As kids head back to school, dairy managers have their own assignment - keeping an eye on which new items will make the grade.
A plethora of yogurt products, pudding and gelatin snack packs, many with startling colors and eye-catching packaging, hits the market every year in time to fit into back-to-school plans. This year is no exception. Retailers told SN they rotate some older, slower-moving products out for a while to make room for promising newcomers.
The seasonal juggling presents a challenge for retailers because refrigerated space is limited.
"We rotate the new products in and out," said Tom Clasen, director of operations of nine-unit Knowlan's/Festival Foods, Minneapolis. "After the promotional period, they sink or swim. Demand drives it. We do have a robust category management program and one of the big considerations is whether a particular product needs more space."
Typically, Festival stores have 84 to 112 linear feet of dairy cases, including 24 feet of yogurt, but not counting milk and eggs. The retailer has set aside just 8 feet for pudding snack packs, but that could change.
"Pudding gives us a higher ring than yogurt, but both categories are very competitive on price," he said, adding the margin taken is relatively small.
Just as it's been for the last couple of years, the majority of the new products comes with added health attributes. Some of the newcomers include puddings and yogurts with less sugar and less fat, and sugar-free gelatins made with fresh fruit juice.
Clasen has made room in the already burgeoning yogurt section for Yoplait Kids yogurt, made with 25% less sugar. "We're giving them five facings, three varieties," he said.
Retailers with smaller stores have smaller dairy
cases, and that makes merchandising new items especially challenging.
"We have to do a lot of rotating, because we don't have much space," said Scott Barth, dairy manager at single-unit Thorpe SuperValu, a Thorpe, Wis.-based store with less than 40,000 square feet of selling space. The dairy case runs from 36 to 40 feet.
Still, Barth made space for four or five new, sugar-free puddings this year.
At Lebanon, Ky.-based Higdon's Foodtown, demand for healthful items isn't strong, but store owner Jimmy Higdon predicted it's only a matter of time before demand picks up.
The store has set space aside for some new Jell-O pudding snack packs.
"Pudding is a growth category for us," Higdon said. "I wish I had 12 more feet. I'd feature puddings right now, but with only 48 feet of dairy case and a lot of Hispanic products, space is scarce. Just at the time school starts, migrant workers come back for the tobacco harvest here so we stock a lot of Hispanic items. Our big spike in dairy this time of year is in eggs and tortillas."
Refrigerated puddings are a growing category. Dollar sales in supermarkets were up 8.3% for the 52 weeks ending July 15, 2006, according to ACNielsen's data. The puddings had gained last year, too, after a slump in 2004, the data showed.
Industry watchers noted the recent growth could be driven by the introduction of more single-serve packaging and greater variety.
New healthy versions of familiar products and interesting flavors have undoubtedly fueled the growth. In fact, Jell-O's Sundae Toppers, introduced more than a year ago, are showing double-digit growth in supermarkets, according to Information Resources Inc., Chicago.
"The Sundae Toppers do well for us," Barth said. "They were new last year. We kept them. Those are the kinds of things that go."
This year, the Jell-O brand has added two more healthy puddings in snack packs. They're sugar-free, have reduced calories and come in creamy caramel and double chocolate, which are new flavors.
At the same time, retailers are jumping on the bandwagon with their own private-label puddings, most with healthy attributes, and some in snack packs. Publix Super Markets, Lakeland, Fla., for example, last month launched a private-label snack pack of fat-free, chocolate vanilla swirl pudding.
Health is the big issue this fall and it's on the radar for most age groups, noted market researcher Mona Doyle.
"I think there's a surge of health awareness, particularly among teenagers," said Doyle, who is president of Consumer Network, a Philadelphia-based consumer research group. "Any trend among teenagers usually moves downward to the lower age groups."
Health may have popped up on kids' radar, but fun as well as taste are still high on their priority lists. New products must come in fun colors and fun packaging to score with children, sources said.
Certainly a new line, introduced this summer by long-time pudding manufacturer Kozy Shack, Hicksville, N.Y., would qualify as "fun." Jammin' Gels, in extreme colors, come in snack packs in three flavors: Atomic Apple, Fruit Punch Fusion and Cool Berry Burst.
On the Radar
Kids are getting the message that eating healthy is a good thing, but that doesn't mean they'll willingly sit down to whole grain gruel or boiled brown rice.
What it does mean is they're looking at products' ingredients because they know what's healthy and what isn't, and some use a product's healthful aspects to leverage what Mom will buy, according to researchers at Just Kid, a Stamford, Conn.-based consulting firm that focuses on young consumers.
New research, commissioned by the firm, bolsters the notion that health awareness is pervasive. In a survey of children ages 9 to 12, researchers found that 85% want "more foods that are both fun and healthy." In a companion study of 8- to 12-year-olds, a surprising 93% said they care about their health.
In qualitative research involving intercept interviews and focus groups, Just Kid discovered that 83% of children 8 to 12 years old said they need "more healthy snacks so my Mom will buy them."
Manufacturers have responded with a slew of new yogurt and pudding products aimed at children. Of about 130 new yogurt products and 13 refrigerated puddings launched in the past year, the majority have reduced-fat content, or no fat, and/or reduced sugar or no sugar, said Laurie Klein, vice president of Just Kid.
Through the years, pudding has benefited from its healthy image.
"Pudding anyway has always had a health halo around it, because of its milk content," said Michelle Poris, Just Kid's director of quantitative research. "It's a good source of calcium. Parents like to give their kids pudding as a snack."