TEMPTING TUMMIES

KELLY GATES

Wholesome private-label lines are pleasing pint-sized palates.

Incited by the childhood-obesity crisis and healthy-eating craze, retailers are creating tasty and nutritious varieties of fun kids' food and merchandising them to little ones and their parents. But the market is far from child's play.

Sales of goods geared toward one of the youngest segments of eaters - 3 to 11 years old - increased to more than $15.1 billion in 2006, a rise of 8.5% from 2005, according to the most recent Kids' Foods and Beverages report by Packaged Facts, the New York-based publishing division of Marketresearch.com. U.S. sales are projected to hit $27 billion by 2011.

Loblaw Cos.,Toronto, is capitalizing on the trend.

"Given the current concern with childhood obesity in North America, the time was right for the President's Choice Mini Chefs products to launch in Canada," Loblaw spokeswoman Elizabeth Margles said.

The line includes Bug-a-licious Pasta in tomato-chicken sauce, Jungle Buddies animal-shaped baked chicken nuggets and Zippy fruit snack bars. The products are free of hydrogenated oils, artificial flavors and colors, and Loblaw places limits on their fat, calorie and sodium contents.

The same "weighty" issue prompted London-based Sainsbury's to completely revamp its private-label Blue Parrot line of kids' products last February.

"Sainsbury's is very aware of the health issues surrounding obesity and children, and it is important to us to help customers establish positive habits and change attitudes and behaviors toward healthy options," said Kerry Gaiger, senior brand manager for the chain's adult health line, Be Good to Yourself, and the new Sainsbury's Kids line.

As part of its reformulation, Sainsbury's swapped out many of its kid foods with replacements that have less salt, no hydrogenated fat and a lower fat content overall. The new line includes a caramel-flavored whole grain cereal with prebiotic bacteria, crispy breadsticks with cheese dip and a pack of 10-ounce kid-sized bottles of water.

Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill., sees this focus on healthy children's items as a natural offshoot of the adult health and wellness trend.

"We've seen retailers like Whole Foods and Safeway launch their own organic food lines and now they're experimenting with lines that specifically target kids," he explained. "Supermarkets want to increase the number of trips made to their stores and they know that households with children spend more than those without. It makes sense to have exclusive products they can market to this demographic."

Boulder, Colo.-based Wild Oats Markets recently introduced several new kid-friendly, organic products including applesauce cups, string cheese, fruit bars, baby carrots and oatmeal packs.

"There are a lot of consumer goods out there that target kids and aren't good for them and that is partly contributing to the obesity epidemic in this country," said Brian Albert, brand manager for the retailer. "All of our foods are made with health in mind, including any products that are favored by children."

While nutritional content is important to parents, retailers can't forget the kids or their tiny taste buds, said Ted Taft, managing director of Meridian Consulting, Westport, Conn.

"Retailers wanting to win over this segment need to make sure they have flavors that will appeal to them, a hard sell with healthy products," Taft said. "A good example is soy milk. Silk, the No. 1 brand, came out with flavors like vanilla and chocolate, which allow people to test their way into the product."

What better way to ensure flavors kids will love than to have each item sampled by the eaters themselves? Sainsbury's turns to a class of schoolchildren for food trials while Loblaw has its own group of pint-sized judges.

"Everything is taste-tested by our very own PC Mini Chefs Taste Team - real kids who rate the products on taste and fun appeal, and help come up with imaginative product names and flavors," Margles said. "After all, it doesn't matter if a product is nutritious if a child doesn't eat it."

Most chains have equally exclusive standards for the ingredients in their healthy kids' lines. All items in the Whole Kids Organic line at Whole Foods Market, for example, have no artificial colors, flavors or hydrogenated oils. Neither do those at Sainsbury's, Loblaw or Wild Oats.

Ideas about marketing are a bit more subjective. Some focus only on the parents, while others feel it's important to entice children as well.

"Retailers have a responsibility to be careful when it comes to marketing to kids," Albert said. "It should be a joint effort with the retailer and the parents to get kids to eat healthy foods."

Wild Oats chose to make parents the primary focus in its promotional efforts. As part of its comprehensive back-to-school program, the retailer's stores handed out school guides that contained nutritional information, fun facts, coupons and recipes for things like "Just Peachy" frozen fruit skewers with yogurt dip and spiced granola mix. The guides encouraged parents to have their children help prepare the simple recipes - an activity intended to increase their interest in cooking and eating healthy foods.

In overhauling its private-label kids' line, Sainsbury's removed all cartoon figures and replaced them with images of real children enjoying healthy foods.

"Sainsbury's has also moved all nutritional information to the back of the packaging, along with suggested recipes for the product," Gaiger said. "In addition, all products in this range are stamped with a green apple symbol, which is Sainsbury's symbol for health."

Loblaw packages its private-label children's foods in brightly colored containers highlighting cartoon images of children in chef hats. Products in the PC Mini Chef line feature a "thumbs up" logo, ensuring parents that nutritionists and kids approved each item.

"Kids don't make the purchases, the parents do, so retailers have to make their kids' products appealing to the parents as well as the children," explained Brian Sharoff, president of the New York-based Private Label Manufacturers Association.

Private-Label Hybrid

Cincinnati-based Kroger Co. entered into a partnership with Disney Consumer Products a few months ago and conjured up Disney Magic Selections. The hybrid line of healthy kids' products combines Kroger's corporate Private Selections brand with the well-known Disney brand.

"What we achieved is a cross between Disney and Kroger," said Harry Dolman, executive vice president of Disney Consumer Products for food, health and beauty. "Disney is the No. 7 brand in the world and is well-established in the eyes of the consumer, but where it touches the private-label space is in using Kroger's supply chain. This has allowed Disney and Kroger to come up with a branded product at a very attractive price value."

The Disney Magic Selections line includes more than 100 children's foods that will be rolled out in more than 2,400 stores owned by Kroger by the end of 2006. Products vary from granola bars, fruit cups and applesauce to macaroni and cheese and even Disney-branded fresh fruits, all in kid-sized portions and specially formulated with controlled calories, fat and sugar. Packages boast popular Disney characters from movies like "The Incredibles," "Monsters, Inc." and "The Lion King."

"This is a fun, convenient way for customers to bring the magic of Disney to the child's plate," said Nick Hahn, director of corporate brands for Kroger. "We look forward to delighting customers with more items in more categories as we work with Disney to integrate this line across our network of stores."

In 2007, the Disney Magic Selections brand will be added to baby and toddler products, personal care and floral items in Kroger stores.