I. Executive Summary

The Products
• Marketers Meet Demand for Kids' Foods
• Packaging Meets Kids' Needs and Desires
• FDA Labeling Standards
• Market Definition: Foods Designed for or Targeted to Kids

The Market
• Sales to Near $11.6 Billion by 2002
• Table 1-1: Estimated U.S. Retail Sales of Kids' Foods by Category, 1995-2002 (dollars)
• Cereal Leads Kids' Food Sales
• Figure 1-1: Estimated Share of Kids' Food Retail Sales by Category, 1997 (percent): 5 Product Categories
• Factors Affecting Market Growth
• Age 5-14 Population Will Approach 41 Million by 2000
• Kids Spend $7 Billion a Year on Food and Beverages
• Media Urges Kids to Spend
• The Marketing Quest for Lifelong Loyalty
• Restaurants Vie for Kids' Food Dollar

The Marketers
• Five Categories Attract Plethora of Players
• Food Giants Rule
• Most Marketers Are Multi-Category
• Three Companies Claim Half of Kids' Food Sales
• Ten Marketers Account for One-Third of Sales
• Brand Strength and Innovation Are Name of the Game
• Giants Dominate Most Kids' Food Segments
• Specialty Marketers Find Niches
• Marketing Trends
• Catching Kids' Interest Is Tricky
• Fads, Novelties Spur Interest
• Co-Branding Successes Inspire More
• Licensing Aggressive and Competitive
• Packaging Revamps Maximize Eye Appeal
• Holidays Add Novelty to Established or New Products
• New Product Trends
• Over $800 Million Spent on Advertising in 1996

Distribution and Retail
• Distribution Methods Vary
• Pricing on the Shelf
• Cereal
• Lunch Foods and Snacks
• Beverages
• Meals and Entrees
• Ice Cream and Frozen Novelties

The Consumer
• Kids Population Will Reach 41 Million by Year 2001
• Kids Market Really Several Markets
• Kids More Independent; Assume Role in Running Household
• Kids Derive Income from Three Sources
• Kids Spend Over $7 Billion a Year on Food and Beverages
• A Nation of Snackers
• Most Kids Eat Breakfast

Scope and Methodology
• Scope of Report
• Products Excluded from Market Definition

II. The Products

Introduction
• Marketers Meet Demand for Kids' Foods

Scope of Report
• Market Definition: Foods Designed for or Targeted to Kids
• Packaging Meets Kids' Needs and Desires
• Products Excluded from Kids' Foods Market Definition
• Five Product Categories

Cereals
• Sugared Cereals the Quintessential Kids' Food
• Ingredients
• Packaging and Labeling

Lunch Foods and Snacks
• A Broad and Subjective Category
• Cookies and Baked Goods
• Peanut Butter
• Lunch Packs
• Yogurts, Puddings, and Gelatins
• Fruit Snacks

Beverages
• Three Forms of Kids' Beverages

Meals and Entrees
• Breakfast, Lunch, and Dinner Products Included
• Breakfast Entrees
• Dinner Entrees

Ice Cream and Frozen Novelties
• Kid-Appeal Defines the Category

Nutrition Labeling
• FDA Labeling Standards

III. The Market
Figure 3-1: Estimated U.S. Retail Sales of Kids' Foods, 1994-1997 (dollars)

Market Size and Growth
• Methodology for Sales Estimates
• Retail Sales $9.3 Billion in 1997
• Table 3-1: Estimated U.S. Retail Sales of Kids' Foods, 1994-1997 (dollars)
• Cereal Leads Kids' Food Sales
• Table 3-2: Estimated U.S. Retail Sales of Kids' Foods by Category, 1995-1997 (dollars): 5 Product Categories
• Lunch Foods and Snacks in Second Place
• Table 3-3: Estimated U.S. Retail Sales of Kids' Lunch Foods and Snacks by Segment, 1995-1997 (dollars): 5 Product Segments
• Figure 3-2: Estimated Share of U.S. Retail Dollar Sales of Kids' Foods by Product Category, 1996 vs. 1997 (percent): 5 Product Categories
• Kids' Beverages Rank Third
• Meals and Entrees Are Fourth
• Table 3-4: Estimated U.S. Retail Sales of Kids' Meals and Entrees by Segment, 1995-1997 (dollars): Breakfast, Dinner
• Ice Cream and Frozen Novelties Small But Growing

