Mega trends influencing kids food, beverage product development

Have you ever wondered how much influence kids have on their parents’ grocery purchases? The answer is a lot, and I know this from experience. In fact, 43% of households with children spend in excess of $150 each week on groceries, compared to 16.1% of households without kids, according to a new report from Packaged Facts.

According to the “Kids Food and Beverage Market in the U.S., 8th Edition" report, for the U.S. retail food sector, the children aren’t just the future, they are very much the present. Parents may earn the money to make necessary household purchases, but more often than not when it comes to grocery shopping parents acquiesce to the demands and preferences of their children. Whether its brand of cereal, candy, soda, and anything beyond or in between, it’s clear that kids as much as word of mouth from other parents, advertisements, or the internet influence consumer awareness of food and beverage products. In fact, 26% of parents learn about a new product as a request from their child.

Kids age 6 years and older are a particularly important demographic to marketers. Life-long dietary habits are established during this time period and brand loyalty begins. This suggests industry players should focus on product development designed to capture younger kids and gain allegiance from parents earlier to keep them involved with the brand throughout childhood and beyond.

“It’s the circle of retail life. 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," said David Sprinkle, research director, Packaged Facts.

Developing products that effectively appeal to children is more difficult than it sounds. The kids’ food and beverage market is particularly challenging because industry players have to market to both the end users (the child) and the purchaser (the parent). To that end, understanding trends and factors that influence kids’ food purchases can provide industry players with strategies to better position their company and brands within the market.

The report identified three mega trends that have and will continue to shape the market for foods created for and marketed to children:

(1) The generational influence of the Millennial parent

In 2015, Millennial parents accounted for 42% of all households with children, making them an important segment of the parenting demographic. Additionally, this group will likely continue to represent a growing share of households with children because the Millennial generation spans nearly two decades—some are still in school and dependent on their parents and have not yet reached the childrearing stage.

Millennials also comprise a larger share of lower-income households. On the surface, this would imply that Millennials are on strict budgets and that affordability is a significant purchase decision influence. While this may be true, it’s also important to consider the Millennial mindset toward spending: Millennials are willing to spend extra for perceived higher quality products and services. Notably, they value transparency, authenticity, and brands that represent them and their lifestyles. For example, Millennial moms tend to place importance on foods that are natural and do not contain artificial ingredients. Healthier, yet affordable, foods are very important to these parents. Simply put, they don’t want to compromise the nutritional value of the foods they buy, especially for their children.

(2) Multicultural child population continues to grow

Race/ethnicity is an important consideration for kids’ food and beverage makers and marketers. Some 28% of white households have children living in the home, which translates to about 24.9 million households. However, some 50% of Hispanic households have children living in the home, followed by 44 percent 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.

Targeting the multicultural parent requires marketers leverage strategies in order to appeal to traditional cultural values: advertising in Spanish is an obvious example of this approach to better communicating with Hispanic parents. Marketers should also understand family values of the multicultural consumer; for example, extended families (such as grandparents, aunts, and uncles) can also be tapped as potential additional purchasers for kids’ food and beverage.

(3) Focus on kids’ nutrition through the stealth health and real food movements

Over the past 20 years, the prevalence of obesity has risen not only among adults but children as well. Forward thinking makers and marketers will continue to serve as advocates of kids’ health and take necessary action to improve the nutrition and health profile of foods and beverages marketed toward kids, with improved market performance as their reward. One way industry players are providing healthier kid-friendly food and beverage products is through the stealth health movement, which helps parents to increase kids’ fruit and veggie intake while still retaining kid appeal. The stealth health premise is that by hiding servings of fruits and veggies in kid-friendly foods like pastas, pizzas, breads, smoothies and desserts, that kids will more easily meet daily nutrition requirements. The trend has emerged in product development in nearly every market segment of kids’ food and beverages.

Beyond stealth health, better-for-you kids’ food and beverage also is being tapped through the real food movement. The real food concept incorporates health, animal welfare, social justice and environmental sustainability—buzzwords that fit under this umbrella are “clean," “local," “green," or “slow," as well as “fair" and “organic."