To put the market for kids' food and beverage in context, it is estimated that retail sales of all food and beverages in the U.S. will reach $639 billion with kids' food and beverages accounting for roughly 3.5% of sales. In 2013, total value of kids' food and beverage is estimated to be worth $23.2 billion.
While the kids' market can be quite complex, this report has focused on seven core food and beverage categories in which marketers have a strong tendency to target kids: dairy products, snacks, frozen food, beverages, cereal, shelf-stable meals, and produce.
Importantly, growth of kids' food and beverage appears to be outpacing that of the total market, up 4.4% from 2012-2013 compared to 2.9% of traditional food and beverages in the same categories. This is why makers and marketers of packaged goods are turning to America's youngest consumers to boost sales. Moreover, the kids' food market is still in its infancy - providing additional incentive for players to innovate new product lines that can be adapted to kids' needs and desires.
However, marketing kids' food and beverages can be a tricky business. While kids' food and beverages are targeting the child user, companies and brands must first gain acceptance by the purchaser - the parent. Obtaining parent approval is most often achieved through healthy brand positioning and socially responsible efforts. The Millennial parent - who likes to have products tailored specifically for them - emerges as a willing consumer when it comes to products that are made specifically for kids. Millennial moms are identified as an important target for industry players to consider when developing social media marketing strategies.
Innovation in kids' food and beverage products is largely accomplished through formulation, packaging, and marketing. Formulation is a key component for innovation of any food or beverage designed for kids. Kid-friendly formulations leverage color, shape and size to appeal to kids' senses without pushing the taste boundaries too far beyond the familiar. Additionally, new formulations of kids' foods often strive to meet nutritional requirements to appease parents. Packaging trends tap into three key attributes - convenience; portion control; and playability.
Finally, industry players must tread carefully when targeting kids. Public health professionals concerned about the unhealthy diets and lifestyles that lead to childhood obesity have identified food marketing to children as playing a key role in this national crisis.
The report projects sales of kids' food and beverage will grow to a value of $29.8 billion by 2018, driven by continued economic recovery, strong new product development, and increased demand for health and wellness products suitable for growing kids.
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