Market Composition
• Cereals a Third of the Market
• Table 3-5: Share of U.S. Retail Dollar Sales of Kids' Foods by Product Category, 1996 vs. 1997 (percent): 5 Product Categories
• Cookies and Baked Goods Lead Lunch Foods and Snacks Category
• Table 3-6: Share of U.S. Retail Dollar Sales of Kids' Lunch Foods and Snacks by Segment, 1996 vs. 1997 (percent): 5 Product Segments
• Breakfast Segment Leads Meals and Entrees Category
• Table 3-7: Share of U.S. Retail Dollar Sales of Kids' Meals and Entrees by Segment, 1996 vs. 1997 (percent): Breakfast, Dinner
• Cereals Lead Market Decline
• Table 3-8: Retail Dollar Change in Kids' Food Sales by Product Category, 1996 vs. 1997 (dollars): 5 Product Categories

Factors Affecting Market Growth
• Population of 5- to 14-Year-Olds Will Approach 41 Million by 2000 Table 3-9: Projected Growth of U.S. Population Age 5-14, 1995-2050 (number and percent)
• Kids Spend $7 Billion a Year on Food and Beverages
• Media Urges Kids to Spend
• The Marketing Quest for Lifelong Loyalty
• Snacking the Rule in Kids' Food World
• Modern Families Require Quicker, More Convenient Foods
• Do Kids Care About "Healthy"?
• The Parent Factor
• Juice a Shining Example of Kids' Foods Market Strength
• Restaurants Vie for Kids' Food Dollar
• Many Kids' Foods Decline in Recessionary Periods
• Regulatory Environment May Toughen
• Figure 3-3: Projected U.S. Retail Sales of Kids' Foods, 1997-2002 (dollars)

Projected Market Growth
• Sales to Near $11.6 Billion by 2002
• Table 3-10: Projected U.S. Retail Sales of Kids' Foods, 1997-2002 (dollars)

IV. The Marketers

The Marketers
• Five Categories Attract Plethora of Players
• Food Giants Rule
• Most Marketers Are Multi-Category
• Table 4-1: U.S. Kids' Foods Market: Top Ten Marketers and Their Product Categories
• Table 4-2: U.S. Kids' Foods Market: Leading Marketers and Brands (82 Marketers and Their Brands)

Marketer and Brand Share: Overall Market
• Three Companies Claim Half of Kids' Food Sales
• Ten Marketers Account for One-Third of Sales
• Kellogg Slips, Philip Morris Gains
• Table 4-3: Estimated Marketer Share of U.S. Kids' Food Retail Dollar Sales, 1995 vs. 1996 (percent): 12 Marketers

Marketer and Brand Share: Cereal
• Kellogg Down in Share, General Mills and Post Up
• Table 4-4: Estimated Marketer Share of U.S. Kids' Food Retail Dollar Sales: Cereals, 1995 vs. 1996 (percent): 5 Marketers/48 Brands
• Kellogg's Lead Narrows
• Table 4-5: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Cereals, 1995 vs. 1996 (percent and dollars): 6 Marketers and 39 Brands
• Post Charts Biggest Percentage Point Gain
• Sales Down for Quaker Oats and Ralcorp, Up for Malt-O-Meal

Marketer and Brand Share: Lunch Foods and Snacks
• Five Marketers Make Up 57% of Kids' Lunch Foods and Snacks Category
• Table 4-6: Estimated Marketer Share of U.S. Kids' Food Retail Sales: Lunch Foods and Snacks, 1995 vs. 1996 (percent): 12 Marketers
• Next Seven Marketers Sew Up Nearly 30% of Sales
• RJR Number-One Cookie and Baked Goods Marketer
• Table 4-7: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Cookies and Baked Goods, 1995 vs. 1996 (percent and dollars): 12 Marketers
• Procter & Gamble Leads Peanut Butter Segment
• Table 4-8: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Peanut Butter, 1995 vs. 1996 (percent and dollars): 11 Marketers
• Oscar Mayer Dominates Lunch Pack Segment
• Table 4-9: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Lunch Packs, 1995 vs. 1996 (percent and dollars): 3 Marketers/7 Brands
• ConAgra Leads in Kids' Yogurts, Puddings, and Gelatins
• Table 4-10: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Yogurts, Puddings, and Gelatins, 1995 vs. 1996 (percent and dollars): 5 Marketers/20 Brands
• General Mills Dominates Fruit Snacks
• Table 4-11: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Fruit Snacks, 1995 vs. 1996 (percent and dollars): 8 Marketers/29 Brands

