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Licensing will still play a major role...but be sure it's nutritious.

With global concerns about the children's obesity crisis, it's timely for Packaged Facts to deliver a Kids' Food and Beverages perspectives report (particularly timely with the Disney announcement regarding the use of its characters and name on food items that do not meet nutritional standards). To that end, according to the Packaged Facts report, 10-plus years ago, ordinary macaroni and cheese would have been considered a kids' food. In this new report, it is not. To be considered a kids' food, the noodles must either be in the shape of a cartoon character or the formulation must be enhanced with nutrients that are described as assisting with kids' growing needs (the report focuses on kids ages 3 to 11).

What's the good news for licensing in this kids' market sector? The most common attributes of food and beverages for U.S. kids are portability, some form of play value or fun factor, and the use of licensed cartoon or entertainment characters. For many children, particularly the very young, the product within the package frequently is secondary to the packaging itself. On what shelves are consumers finding these products? According to the report, parents are purchasing kids' food and beverages at varied retail channels. The majority of America shops traditional supermarkets (62 percent), followed by mass merchandisers (17 percent). However, thanks to health/natural food stores' efforts to appeal to parents (think Whole Foods' organic line crafted just for kids), this outlet is giving more traditional venues some serious competition when it comes to kids' food/beverage choices. Club stores, with 9 percent share of dollar sales, and dollar stores with 4 percent share, also are a threat to mainstream supermarkets. Packaged Facts suggests retailers utilize nutritional information and education to raise a retailer's public image amid the ongoing obesity crisis.

Predictions for the future of the kids' food and beverage sector include the appeal of grab-and-go selections (as the report reveals many children under the age of 13 are left to fend for themselves), and organics will continue to go mainstream as more consumers understand the health benefits.