Natural Food Industry Gears Up for Youth Market

The National Post (Canada)
November 22, 2000

Eat up, kids. It's organic: Natural-food companies finding a new
audience

By Lisa Sandberg
Page B4

"Adults may feel it's all right to eat garbage themselves, but
they don't want that for their children," says Maureen Putman,
vice-president of marketing for Hain Celestial Group, a family of
U.S. natural-food manufacturers.

Hain isn't the only manufacturer that is discovering a whole new
market -- children and teens -- for its organic and natural-food
products.

"The Baby Boomers' kids are growing, and there is an age category
that hasn't really been addressed," says Randy Whitteker, general
manager of the Ontario Natural Food Co-operative. "Kids are picky
eaters, and parents who try putting healthy food in front of them
are sometimes going to be disappointed," he adds.

In California, Fran Lent, president of Fran's Healthy Helpings, a
product line she developed for children, says: "I fed my children
organic baby food, but afterwards there was nothing healthy out
there for them."

Lent, the mother of eight-year-old twins, used McDonald's as a
marketing guide when designing her "guilt-free" TV dinners, which
are not yet available in Canada. "That is where the similarity
ends," says Lent, who recognizes that kids like their food to be
fun.

With names like Wacky Whale Pizza, Dino Chicken Chompers and
Soccer-Oni and Cheese, Lent's product line may appear to be just
another fast-food alternative. But, although the meals are not
organic, they have no artificial flavours, colours or
preservatives, and a side-by-side comparison shows that a
McDonald's chicken-nugget meal has four times the fat and almost
40% more sodium.

"In the last few years we have seen a number of companies who
have developed both product and packaging that appeal to parents
and children," says Katherine DiMatteo, executive director of the
Organic Trade Association (OTA) in Massachusetts, which
represents the organics industry in the United States, Canada and
Mexico.

In British Columbia, Nature's Path is one of these companies.
Traditionally an adult cereal brand, the company shifted gears
about a year-and-a-half ago and added EnviroKidz, a children's
product line including Amazon Frosted Flakes, Gorilla Munch,
Koala Krisp and Orangutan-O's. The company claims that the
EnviroKidz line is the first and only certified organic
children's cereal on the market.

According to Dave Neuman, the company's vice- president of sales
and marketing, other brands of natural children's cereals are
fruit-juice sweetened, leaving them with a hard and bitter taste.
EnviroKidz uses organic cane juice to sweeten its cereal --
which, he says, tastes more like refined sugar.

Hain Celestial Group, with annual sales of over US$400-million,
focuses much of its attention on the children's natural-food
market, with its Hain Kidz and Little Bear lines of foods and
snacks. "We are most definitely interested in pursuing the
children's market," says Maureen Putman.

Whole Foods Market -- the world's largest natural supermarket
retailer -- has developed an organic line intended just for
children, with products such as peanut butter and applesauce.

Several trends in the grocery industry have pushed natural-food
sales forward, according to Carol Radice, senior editor of
Grocery Headquarters Magazine. "We are in the middle of a very
strong consumer-centric period, and what consumers want and need
often serves as a catalyst for new product introductions," she
says.

Many parents have already fed their children baby-food products
with all natural or organic ingredients, and are "interested in
continuing to feed their children healthier options," says
Radice.

A study conducted by the U.S.-based Hartman Group found that
organic baby food is definitely a "gateway product" into the
natural-food category, and that "new parents with younger
children are most likely to buy organics for their kids."

For many people, Earth's Best baby food is their gateway brand.
Owned by Hain Celestial, Earth's Best is the biggest-selling line
of organic baby and toddler food in the United States. The
company plans to launch a line of organic children's food next
January -- for children ages two to 12. "This is just a natural
extension of baby food," says Putman.

Parents are not the only targets on the minds of organic-food
manufacturers. "The packaging is more colourful and has animals
or other types of graphics that are eye-appealing to children,"
says OTA's DiMatteo.

The EnviroKidz cereal boxes are a case in point.

"Everyone cares about endangered species, and if a kid reads our
cereal box, they will be able to carry on a conversation about
organic and genetically modified foods, without being scared to
death," says Dave Neuman. The company contributes 1% of its gross
annual sales to environmental and children's charities.

"We wanted our cereal to appeal to adults and children, and
didn't want to scare off the adults who are 'closet sweet-cereal
eaters' by putting cartoon characters on the box," says Neuman.

Another Hartman Group study found that 62% of all organic and
natural products are purchased in grocery stores, primarily
because of "convenience, pricing and selection," and that more
than one-third of these buyers feel grocers have "a large
selection of organic and natural products."

But some, like DiMatteo, feel that supermarkets have not
responded as well in putting organic grocery products on the
shelves next to conventional products. The Hartman Group study
also found that natural-food consumers will "go out of their way
to get to natural-food stores in an attempt to find special items
not available in their grocery stores."

As for Fran's Healthy Helpings, they "jumped very quickly" into
the traditional grocery channel, according to Lent. Her products
currently sell in about 3,500 stores across the United States,
including several major grocery chains.

"Supermarkets have begun to realize that natural and organic
convenience foods offer time-starved parents an option, and that
consumers are willing to pay more for it," says Carol Radice.
"This category is 'particularly ripe' for cross-over
[traditional] consumers" who are sick and tired of fast-food
options for their kids.

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