The U.S. snack bar market is booming.
Sprinting toward a projected 21% retail growth in 2025, consumers crave convenience, flavor, variety, and functional benefits according to bakery industry experts. With that surge comes a tidal wave of innovation — allowing for 15 to 20 new snack bar brands to emerge monthly, particularly across direct-to-consumer (DTC) and retail channels according to reports by Benchmark DTC and Innova Market Insights.
Yet, for all the prosperity, the space remains increasingly segmented, with five dominant niches — energy performance, high-protein and low-sugar, clean-label, functional and biohacking, and keto/paleo bars — leading the way according to a 2025 report by Innova Market Insights. The snack bar market trends report also revealed Gen Z and millennial buyers are driving convergence between functional and clean-label trends, favoring bars that clearly promote energy, gut health and mental performance.
In a crowded, fast-moving landscape, standing out isn’t just about what’s inside the wrapper — it’s also about how it gets there.
The Co-Packer Crutch: A Common Shortcut
Regardless of their niche, purpose or positioning, most emerging snack bar brands share one key trait: they rely on third-party manufacturers to handle packaging and production. It’s a shortcut born out of necessity — many startups lack the facilities, technical expertise, or capital to build out manufacturing in-house. Contracting with co-packers allows them to get to market quickly and compete for shelf space.
Snack Bar Packaging’s Third-Party Problem
On the surface, outsourcing to a co-packer seems like a logical move — especially for young snack bar brands without the capital to build out full-scale production. A custom packaging line and supporting infrastructure can require millions in upfront investment, making it financially out of reach for most startups.
Instead, these companies rent production time on someone else’s line, using the co-packer’s equipment, labor, and expertise to get their bars on shelves.
But it’s a trap. That convenience comes at a premium.
Under this arrangement, producers aren’t just paying for materials — they’re also paying for someone else’s overhead, labor, margin, and availability, none of which they control. This means less flexibility, slower responsiveness, and thinner margins over time.
For a brand producing just 100,000 bars a year, outsourcing may seem low-risk — but those added costs compound fast and can become a long-term drag on profitability.
While they avoid owning equipment or managing production staff, they also lose visibility into the very processes that shape your product’s quality, efficiency, and scalability. In short, what gets their operations off the ground may quietly hold them back as demand grows.
Let’s look at an example of an annual cost estimate (100,000 bars with co-packing):
In contrast, producing in-house could reduce unit costs to $1.00–$1.20, depending on process efficiency and equipment. That’s a potential savings of $0.80–$1.00+ per bar — a margin shift that adds up fast as volume grows.
Third Party Problems Beyond Cost
Going beyond cost, relying on a third-party packager demands a high level of trust — and puts key aspects of a brand’s performance in someone else’s hands. While it may feel like a necessary trade-off early on, it can quietly undermine long-term growth in a number of ways:
- Packaging Throughput: Speed is dictated by someone else’s schedule. Mid-size co-packers run at 60–200 bars per minute, larger ones up to 500 — but you can’t control delays, changeovers, or seasonal capacity limits.
- Labor Limitations: Most co-packers rely on manual labor. You can’t upgrade to automation, scale staffing, or adapt processes on your timeline.
- Equipment Inefficiency & Quality Risks: Shared machines mean lower Overall Equipment Effectiveness (OEE) (as low as 40–60%), and more seal failures, mislabeling, and product recalls.
A Smarter Approach: Packaging That Fits Your Product & Process
Ouch. So, what’s the smarter approach?
Taking control of your snack bar packaging doesn’t have to mean millions in upfront investment. The smarter approach is to build your packaging operation around your product format and production goals — starting small and scaling strategically.
Snack bars are manufactured in several common formats:
- Molded bars
- Slab & slit bars
- Enrobed bars
- Single-lane or hand-fed options
Each production method influences how bars are presented to packaging equipment.
For example, manual or semi-auto lines can run at 20–60 products per minute (ppm), while horizontal flow wrappers scale up to 300, and high-speed multi-lane systems can exceed 800 ppm.
By aligning your packaging system with how your bars are made and how fast you want to scale, you unlock more control, more efficiency, and better margins. The right system doesn’t just wrap bars — it wraps around your business strategy.
Owning the Process. Owning the Line.
Then does it make sense to own your own equipment?
Yes.
Owning your custom packaging line gives you full control over production, quality, and profitability — without the premium price tag of outsourcing. By investing in snack bar packaging automation (which is necessary for many stages), you eliminate the need for large manual labor teams and enable continuous production with automated feeding, flow wrapping, and scalable options for cartoning and palletizing.
Smart producers start small, then expand as demand grows. Unlike third-party manufacturers, your line runs 100% for your product, 300 days a year, maximizing efficiency and output.
The result? Better margins, improved quality, and a process you can refine — not just rent.
Reaping ROI of Total Line Control & Snack Bar Packaging Automation
Investing in your own automated packaging operation doesn’t simply give you control and eliminate outsourcing’s price tag. It delivers measurable advantages across almost EVERY key area of production:
- Product Quality: Integrated equipment allows for smart sensors, vision inspection, and precise sealing — ensuring every bar is consistent, cleanly wrapped, and shelf-ready with fewer quality issues or recalls.
- Profit Margins: Automation improves efficiency, cuts waste, and eliminates co-packing fees — raising your per-bar margin and keeping more revenue in-house.
- Product Volumes: A dedicated line means production runs on your schedule, not your co-packer’s. You can scale output as demand increases without negotiating for line time.
- Equipment Capacities: Systems like the FR 400 Twin can exceed 800 ppm, outperforming many co-packing setups — without the labor demands of high-volume shifts.
- Product Throughput: High-speed flow wrapping paired with upstream and downstream snack bar packaging automation unlocks continuous, scalable throughput that supports fast growth and reliable fulfillment.
- Spatial Requirements: Modern packaging systems deliver high output in a compact footprint — often eliminating the need to buy or build new space while maximizing your existing facility’s layout.
Control the Outcome by Controlling the Process
In a rapidly growing and competitive snack bar market, how you package your product is just as important as what’s inside. While co-packers may offer a quick start, they can quietly erode your margins, flexibility, and brand control.
By investing in your own automated packaging operation — even in stages with value-added automation — you take ownership of your product’s quality, efficiency, and future.
Start small, scale smart, and let snack bar packaging automation do the heavy lifting. When your line works for you full-time, so does your ROI.