GO GA-GA

PEGGY BRESNICK KENDLER

The baby food category might be seen as a necessary evil to some, but savvy retailers know this segment represents tremendous opportunities for add-on sales and for capturing an important customer: the young mother.

Baby food sales have remained essentially flat over the past several years and, according to data from ACNielsen, Schaumburg, Ill., the category generated $3.5 billion in the food, drug and mass channels -- excluding Wal-Mart -- for the 52 weeks ended Jan. 26. This represented a decline of 1.2% from $3.4 billion the prior year.

On a unit basis, the category has also experienced consecutive declines, dropping 2.6% to 1.8 billion units sold for the same time period.

Some of the subcategories within the baby food segment have shown gains this past year with the exception of junior baby foods, which posted a loss of 0.7% in sales from the year before. Baby cereal and biscuits have been the gain leaders two years in a row, both in terms of unit and dollar sales, following the introduction of Gerber's new line of toddler snacks in 2000, Gerber Graduates, which managed to grow the category substantially in the past two years.

For some supermarkets, the entire baby food category has been somewhat of a wash for the past few years.

"Baby food used to be direct representation, and it just doesn't get the attention it used to get," according to Don Whitaker, director of grocery merchandising for Rosauers, a 15-unit chain that operates in the Pacific Northwest states of Washington, Oregon, Idaho and Montana. The firm operates five units under the Super One warehouse format and one Huckleberry's natural food store.

At Rosauers, jarred baby food remains the most popular. "The organic lines -- Earth's Best and Tender Harvest brands -- are drawing some attention," Whitaker noted.

The chain uses temporary price reductions, reduced prices and some in-ad coupons to pull customers into the aisle. "Plus, we've put quite a bit of nonfood in the baby aisle, making it more of a destination," Whitaker pointed out.

Other retailers rely on baby club programs to fuel interest in the category.

Price Chopper Supermarkets, Schenectady, N.Y., launched its baby club in September 2000.

Maureen Murphy, manager of Price Chopper's baby club, said the program is effective in drawing people into the aisle. "Members get a welcome package and newsletters designed to guide parents through the first two years of the baby's life, and each issue includes AdvantEDGE card reward offers on items geared toward keeping baby happy and healthy," she explained.

When the baby turns a year old, he or she gets a free birthday cake, and the store also offers members a gift subscription to their favorite magazine.

New members can sign up either in-store or on the company's Web site. Price Chopper's baby club now numbers 17,500 members.

A&P, Montvale, N.J., also launched a baby club program in 2000. According to Patti Councill, A&P's communications manager, the company's sales have been very strong in the category.

"When we introduced the baby club two years ago, we recognized that this was a key customer for us. The baby club has definitely helped with our efforts," she said.

The club is a frequent shopper program, tied to the store's value card, and shoppers get $20 back instantly when they spend $200 on baby products.

"I think that the baby club, along with our everyday low prices, have been increasing the number of shoppers in the category at our stores," Councill said. A&P stores feature baby items in every circular, and prominent in-store signage is designed to draw people into the aisle and advertise the baby club.

Councill reported that the core foods -- six- to 12-month jarred baby foods -- continue to be the chain's best-sellers. She added that the chain will be selling some stockkeeping units of Beech-Nut's First Advantage line, which might strengthen sales in the category even more.

The Gerber Graduates line has also done especially well. "As a matter of fact, when we first introduced toddler snacks, we couldn't keep them stocked," Councill said. "They were a good performer, and they continue to be a good performer."

Julie Cary, director of marketing, infant feeding, at Gerber, Fremont, Mich., said she is optimistic that the firm's newest introduction, Lil' Entrees, will be successful for the company, and for retailers as well.

The line, which includes third foods and Graduates foods for older babies, will feature a two-compartment, microwavable tray. For younger children, the tray will hold an entree-type food like vegetable chicken, as well as a vegetable/fruit combination food, and for older children, the trays will hold foods like chicken stew with noodles and green bean dices. Gerber will offer three SKUs in the third-foods line and three SKUs in the Graduates line.

The shelf-stable trays will begin shipping in August. Gerber will begin its marketing support in November, and will offer shippers for merchandising.

Cary said baby food is the one category that's primarily shopped in supermarkets, compared with all other baby segments. "We've found that the longer you keep them shopping for baby foods in your store, the more they spend on diapers and wipes, for instance."

Most other channels don't carry the assortment that mothers look for, so this is where the supermarkets have the advantage. "Shopping for baby food is all about variety. Moms want to introduce their babies to a variety of foods, so depth of assortment is extremely important. Mass hasn't really committed to that like grocery has," Cary said.

Beech-Nut recently rolled out First Advantage, a new line of jarred baby food that includes DHA and ARA, two fatty acids found naturally in breast milk that have been shown to support a baby's mental and visual development. The company has introduced 13 flavors with the DHA and ARA added in the form of dried egg yolks.

"We have a patent on the product concept," said Patty Kern, product manager for First Advantage at Beech-Nut Nutrition Corp., St. Louis.

The flavors are complementary to Beech-Nut's other varieties and include Banana Cream Dessert, Pear Berry Medley and Apple Delight, instead of just pears, bananas or applesauce.

The company began shipping the product in February, and Beech-Nut is distributed in 26 states throughout the country.

To promote the new offering, Beech-Nut will concentrate on reaching out directly to new mothers.

"Given that this is so new and moms are so information-hungry, we recognize that we need to get the word out to mom," Kern said. The company is doing print advertising as well as direct mail to new mothers. The firm also features First Advantage foods on its Web site and plans to do in-store shelf-talkers, as well as work directly with retailers on baby clubs and in-store ads.