New FTC guidelines will drive growth of healthy kids' products

Retailers, it's time to make room on your shelves for an explosion of meals, treats and drinks for kids. That's the message from market research firm Packaged Facts, which predicts that the market for children's foods and beverages will grow 40 percent during the next five years.

A combination of government policy and mounting health issues will drive this increase and will challenge food and beverage manufacturers to reformulate unhealthy products.

Currently, only about 40 percent, or $4 billion, of the kids' food market has a "better-for-you element," according to Packaged Facts. This includes products with claims such as "made with whole wheat" and "lower sugar."

The other 60 percent, or $6 billion of products, make no health claim. Perhaps this explains why frozen foods for children, including ice cream—a kids' favorite—is the biggest seller, accounting for $2 billion, or 23 percent, of retail sales. Beverages are second, followed by dairy products, Packaged Facts reported.

"Generally, foods that are made and marketed for kids are of poorer nutritional value than the adult counterparts," said Margo Wooton, director of nutrition policy at the Washington, D.C.-based advocacy group Center for the Science of Public Interest.

Yet, Wooton is cautiously optimistic. "I think we're beginning to see some changes," she said. "Five years ago companies weren't paying attention to the nutritional quality of what they market to kids. Now they are."

Carolyn Cozad, president of Bounce Enterprises, a holistic food and business consulting company in Henderson, Nev., shares Wooton's hope, believing that the "good-for-you" sector of kids' foods will ultimately rule as the majority. "The focus from a governmental level and community level are both strong winds helping to move the food industry in that direction," Cozad said. "However, how long change will take is a concern for many. Changing habits and belief systems is difficult to do, and since so much of the manufacturer's existence depends on demand, it will be a race to see whether the acceptance of healthier options can also take the lead on demand."