More room for growth in fragmented kids’ organic sector

According to the report, entitled Organic Kids Snacks and Baby Food​, from industry analysts New Nutrition Business, the US market for organic and natural children’s foods has been rapidly fragmenting, as parents look to a multitude of small, family-run companies to provide wholesome food for their children – and the organization says that this trend is likely to continue.

For larger manufacturers, the problem is one of trustworthiness. While the report recommends that smaller food companies focus on a two-pronged approach – marketing children’s foods as organic or natural as well as highlighting that they are ‘free from’ ingredients that are perceived as ‘bad’, such as sugar or artificial additives – for larger brands it said:

“It may in fact be best for large and established brands to continue to avoid creating any specific and natural propositions – most big brands are seen by health-conscious consumers as lacking the credibility to market these benefits.”​

Consumer skepticism​

This adds to previous research from organizations such as Mintel and Datamonitor that has suggested consumers are becoming increasingly skeptical about the claims of larger food manufacturers, including those that detail ingredients’ added health benefits, or extol the company’s eco-friendly credentials.

Since larger brands may find it more difficult to convince consumers that their claims are genuine, the report said: “That in turn means that the kids’ market is likely to continue to fragment, with share increasingly going to smaller brands – and many smaller brands growing… to the point where they represent serious competition to traditional mass market brands.”​

Recession-busting sector​

And although growth in the overall organic market has flattened with the recession, the market for children’s organics has not suffered, as spending on healthy food for their children is often the last place that parents are willing to make cutbacks.

“One area that seems well placed to withstand the recession is the market for organic baby and kids’ food. Parents, say companies in the sector, will trade down the quality of their own food before that of their children,” ​it said.

The analysts estimated that US sales of natural and organic foods targeted at children and babies stood at $1 billion in 2008.

In order to successfully market a food targeted to children or babies, New Nutrition Business recommends that manufacturers choose ingredients that are easily understood and as natural as possible; “use a ‘free-from’ benefit that is a logical fit to your product”​; and invest in consumer education if one of the ingredients “does not score highly in consumers’ perceptions as ‘natural’ – even though technically it may be.”​