Three trends shaping children's food industry

by Monica Watrous
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Organic fruit snacks for kids - Annie's, Clif
Organic claims may be particularly important for product categories such as fruit snacks, which penetrate high in households with children.

ROCKVILLE, MD. — Forget millennials. Marketers should start paying attention to 6-year-olds, according to a new report from Packaged Facts, a Rockville-based market research firm. That’s because lifelong dietary habits and brand loyalty are established during early childhood, Packaged Facts said.

David Sprinkle, Packaged Facts
David Sprinkle, research director of Packaged Facts

“It’s the circle of retail life,” explained David Sprinkle, research director of Packaged Facts. “Child demands product, parent learns about product through child, household begins using product, child ideally grows up to encourage his or her own household to use said product — at least until their own kids start making requests.”

Developing products for children is particularly challenging because companies must appeal to both the buyer and the end consumer — the parent and child, respectively. More than a fourth of parents learn about a new product as a request by their children, Packaged Facts said. When shopping for children’s food and beverage products, nutrition tops the list for nearly half of parents. Other factors driving purchasing decisions include convenience, pricing, flexibility in usage occasion and packaging.

Children's natural products - Ians kids meal, GoGo Squeez applesauce
Millennial moms prefer to buy foods for their children that are perceived as natural with no artificial ingredients.

Three mega trends are shaping the children’s food industry, according to Packaged Facts. First, industry players must consider the generational influence of the millennial parent on the children’s food and beverage market. Accounting for 42% of all households with children last year, millennial moms and dads are expected to represent an even larger portion of the parent population for years to come. Although millennials make up a large share of lower-income households, this consumer group is more likely to pay more for products that appeal to their values of transparency, authenticity and quality. Specifically, millennial moms prefer to buy foods that are perceived as natural with no artificial ingredients, Packaged Facts noted.

A second consideration for manufacturers and marketers is race or ethnicity.

“Some 28% of white households have children living in the home, which translates to about 24.9 million households,” Packaged Facts said. “However, some 50% of Hispanic households have children living in the home, followed by 44% of black households and 40% of Asian households. For industry players, this means targeting households across the cultural spectrum is one way to hone marketing efforts to ensure reach of a high concentration of families.”

Multicultural group of children
Manufacturers must consider race and ethnicity and how to target households across the cultural spectrum.

Advertising in Spanish is one way in which marketers may communicate with Hispanic parents. Beyond that, companies should understand family values of multicultural consumers, such as extended families who also may be purchasing children’s food and beverage products.

A third influence on the children’s food and beverage industry is an increased focus on nutrition through stealth health and real food movements. In response to the rising prevalence of obesity in recent years, many food companies are reducing sugar and sneaking fruit and vegetable servings into child-friendly products such as pastas, pizzas, bread, smoothies and desserts. And then there’s the “real food” idea, bolstered by such buzzwords as “clean,” “local” and “organic.” Such attributes may be particularly important for product categories such as ready-to-eat cereal and fruit snacks, which penetrate high in households with children.
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