Analysis of Emerging Protein Bar Market in Australia

The report analyses the growing protein bar market in Australia using Porter's Five Forces Framework. It discusses the size and profitability of the industry, target consumers, and major players. The report recommends innovation and fixed pricing to expand the market. It also discusses the opportunities and threats in the market.

FOOD MARKETING

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Executive Summary
The aim of this report is to analyse the emerging protein bar market. Protein Bar is growing
continuously, it can be said that the protein bars sale can be increased in the next five years.
Customers are the main component of the market because they are the reason of high
competition in the market. The data is collected from the authentic websites, articles and
books. With the help of porters five framework, it is observed that the health conscious
consumers are the target consumer for the protein bar market. From the analysis, it is
recommended that the innovation helps to increase the awareness of the product in the
market. Fixed prices can reduce the bargaining power of the buyer. Innovation and fixed
price are the methods that help to expand the market in large area. From the analysis, it has
been seen that the protein market will grow fast in the next five years.

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Contents
Introduction....................................................................................................................4
Description of the Industry.............................................................................................4
Porter’s Five Forces Framework....................................................................................5
The threat of new entrant............................................................................................5
Bargaining power of suppliers....................................................................................5
Bargaining power of Buyer........................................................................................5
Substitute of product...................................................................................................6
The intensity of the competitive rivalry.....................................................................6
Recommendation............................................................................................................6
Conclusion......................................................................................................................7
References......................................................................................................................7

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Introduction
With the changes in the food industry, the protein bar is developing in the market and it
develops in the market by using the market strategies(Becker, 2017). There are many tools to
analyse the challenges and opportunities of the industry. Porter’s five forces Framework used
to analyse the threat and opportunity of the growing market of protein bars. In this report,
protein bars market is taken into the consideration to analysis the market whether it will have
a strong position in future or not. In the starting of the report, size and profitability of the
industry discussed. After that, Porter's five forces have been taken to evaluate the external
environment of the product.
Description of the Industry
Protein bars is the developing market of Australia. It has the creative packaging of carbon
boxes and aluminium foils that attracts the customers. Protein bars have allergen and gluten-
free content that increase the demand of the protein bar. For maintaining the general wellness,
consumers prefer to a protein bar for the health. In the present days, people becoming more
conscious for their health that is the reason for developing the protein bars market of
Australia. Protein Bar market of Australia is growing at the rate of CAGR 6%. Kellogg
Company, General Mills, MARS Abbott Nutrition, the balance bar, Hormel Foods,
Musclepharm, and others are the protein bars firms in the Australia market (Becker, 2017).
Each brand of a protein bar is highly innovated with the unique qualities, which makes the
strong brand name. Due to increasing the awareness among the consumers, the demand for
the protein bars increasing. The purchasing power of the consumer is the main factor in
increasing the demand for protein bars in Australia. Consumers of the protein bars are
addicted to this healthy product (Haskelberg et al., 2016).

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(Source: Techsci Research, 2013)
Porter’s Five Forces Framework
The threat of new entrant
It has been analysed that the protein bar has a high threat of new entrants just because of the
low capital investments cost required in the market. There are many new entrants into the
market which discouraged the product. There are fewer barriers to entry in the market. It is
observed that the nutrition section of any grocery stores is increasing day by day. Nowadays,
T h r e a t o f n e w e n t r a n t s - H ig h T h r e a t
L o w c o s t r e q u ir e m e t
B a r g a in in g p o w e r o f B u y e r s - L o w P o w e r
L e s s m a n u fa c t u r in g fi r m s
B a r g a in in g P o w e r o f S u p p lie r - L o w p o w e r
L a c k o f R a w m a t e r ia l
T h e in t e n s it y p o w e r o f c o m p e ti ti v e r iv a lr y - H ig h t h r e a t o f c o m p e ti t o r
S u b s ti t u e s - H ig h t h r e a t o f s u b s ti t u t e

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people are more conscious about their health that is why they prefer protein bars. The protein
bars industry reached the peak of its growth because the majority of consumers are more
interested in cost than quality. Other industries can easily enter into the market and some
have already done. Many brands sell their own protein bars at a fraction of the cost. There are
many competitors can enter into the market with new recipes that can easily be created, the
result of the creation is the same as protein bars. Government regulation is the only barrier
that can discourage the competitors to enter the market. During the past years, FDA has been
particular claim the protein and nutrient companies products for the weight. The overall risk
of entry of potential competitors is high due to low capital requirements (Indiatsy et al.,
2014).
Bargaining power of suppliers
It has been evaluated that the protein bars industry has the low bargaining power of buyers
because the majority of raw material of the protein bar comes from the various third parties.
Protein bars have very common ingredients that can easily available. New industries come
with the new recipes thus the suppliers also increase which decrease the bargaining power of
suppliers. It has several alternative suppliers from which it can purchase the raw material.
Suppliers have a large risk of losing the customer thus the suppliers sell their products at the
reasonable price to attract the industry toward their services. There are many manufacturing
companies enter into this industry from the other countries, it is a risk for the existing
suppliers. It can be said that the bargaining power of suppliers is low which is beneficial for
the protein bars industry. The new suppliers may overtake the market share with lower prices
that increase the bargaining power of suppliers.
Bargaining power of Buyer
It has been analysed that the customer bargaining power is low. Due to many reasons, the
bargaining power of the buyer is low. The demand of the consumer is increasing among the

