Jon,
I do not hold any shares of this stock, but I might offer some insights on their product as a result of personal experience, my background as a physician, and as a very serious bicycle racer. I have been exposed to this market on all the above levels since power bar was a startup with tiny ads in VeloNews.
1. Nutritionally speaking, these bars (and there are many of them) are a commodity. Each company likes to hype it's particular blend of fats/proteins/and carbohydrates and special ingredients that suppossedly will improve one's performance. What is not generally recognized is that many regular foods can be substituted for these 'energy bars' that have a similar nutrient mix. All these companies work hard to dispel this notion. During multipl Race Across Americas, my team ended up eating regular food preferentially because the 'energy bars' made us sick! In short, all these products may turn out to be a fad for athletes, but I doubt this based upon the premise that 'a sucker is born every minute' (see below)
2. Athletes are tremendous suckers for anything they believe will give them a little edge over the competition. We buy these bars based on the hype put out by marketing that tells us about anecdotes, inconclusive research, and heros that suggest that this is the food that will make us win. A few cents difference in price is not important. (I spend over 1000 dollars extra on a light bicycle frame that saves 1/2 pound even though I am at least 5 pounds overweight) The most successful companies in this field will be the ones that do the best marketing. It is as simple as that.
3. The hidden gem in this field is nutritional products for medical care. There are some legitimate uses for these products (mostly the powders and liquids) in this area. Contracts and margins are big. The bad news is that big corporatons are already well entrenched here and are actually expanding into the athletic food area (ensure).
4. In summary, what will sell is hype, marketing, name recognition. Costs only need to be in the ballpark. A successful foray into the medical field would be very positive. To the extent that Balance Bar can do this, it will be successful.
Regards, Dave |