Marketer and Brand Share: Beverages
• Four Major Companies Battle Over Kids' Beverages
• Table 4-12: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Beverages, 1995 vs. 1996 (percent and dollars): 18 Marketers/26 Brands

Marketer and Brand Share: Meals and Entrees
• Kellogg Leads Category
• Table 4-13: Estimated Marketer Share of U.S. Kids' Foods Market: Meals and Entrees, 1995 vs. 1996 (percent): 8 Marketers
• Kellogg Dominates Breakfast Segment
• Table 4-14: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Breakfast Entrees, 1995 vs. 1996 (percent and dollars): 5 Marketers/7 Products
• Campbell Maintains Lead in Dinner Entrees
• Table 4-15: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Dinner Entrees, 1995 vs. 1996 (percent and dollars): 5 Marketers/6 Brands

Marketer and Brand Share: Ice Cream and Frozen Novelties
• Unilever on Top with Good Humor-Breyers
• Table 4-16: Estimated Marketer Share and Retail Sales of U.S. Kids' Foods Market: Ice Cream and Frozen Novelties, 1995 vs. 1996 (percent and dollars): 12 Marketers/23 Brands

The Competitive Situation
• Brand Strength and Innovation Are Name of the Game
• Giants Dominate Most Kids' Food Segments
• Specialty Marketers Find Niches
• Competition Can Be Direct, Indirect, or Across Categories
• Seasonality Influences Sales
• Cereal Giants Face Competition from Private Labels
• Peanut Butter Market Mature
• Lunch Packs Inspire Competition
• Yogurts, Puddings, and Gelatins Proliferate
• Fruit Snack Segment Constantly Churning Out New Offerings
• Many Marketers Compete in Kids' Beverages Category
• Meals and Entrees Not Diverse
• Ice Cream Category Dominated by a Few Players

Competitive Profile: Kellogg Company
• Major Cereal Marketer with Roots in Midwest
• Marketer Holds Commanding Share in Multiple Kids' Food Categories
• Cocoa Frosted Flakes and Razzle Dazzle Rice Krispies
• Takeover Interest, International Expansion in Future

Competitive Profile: General Mills
• Cereals Part of Marketer's Basket of Brand Offerings
• Cereal War Latest Landmark in Long History of Food Marketing
• Acquisition Takes Ralcorp Out of Branded Kids' Cereal Market
• Strength in New Product Introductions, Yogurts, Puddings, and Gelatins

Competitive Profile: Philip Morris Companies, Inc.
• Consumer Product Giant Markets Powerhouse Food and Tobacco Brands
• Recent Comer to The Kids' Foods Market
• Kool-Aid on Top of Kids' Beverage Category
• Food Buffer Against Tobacco Woes

Competitive Profile: The Procter & Gamble Company
• A Cupboard Full of Brands
• P&G Knows Consumer Products
• Lackluster Sales Mark Recent Performance
• Sunny Delight Shining Example of Kids' Food Success
• P&G Brings Olestra to Market
• Moving Away from Food?

Competitive Profile: Nestlé S.A
• Swiss Company Markets Much More Than Chocolate
• Significant Position in Kids' Foods Market
• Convenience Foods and Snacking Mark Current Course and Future Direction

Competitive Profile: ConAgra, Inc
• Grain Belt Corporation Covers All Aspects of Food Production
• A Proliferation of Consumer Products
• ConAgra Taps Kids' Foods Market with Major Offerings
• Revamp Hits Hard But Should Solidify Growth

Competitive Profile: Campbell Soup Company
• Dominant Soup Marketer Fields Variety of Foods
• Goldfish a Popular Kids' Offering
• Goldfish Help Lead Pepperidge Farm Sales Improvement
• Franco-American, Campbell Soup Brands Court Kids
• Swanson Spin-Off Imminent
• U.S. Sales Flat

Competitive Profile: Quaker Oats Co.
• Millers' Trust Spawns Major Cereal and Food Product Company
• Hot, Cold Cereal Targeted to Kids
• "Kids Monitor" Keeps Pulse of Younger Set
• Beverage Disasters and New Directions
• New Directions May Enhance Quaker's Sales

Competitive Profile: Unilever
• Supermarket Shelves Full of Unilever Products
• Acquisition Yields Position in Kids' Foods Market
• Deep Pockets Purchased Ice Cream Position
• Hundreds of Ice Cream Products Under Good Humor-Breyers
• Co-Branding and Licensing Abundant in Good Humor
• Paring The Unilever Tree

