As c-stores continue to expand their arsenal of healthy options aimed at adults, drinks for the kid in tow or buckled in the backseat of the car have become a growing trend among manufacturers of both new and expanding brands.
Describing the market as “small but growing,” Gary Hemphill, managing director of research for Beverage Marketing Corp., New York, says most kids drink mainstream brands, but newer brands are emerging specifically targeting kids, with many having a healthy bent.
Most kids’ drinks fall into one of three categories: fruit, dairy or water beverages, Hemphill says.
“That’s because kids’ drinks are positioned as healthy beverage alternatives and each of these three categories has a healthy halo,” he says. “Today’s consumers want variety and healthier refreshment in their beverage choices.”
How healthy is defined changes and shifts over time, he says, with today’s preferences leaning toward products with more natural ingredients and fewer calories.
“This trend is applicable to kids’ beverages on the market today,” Hemphill says.
In the big picture, the numbers are indeed small. Though statistics on drinks targeting kids are difficult to pull from available industry numbers, juice and juice drinks as well as “other packaged beverages,” which includes enhanced waters, improved in sales in 2014 over the year before, according to data from the NACS State of the Industry Survey of 2014 Data. Juice increased 2.1% in sales and 1.0% in units, with other packaged beverages growing 12.2% in sales and 10.3% in units. But combined, those subcategories make up only 14.0% of packaged-beverage sales, compared to carbonated soft drinks—the largest subcategory in c-stores—at 33.2%.
Still, the beverage marketplace has grown increasingly more fragmented and targeted in recent years, creating new marketing opportunities for retailers, says Hemphill: “This has given rise to increasing numbers of kid-targeted beverages, as well as beverages targeting other consumer-demographic segments.”
Health as a Differentiator
Healthier options are on the rise for other reasons as well. In a time when soda and high-sugar drinks have become targets for advocates rallying against childhood obesity (see sidebar), many manufacturers are responding with options that use health as a differentiator.
“If you look at children’s beverages, the category is dominated by products with a lot of sugar,” says Arthur Gallego, global director of corporate communications for coconut water brand Vita Coco, New York. “There hasn’t been much innovation in the children’s beverage taste profile.”
While its initial product launched in 2004, Vita Coco in 2013 introduced a children’s option with less sugar than typical choices. Developed with a child’s palate in mind, the drinks, Gallego says, have a balance of coconut water and filtered water, resulting in “less viscosity” than pure coconut water.
Beverages containing coconut water have received a healthy halo due to their high levels of potassium and hydration properties. Vita Coco offers traditional coconut water as well as coconut waters blended with fruit purées such as peach-mango and orange.
The kids’ version comes in cherry, apple, punch and lemonade flavors, each with 8 grams of sugar, which is less than competing brands, according to the company.
“Parents won’t stop looking for better options,” he says. The company’s own consumer feedback was the main reason Vita Coco developed a children’s version. “And you don’t have to be dramatically different, just an improvement. Kids will embrace [drinks with] less sugar, less artificial ingredients.”
Reaching Mom
Moms are the primary buyers of kids’ beverages today, so c-stores that offer them have a chance to gain greater appeal with female consumers, says Hemphill of Beverage Marketing.
Brent Guinn, vice president of marketing for good2grow, Atlanta, agrees. “Quantitatively and qualitatively, I’ve heard consistent complaints from moms that they can’t find better-for-you options when outside of the home,” says Guinn, whose company’s lineup includes apple and organic juices, flavored waters and fruit and vegetable blends, touting no sugar added, no genetically modified ingredients and no artificial colors, flavors or preservatives.
“[It’s] a macro problem, not just c-stores,” he says. “Consistently, [a mom’s] choices are limited. On her way to soccer practice or day care, or headed home or out for an afternoon in the city, there aren’t many places for [affordable], better-for-you snacks [or beverages].”
Guinn sees c-stores playing an obvious role, but retailers must do their homework. From both experience and consumer research, many elements play into a mom’s choice, including flavor and type of beverage.
“Children are picky,” he says. “There’s a difference between apple juice and fruit punch.”
Younger kids age out of certain beverages, such as apple juice, while older kids prefer additional flavors, Guinn says.
Occasion also plays a role. Flavored waters are more about healthy hydration, while fruit juice may be more of a treat. “Different occasions create different [shopping] environments,” he says.
CONTINUED: The Packaging Factor
The Packaging Factor
Undoubtedly, packaging and the visual messages created—everything from colorful shippers to toy-shaped containers—further distinguish these beverages from other store options. The good2grow line licenses popular cartoon characters to “top” their bottles, with the heads of personalities such as Mickey Mouse and SpongeBob SquarePants adding to the products’ marketability.
For Tom Weiss, president and CEO of Drink Blocks, Ladera Ranch, Calif., the novelty of his product is in its building-block-shaped containers. The drink itself is flavored water with a sweetener from stevia plant extract. With no calories or sugar and a nonstaining formula, it comes in apple, fruit punch, orange and grape flavors. The container’s unique shape appeals both as a drink and as a toy, with interconnecting parts so kids can take several of them and build forts, model cars or planes.
The company also features licensed characters such as the Power Rangers and Chuggington from the Disney Channel, as well as educational themes around letters, numbers and words to engage kids. Such secondary uses put the product into a light of sustainability, which also plays to customers interested in healthier options.
“The demand has always been there,” Weiss says. “But kids just need more choices, something fun and exciting.”
Issues of Health and Drinks
Deciphering what makes a drink healthy compared with sodas or other drinks high in sugar may be more an issue of perception than fact, according to a recent study.
Despite public health messages about the importance of reducing consumption of sugary drinks, many parents believe that some drinks with high amounts of added sugar—especially fruit drinks, sports drinks and flavored water—are healthy options for children, according to a recent study from the Rudd Center for Food Policy and Obesity at the University of Connecticut in Hartford.
“Although most parents know that soda is not good for children, many still believe that other sugary drinks are healthy options,” said Jennifer Harris, a study author and director of marketing initiatives for the Rudd Center, in a news release. “The labeling and marketing for these products imply that they are nutritious, and these misperceptions may explain why so many parents buy them.”
In the study, 96% of parents surveyed gave sugary drinks to their child in the month prior to the survey. Those who had given sugary drinks to their child provided them most often in the form of fruit drinks and regular soda—77% and 62% of parents, respectively—followed by sports drinks, sweetened iced tea and flavored water.
Among parents of children ages 2 to 5, 80% provided fruit drinks and 40% provided regular soda. Many parents said nutritional claims appearing on packages (such as indications that items were “real” or “natural,” contained vitamin C or antioxidants, or were low in calories or sodium) are important factors in their purchasing decisions.
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