GHQ: Catering to Kids

By Suzanne Vita Palazzo
Through special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.
While there has been no shortage of media attention devoted to the rising obesity rates plaguing Americans, many people have overlooked a key segment within this dangerously overweight demographic – the nation’s children. According to a study recently released by Information Resources, Inc. (IRI) entitled Healthy Kids Report: Understanding the Role of Better-for-You Products in Kid-Driven Food and Beverage Categories, 50 percent of children in the United States will be overweight by 2010.
“The magnitude of how big this is really struck me,” said Sean Seitzinger, vice president and leader of the center for retail innovation at IRI.
The escalating child obesity rate has spurred the need for a market that offers kid-friendly products that can assist parents in their struggle to maintain their children’s weight at healthy levels.
Insiders say the grocery industry is not responding to this consumer need with enough speed and efficiency to meet the demand. “If there were a prize for the market segment most overlooked by food marketers, the winner, without a doubt, would be adolescents,” said Dr. Richard J. George, professor of food marketing at St. Joseph’s University.
If there is a shortage of kid-themed wellness products, it may be ending. According to the IRI study, better-for-you products have grown a total of 31 percent across kid-driven categories, versus just 7 percent across mainstream products.
Enter the opportunity for retailers to become resources for consumers, all the while boosting their bottom lines. With increased media attention and legislation banning some products from school lunches, parents are not only more aware of healthy options for their kids, they appear willing to trade up for an item that is perceived as a better-for-you option.
Experts concur that an untapped opportunity exists with private label wellness products for kids. “In general, about 95 percent of the time, private label is lacking in this solution area,” said Mr. Seitzinger. “So for retailers that really want to innovate, I think there’s an opportunity for them to let their premium branded solutions in private label help define what the answer is, and not just because it’s a good thing to do, but because it’s an economically good thing to do.”
Regardless of the approach, observers agree that retailers have the chance to gain incremental sales and customer loyalty by making children’s health a priority, a seemingly simple step that many have so far failed to take. Said Mr. Seitzinger: “I think real leadership in this space is really about retailers either driving manufacturers to be more effective in how they innovate as a community, or to step up and deliver on their own from a private label perspective.”
Discussion Questions: Do you agree that retailers, particularly grocers, have failed to make children’s health a marketing priority? Where do you see
opportunities for retailers to succeed in the area of child health and nutrition?
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10 Comments on "GHQ: Catering to Kids"
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Great comments from Bernice — as usual. Problems with childhood obesity started in earnest when we started selling them stuff, mostly sugar/salt-drenched and empty, and convinced them that they would feel better if they could get their hands on it.
Should we now start selling them products that are better for them? If that product is an apple, then fine! But we should be aware that a lot of “wellness” products currently aimed at adults have dubious health benefits and a similar approach to children will not do much for their health either.
Ben raises a good point (many good ones, actually) – can we sell healthier foods? We’ve been researching new products that are good for you for years. Want to guess why they are not on the shelves? People don’t really want to buy them (purchase intent is high – actual purchase is low). It’s not the retailer’s responsibility to make this happen, it’s the manufacturer’s job to (a) make healthy products people want and (b) show the retailer why they should carry the products. I don’t think retailers will argue that healthy products are a good idea – they just need more and more desirable products to sell.
I would concur that retailers have failed to make children’s wellness products a priority, and that it is unquestionably an untapped opportunity to sell products so positioned. Certainly we should not ignore such an opportunity as a “for profit” industry.
However, it is difficult to address this issue without asking one question. What were kids eating BEFORE they started becoming obese in such large numbers? Could it simply have been less food? More of the healthier foods available then (and now)? Maybe the were eating the same foods but in combination with more of the popular calorie antidote (still available I believe) called exercise?
Can we sell parents products that are healthier alternatives to current offerings? Sure. Should we? Sure. Is the fact that we have not done so to date the reason our children are obese? Not hardly.
Kids got overweight from staying indoors instead of playing outside and being active. Sure, they eat junk food as do all Americans. Kids 20 years (and more) ago were playing hard and burning calories even while eating some junk. When little league season was going on we could convince our parents that we needed Gatorade and other specialty foods. I remember honey being the big deal with wrestlers in high school which is probably the most weight watching any high school boy ever did while trying to make the weight class he wanted to wrestle in.
I see small town grocers still promoting little league but not so much in the cities. Of course parents have to promote the activities too and if they do not then probably the best opportunities for grocers are to promote new, healthier foods to kids. But, I believe, that will just be marketing and not really do much about the obesity problem in kids. Plus a healthy, active child is probably more profitable than a chubby, calorie reduced one.
Supermarkets are exquisitely sensitive to sales trends. The single variable every supermarket manager and executive examines every day, more often than any other, with no exceptions, is sales. If good-for-you foods for kids or anyone else sell well, everyone in the supermarket industry will know immediately. No delays. No fog.
There’s no question that most retailers have underplayed the importance of children’s health in their marketing, and supermarkets are no exception.
Stepping back, this is somewhat surprising in an era when many people think in terms of “investment grade children.”
Having a chance to see the pre-publication results of the Prevention Magazine/FMI 2006 Shopping for Health study, it’s evident that from the shopper point of view, children and children’s health is a big deal. Anyone interested will want to see that study when it’s published in the next month or so. (Feel free to contact me for more information.)
In terms of opportunity, it seems to me that one of the most immediate opportunities relates to what food retailers can do to satisfy the need for healthy portable snacks for kids up to and including a healthy, brown-bagged lunch.
This will be one of the big areas of emphasis in the next year or two based on what shoppers are telling us.
Not just foods, but a whole program including exercise, meetings, publications and website. Not just pre packaged lines either. The products have to work together and the intent has to be honest. Good customers will be buying less food as time passes.