Competitive Profile: RJR Nabisco Holdings Corp
• In the Upper Ranks of the Fortune 500
• Nabisco Biscuit Dominates Cookies and Crackers
• Extension Strategy Adds Kids' Food Offerings
• Weakness Inspires Paring Back Brands

Competitive Profile: The Coca-Cola Company
• Flagship Cola Product One of Many Brands
• Hi-C a Perennial Favorite
• Company Direction Unchanged Following Goizueta's Death

Competitive Profile: Bestfoods
• New Name Reflects Core Business
• Skippy Brand Number Two in United States
• Looking Outward for Growth

Marketing Trends
• Catching Kids' Interest Is Tricky
• Fads, Novelties Spur Interest
• Kids' Foods Trendy But Timeless
• Co-Branding Successes Inspire More
• Licensing Aggressive and Competitive
• Names Convey Personality of Product
• Gross is Good
• Packaging is Powerful
• Packaging Revamps Maximize Eye Appeal Holidays Add Novelty to Established or New Products TV Marketing Gets Creative
• Philanthropy Promoted Frequently

New Product Trends
• New Products, Line Extensions Key to Survival
• Kids Prefer Extreme Flavors, Bright Colors, Fun Shapes
• Dips, Sprinkles, and Toppings Continue to Excite
• Interactivity Makes Playing with Food Acceptable
• Make-It-Yourself
• Mexican Food Meets Lunch Packs
• Cookie Shapes
• Fruit Snacks
• Shelf-Stable Juice Concentrates on Tap Milk-Based, Flavored Drinks: An Emerging Beverage Choice?
• Non-Kid Beverages Try for Kid Consumers
• Table 4-17: U.S. Kids' Foods Market: Selected New Product Introductions, 1996-1997

Consumer Advertising Expenditures
• Over $800 Million Spent in 1996
• Additional Promotional Expenditures
• Top Three Advertisers Spend $561 Million of Total Measured Expenditures
• Kellogg Spends the Most
• General Mills Also Spends Heavily
• Philip Morris Third in Measured Advertising Expenditures
• Second-Tier Marketers Spend $101 Million
• Third-Tier Marketers Account for $57 Million in Expenditures
• Remainder of Marketers Spend Almost $3 Million

Consumer Advertising Positioning
• Advertising a Powerful Tool
• TV Advertising Drives Sales
• Advertisements Promote Taste
• Fantasy Versus Reality: Pitches Depend on Age
• Freedom Cuts Across Age Segments
• Kid Ads Tie in Promotions
• Parent Ads Differ from Kid Ads
• Value
• For Kids, Performance More Important Than Nutrition
• Your Parents Won't/Will Understand

Consumer Promotions
• Promotions Essential to Success
• Adherence to Criteria Influence Success of Promotion
• Coupons the Most Frequent Promotion
• Admission Coupons Offer a Variation
• Many Kids' Food Products Include Package Promotions
• Cereal Prizes Drive Impulse Sales
• Mail-In Promotions Proliferate
• Television Promotions Are Big Business
• Internet Opens New Promotional Playing Field
• Goldfish Mobile Brings Kids' Foods on Location
• Examples of Consumer Promotions

Trade Promotions and Advertising
• Promotions Are Standard
• Trade Advertising

V. Distribution And Retail

Distribution
• Distribution Methods Vary
• Direct-Store-Delivery Brings Goods to Large Retailers
• Advantages of Direct-Store-Delivery
• Disadvantages of Direct-Store-Delivery
• Advantages of Warehouse Delivery
• Disadvantages of Warehouse Delivery
• Smaller Marketers Work Through Brokers
• Vending Machine Delivery: Standard and Alternative Distribution
• Marketers Target Consumer's Needs via Distribution
• Distribution Promoted to Consumer

Retail Overview
• Pricing on the Shelf
• Supermarket Business Is Major Data Source

At the Retail Level: Cereal
• Supermarkets Account for Majority of Sales
• Grocers Devote Considerable Space to Cereals
• Cereals Grouped by Marketer
• Margins Average Around 26%

At the Retail Level: Lunch Foods and Snacks
• Sales Predominantly Through Supermarkets
• Cookies and Baked Goods
• Peanut Butter Follows Standard Distribution for Dry Groceries
• Lunch Packs Follow Packaged Meat Distribution Pattern
• Kids' Yogurts Follow Standard Distribution Pattern
• Margins Low for Prepared Puddings and Gelatins
• Fruit Snacks Displayed with Cookies, Granola Bars, or Other Snacks