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consumers; it is good for the sports athletes. Protein bars are also bought by that person who
wants to take the meal without any trouble. The reason to owing to the product is weight
management, increasing energy, and improved muscle mass. There is less supplier of protein
bars thus the industry buyers have low bargaining power. In the case of a large number of
suppliers, the consumer has much option to buy the product as per their demand and budget.
However, in this industry, the number of the suppliers is less thus the consumer has fewer
options to buy the product they have to buy the product at the higher prices because of less
option. Nowadays, people are more conscious for their health and believe in the quality
instead of cost. Buyers of the product are increases but the supplier of the industry is in less
number, which decreases the bargaining power of the supplier. Some customers believe in
quality instead of cost thus the buyer takes to shakes instead of protein bars that is less
expensive (Porter, and Heppelmann, 2014).
Substitute of product
It has been seen that the industry has a high threat of substitute. Protein bars face a numerous
selection of substitute products. Sports nutrition, weight management pills, protein drinks,
water or milk and even regular meals can replace the protein bars. Some people avoid bars
because they believe it is not healthy for the health thus they buy milk or herbal shake instead
of bars. Sportsperson also prefers energy drinks during the games instead of protein bars. The
customer of the protein bars take the energy drinks, milk and shake for their health because
they believe that protein bars are similar with chocolate (Meena, Singh, Panjagari, and Arora,
2017). The industry can lose their customer because of the substitute product. Protein bars
industry has a high threat of substitute.

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The intensity of the competitive rivalry
In the present situation, it has been seen that the competition level of the market is high and
strong. The industry faces many challenges just because of competitors. There are many
competitors of protein bars in the food industry such as herbal life shakes, energy drinks,
Milk, and others. It has been observed that the consumers are more conscious about their
health which has a positive impact on the food industry. Competitors of the industry use new
recipes to attract the customer towards their product. Competitor sells their product at the
higher prices with the high quality from which the customer believes in the quality.
In the present days, it is observed that the competition level of the healthy products is high
due to increasing the demand of the healthy product (Oltman, Lopetcharat, Bastian, and
Drake, 2015).
Opportunity and Threat
Opportunity
It has been analysed that the protein bar market has the opportunity to expand the market in
the large area due to increasing the demand of the protein bar. People becoming more
conscious for their health that increases the opportunity of growth of the market (Opitz,
Chaudhri, and Wang, 2018).
Growth of the
marketOpportunity
New entrants
Losing customersThreat

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Threat
It has been evaluated that the protein bar market has high threat of new entrants because of
less cost required. It also has a threat, by increasing the competitors it has a threat of losing
the customer (Pandey, 2018).
Recommendation
With the increasing consumption of the protein bars, the competition level is high.
Competition in the food industry increases the bargaining power of buyer that is not
beneficial for the market. Firms should fix the selling price of the product to reduce the
bargaining power of buyer or earn more revenue. It provides the health and fresh quality
product to the consumers because healthier and fresh product makes a strong positioning in
the market. Innovation should also adopt by the market for attracting the customer and add
new flavour for making a sale (Xie, et al., 2017).

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Conclusion
From the above analysis, it has been concluding that the Protein bar industry is growing day
by day due to the spreading health awareness among the consumers. Health conscious
consumers are the main drivers for the industry. With the growing industry, the
manufacturing firm of a protein bar is increasing which was a threat for the existing firms. It
is observed that the new companies enter into the market, increases the bargaining power of
the buyer as well as the bargaining power of the supplier. Energy drinks or nutrient shakes
are the competitors for the protein bars as well as substitute products of the protein bars.
Innovation and creativity attract the customer toward the protein bars. Protein bar should add
the new flavours and provide the services at the reasonable prices for expanding the market.

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References
Becker, G. S. (2017). Economic theory. Oxon: Routledge.
Haskelberg, H., Neal, B., Dunford, E., Flood, V., Rangan, A., Thomas, B., Cleanthous, X.,
Trevena, H., Zheng, J. M., Louie, J. C. Y. and Gill, T. (2016) High variation in manufacturer-
declared serving size of packaged discretionary foods in Australia. British Journal of
Nutrition, 115(10), pp. 1810-1818.
Indiatsy, C. M., Mwangi, M. S., Mandere, E. N., Bichanga, J. M. and George, G. E. (2014)
The application of Porter’s five forces model on organization performance: A case of
cooperative bank of Kenya Ltd. European Journal of Business and Management, 6(16), pp.
75-85.
Meena, G. S., Singh, A. K., Panjagari, N. R. and Arora, S. (2017) Milk protein concentrates:
opportunities and challenges. Journal of food science and technology, 54(10), pp. 3010-3024.
Oltman, A. E., Lopetcharat, K., Bastian, E. and Drake, M. A. (2015) Identifying key
attributes for protein beverages. Journal of food science, 80(6), pp. S1383-S1390.
Opitz, M., Chaudhri, V. and Wang, Y. (2018) Employee social-mediated crisis
communication as opportunity or threat?. Corporate Communications: An International
Journal, 23(1), pp. 66-83.
Pandey, M. (2018) The opportunity-threat theory of decision-making under risk. Judgment
and Decision Making, 13(1), p.33.
Porter, M. E. and Heppelmann, J. E. (2014) How smart, connected products are transforming
competition. Harvard business review, 92(11), pp. 64-88.

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Techsci Research. (2013) Report Description. [online] Available from:
https://www.techsciresearch.com/report/australia-protein-supplements-market/1702.html
[Accessed 5/08/18].
Xie, Q., Jiang, X., Gan, L., Yang, P. and Meng, X. (2017) Quality improvement of high-
protein nutrition bars during storage by pre-coating of protein with coconut oil. Journal of
Food Safety and Quality, 8(5), pp. 1811-1816.
Rawat, N., and Darappa, I. (2015) Effect of ingredients on rheological, nutritional and quality
characteristics of fibre and protein enriched baked energy bars. Journal of food science and
technology, 52(5), pp. 3006-3013.