The market research firm, which predicts 40 percent growth in sales of products targeting two-to-12-year-olds in the period 2010-2015, said that despite a brief hiatus during the recession, manufacturers were now looking at the 43m kids in this age bracket in earnest.
With one in every three children now overweight or obese and politicians, the media and parents alike looking for someone to blame, the food industry had an opportunity to re-take the initiative and come up with healthier products that were appealing to children, said Packaged Facts.
“We forecast that the next several years going into 2015 will mark a period of tremendous growth in the sales and development of food and beverage products marketed and designed for children.”
40 percent of products have ‘better-for-you’ focus
To date, the most activity has been in single-serve juice packs, fruit snacks, microwaveable meals, yogurts and frozen meals, with the (ill-defined) term ‘natural’ featuring strongly, along with ‘organic’ and claims about the absence of artificial colors, flavors and preservatives or the addition of calcium or vitamins, said the report.
While the bulk of packaged retail products targeting kids (a $10bn market in 2010) were in ‘traditional’ categories such as cereals and ice cream, 40 percent had some better-for-you element, with claims such as ‘made with whole wheat’ or ‘lower sugar’, it noted.
“Even most fruit chews/gummies now sport a ‘contains 100% of the Daily Value for vitamin C’ claim, while about a half of aseptic juice/fruit drinks are now described as lower sugar."
However, the biggest segment – with sales of more than $2bn – remained frozen foods where fat and sugar-rich ice cream novelties still dominated. Beverages came in second (lunchbox drinks), followed by dairy products (dominated by yogurts).
Get them while they are young
As for the marketing, the challenge was to appeal to kids and parents at the same time, said Packaged Facts.
“Marketers’ greatest concern used to be the gatekeeper, who ultimately made the decision to purchase a product. But today, the little foodies of the world expect more from what they are being served … more in terms of presentation, taste, and quality.
“Many kids have become quite food savvy as a result of watching TV cooking shows with their foodie parents and being exposed to new foods while traveling and eating out. This has created opportunities and challenges for developers and marketers, as kids have become more willing to explore new foods, but more discriminating when it comes to food selection."
From a strategic point of view, it also made business sense to target today’s kids – tomorrow’s main purchasers – notes the report. “Life-long dietary habits are established during this 10-year age span, and brand loyalty begins.”
According to Datamonitor, there were 773 new stock-keeping-units targeting kids introduced to the US food retail market in the period January 2005 through December 2010, with launch numbers peaking in 2007, then dropping off in 2008 and 2009, but picking up again in 2010.