Market shift
could benefit kids' licensed foods, report
By Lorraine Heller
Food Navigator
October 2, 2007
The market for
licensed kids' foods has taken a strong blow from recent
anti-obesity efforts, but after a period of re-adjustment,
sales of these products should again pick up, forecasts a
new report.
Sales of products marketed to 3-11 year olds with the use
of popular cartoon characters last year stood at $746m, a
nine percent increase since 2002.
Kids' Licensed Foods and Beverages, published by Packaged
Facts, predicts that the market will continue to grow at a
"slightly lower than historical" annual rate of seven
percent, to break the $1bn mark by 2007.
The main reason for this slow-down in growth is the
mounting pressure on industry to slash its marketing
efforts of unhealthy products to kids. In recent years,
parents, consumer groups, and finally also government,
have campaigned for guidelines to be established that
would limit the marketing of foods and beverages to
children, including the use of licensed characters on
products that do not meet certain nutritional criteria.
This has made keeping pace with the market difficult for
some marketers, said the report. However, it predicts that
once the "painful period of re-assessment and
re-adjustment" passes, kids' licensed products will again
see significant growth.
"Packaged Facts expects alternative kids' licensed
products to crop up on store shelves in the once-avoided
healthy profile categories, and for marketers to make use
of new avenues for promotion that are focused less on
television and more on interaction," said Cathy Minkler,
associate editor of Packaged Facts.
Industry has stepped up to the challenge through voluntary
initiatives to improve the nutritional profile of products
it markets to kids.
The Council of Better Business Bureau's (CBBB) Children's
Food and Beverage Advertising Initiative was set up last
year as a voluntary self-regulation program for industry.
Participants adopted nutrition standards to all marketing
aimed at children, and also committed to devote at least
half of their kids' advertising to promote healthier
products, good nutrition and healthy lifestyles.
The initiative is currently made up of 12 participants:
Cadbury Schweppes, Campbell Soup, Coca-Cola, General
Mills, Hershey, Kellogg, Kraft, McDonald's, PepsiCo,
Unilever, Masterfoods and Burger King, the latter of which
joined last month.
Packaged Facts states that these "major companies that
account for a large percentage of children's food and
beverage advertising have already pledged to curb their
advertising of junk food to kids and no longer use
licensed characters to advertise online or in print media
unless they're promoting healthier products, and we
project that more snack manufacturers will introduce
health snack alternatives to drive future profitability".
If the food industry's voluntary measures are not
considered an adequate response to the issue, it is highly
likely that new regulations will be implemented to enforce
advertising restrictions.
However, it is not just food and beverage manufacturers
that have been agreeing to certain guidelines. Leading
kids' entertainment brand Nickelodeon recently said it
will stop licensing its characters for use on 'unhealthy'
foods and beverages, as part of its commitment to help
slow the growth of childhood obesity.
In August it announced that as of January 2009 its
licensed characters on food packaging will be limited to
'better for you' products, in accordance with government
dietary guidelines.
Nickelodeon's characters have so far primarily been
associated with products such as cereal, ice cream and
candy. However, the group in 2005 launched a licensing
initiative to encourage a healthier diet for kids, and
said it expects to continue promoting healthy products.
Since then, other 'healthy' moves include a licensing
agreement with fruit firm Summeripe Worldwide, to bring
Nickelodeon's most popular characters, SpongeBob
SquarePants and Dora The Explorer, to packs of peaches,
plums and nectarines.
Previous agreements by the network have seen its
characters used on fruit and vegetable products including
fresh baby carrots, clementines, apples, pears, cherries,
spinach and organic edamame.
According to Nickelodeon, its two characters - SpongeBob
and Dora The Explorer - currently bring in around $1bn
each per year in sales of branded goods.