opening to pour the gel right into your mouth was a much more sophisticated package."Sustainability is a rallying cry for many gel makers, and some offer anti-litter solutions. Clif Bar introduced the "litter leash" a few years ago to keep the easy-tear opening together with the pouch. "You see a lot of litter after a large triathlon, and the litter leash was an improvement made to address litter concerns," says Clif Bar Spokesman Peter Berridge. Carb-BOOM switched to a pouch two years after launch. More recently, the firm installed a form/fill/seal machine in a 10,000-sq.-ft. facility and began production. "To get into manufacturing, you have to be gluttons for pain," Cooney jokes. "It's been a tough learning curve, but we did it out of necessity to compete with the leaders in a growing market."
A division of Nestle SA, PowerBar benefits from its parents deep promotional pockets. "We sponsor 5,000 athletes in events like the New York City Marathon," says Arnau. Lance Armstrong squeezed a dozen packets of caffeinated PowerBar Gel down his gullet in one stage of last year's Tour de France. But Kraft Foods' Balance Bar subsidiary is a nonstarter in the gel segment, and PepsiCo's ReLoad gel from Gatorade was withdrawn a few years ago. "They sell product by the pallet; they weren't used to selling by the case," says Cooney.
Small is beautiful from an entrepreneur's perspective, and energy gels are still a small segment dominated by entrepreneurial companies. As it comes into its own, look for more product and package refinements of the kind Nestle is introducing.