At the Retail Level: Beverages
• Distribution Is Standard
• Grocery Store Most Important Venue
• Juices Grouped by Marketer
• Powdered Drink Mixes and Milk Flavorings Sold Apart from Other Kids' Beverages
• Sunny Delight Sold in Refrigerator Case
• Beverage Margins Encompass Range

At the Retail Level: Meals and Entrees
• Kids' Food Distribution Patterns Follow Adult Entree Distribution
• Frozen Foods Follow Two Main Paths
• Grocery Stores Make Almost All Sales
• Freezer Space Scarce for Breakfast Foods
• Frozen Breakfast Entrees Average 34% Margins
• Toaster Pastries Sold Mainly Through Supermarkets
• Frozen Dinners Sold Overwhelmingly Through Supermarkets
• Freezer Case Space Is Precious
• Frozen Entrees Report High Margins
• Canned and Shelf-Stable Pasta Follow Standard Grocery Path
• Most Pasta Sales Through Grocery Stores
• Pasta Commands Considerable Shelf Space

At the Retail Level: Ice Cream and Frozen Novelties
• Competition Intense in Freezer Case
• Ice Cream and Novelty Margins Average 35%

At the Retail Level: Grocers Respond to Kids
• Kids Merit Attention, Retailers Discover
• Merchandising Techniques Account for Size, Proclivity to Play
• Licensing Reaches Retail Floor
• Marketers Assist at Retail
• Kid Centers Draw Parents

VI. The Consumer

Kids Population
• Over 39 Million Kids Age 5-14
• Kids Population Will Reach 41 Million by Year 2001
• Males Outnumber Females to Age 24
• Table 6-1: Share of U.S. Population Age 5-14 by Gender, 1997
• Kids Market Really Several Markets
• Developmental Issues Distinguish Children
• The Three Developmental Age Groups
• Table 6-2: Share of Kids Population by Age, 1997 (number and percent): From Age 5 to Age 14
• Kids Reflect Growing Diversity
• Table 6-3: Share of Kids Population by Race, 1997 (number and percent): White, Black, Hispanic, Asian/Pacific Islander, Native American

Family Status
• Percentage of Households with Children Declining
• Two-Parent Households Giving Way to One-Parent Households
• Only 7 of 10 Children Live in Two-Parent Household
• Only Child Predominates
• Table 6-4: Families by Number of Own Children Under 18 Years Old, 1996 (number and percent): No Children, One, Two, Three or More Children
• Both Parents Work in Majority of Kids' Households
• Kids More Independent; Assume Role in Running Household
• Kids Are Family-Oriented

Economic Status
• One-Third of All Children Live in or Near Poverty
• One-Third of Households with Kids 6-17 Are Middle Class
• One Third Live in Households with Incomes in Excess of $50,000
• Table 6-5: Household Income of Families with Children 6-17 Years Old, 1996 (number and percent): From Under $10,000 to $75,000 and Over
• Income Higher for Families with Kids 6-17
• Income Higher When Both Parents Work
• Kids Derive Income from Three Sources
• Kids' Allowances Have Grown, But They Don't Buy as Much as They Used To
• Gifts a Significant Source of Income
• Almost All of Kids' Income Is Discretionary
• ...But Kids Surprisingly Big on Saving
• Kids Spend Over $7 Billion a Year on Food and Beverages

Kids as Shoppers
• Evolution of a Shopper
• Cereals First Products Selected
• Kids Shop Alone by Age Six
• Kids Learn to Shop at Supermarkets
• Kids Shop Often
• Kids Buy on Impulse
• 70% of Purchase Decisions Made In-Store
• Kids Extremely Brand-Conscious
• Brand Loyalty Highest at Grocery Store
• Store Brands Seen as Inferior
• Kids Emulate Other—Particularly Older—Kids
• TV Advertising a Big Influence
• Children Take Advertising Seriously

Kids' Food Preferences
• A Nation of Snackers
• Nutrition Can Suffer on All-Snack Diet
• Most Kids Eat Breakfast
• Table 6-6: What Children Eat For Breakfast by Gender: Most Frequently Named Items (percent): 12 Items
• Kids' Top Five for Lunch
• Breakfast Foods Increasingly Eaten at Lunch
• Ethnic Foods Now Mainstream
• Beverages of Choice Include Soda, Juice
• Kids Like Dairy Foods
• Flavors Kids Like

Appendix I: Examples Of Consumer Advertising And Promotions

Appendix II: Addresses Of Selected Marketers