Organic Outlook: Tiny Tykes, Big Business

August 7, 2008
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Organic products for children continue to be among the fastest-growing segments within the organic industry.




Organic products for children continue to be among the fastest-growing segments within the organic industry, according to a March 4 release published by the Greenfield, Mass.-based Organic Trade Association (OTA).

“This market segment is targeted at an audience with little feet but [a] huge influence on the organic market of today and tomorrow,” OTA says.

Manufacturers within the organic arena tend to agree, largely crediting “concerned parents” for driving growth here.

“When a family is having a child, it’s a ‘watershed’ moment for considering all kinds of things that parents or individuals may have never considered before,” notes David Lang, president of Lang Naturals Inc., Newport, R.I. “Where they might not care about or know about organic foods for themselves, they want everything that’s the best for their baby.”

Nima Fotovat, director of sales, private label for Markham, Ontario-based Shandiz Natural Foods, also includes the rise in childhood obesity, type 2 diabetes and food allergies as key factors behind the growth in organic food products for children.

Education, too, has played a critical role, notes Nathan Crowell, vice president of purchasing and trade marketing for Blue Marble Brands, a division of United Natural Foods Inc. Consumers now are aware of the harmful impacts of chemical pesticides in the food chain and their potential impact on children’s brains.

“Even in difficult times, when people feel a lack of control, the one thing they can control to an extent is what they feed themselves and what they feed their children,” Crowell says.

They also have a say in the lotions, cleaners and other health and beauty items they opt to slather on their children’s bodies, notes Adena Surabian, president of Nature’s Baby Organics, Woodland Hills, Calif.

“The consumer [is] becoming more educated about the possible dangers of beauty and bath products that are currently in the marketplace,” she says. “Plus, parents usually only want the best for their babies.”

And few expect growth within the children’s organic products segment to slow down anytime soon - good news for retailers wanting to enter or expand store brand offerings here.

“As parents have children, it’s going to continue to grow,” Lang says. “New entries - and others staying in for the children they’ve already got.”



Trends for Tots

One of the largest trends impacting both the food and non-food sides of organic children’s products is the mainstreaming of organic items in general. Most traditional supermarkets, mass merchandisers and drugstores now offer a wide selection of organic items. 

In general, on-trend organic food items include convenient, healthful snack foods such as rice chips, snack bars and fruit bars, Fotovat says. Also growing in importance are gluten-, soy-, nut- and wheat-free items, and fruit juices and punches made with all-natural ingredients.

Crowell agrees with the trend toward gluten-free. He says toaster pastries, frozen waffles, cereal, juice boxes, cookies and crackers (complete with cartoon characters), macaroni and cheese, breaded chicken and fish nuggets, baby carrots, peanut butter and dried fruit/leather also can be added to the list of in-demand children’s organic foods.

In addition, Crowell says some organic food items for kids can be - and are - shared among child and adult usage. Such products include milk, yogurt/yogurt smoothies, frozen fruit, frozen vegetables and applesauce.

On the non-food side, Steve Shriver, founder of Cedar Rapids, Iowa-based Eco Lips Inc., sees a trend toward the “mocking” of mass-market products, but in a natural way.

“Fruity flavors and scents -and kid-friendly packaging designs with a natural/organic edge - are becoming more prevalent,” he says.

But fragrance-free toiletries such as sunblock, lotions and toothpaste also are attracting interest here, Fotovat says, as is “eco-friendly clothing” such as cloth diapers and hemp and bamboo items.

Crowell agrees that environmentally safe items are attracting attention, and also notes interest in homeopathic medicines for colds and in supplements posing as candy.



Hit, Don't Miss

 

To succeed, store brand organic items for children need to have acceptable general sales velocity, Crowell notes. He points to cereal, yogurt, macaroni and cheese, diapers, supplements, waffles, juice boxes, cookies and crackers, and frozen breaded chicken as the best food candidates for private label programs.

Items that have the best chance for private label success on the non-food side, says Surabian, are commonly used products such as lotions, shampoos, diaper creams and sunscreens.

“In this market, consumers are being cautious with their funds,” she says, “therefore, spending mostly on necessity items.”

Shriver adds lip balm to that necessity list, as well as soap.

Lang says retailers might want to consider membership in the OTA to gain a better under-standing of the organic industry before delving too deeply into a private label program geared toward the small set.

“The OTA truly understands and serves the organic industry,” he stresses. “Having this understanding from OTA would be a positive thing.”

Once a retailer launches a line of store brand organic products for children, Crowell recommends the use of loyalty card information to communicate the availability of these items directly to the households most likely to purchase them. These include high-income families and families with a pattern of organic purchases. In addition, he recommends implementation of a marketing program that incorporates in-store banners and signage communicating the chain’s commitment to organic foods and their value to children.

“It’s critical that retailers understand that households with children equal larger total basket size at checkout, that these households are more likely to include organic foods in their basket, and that offering a trustworthy brand of affordable organic products for both adults and children will result in retail loyalty,” Crowell says.

“The commitment to this shopper has to come from the senior management, or this shopper will look elsewhere to spend their money. One needs to look no further than the success of Trader Joe’s and Whole Foods to see the impact private label can have,” he adds. PLB

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