The battle for shelf space is the next key challenge for healthy kids food

By Oliver Morrison

- Last updated on GMT

Image: Getty/Floresco Productions
Image: Getty/Floresco Productions

Related tags kids kids nutrition child nutrition Healthy eating

Kids remain ‘desperately underserved’ by the market, claim start-ups. They say there is a clear trend that more parents are prioritising home-style, fresh food for young children over shelf-stable food. But their next challenge is competition for shelf space.

Food brands are springing up in Europe promising to solve the problem of a lack of nutrient-dense foods for kids aged over one.   

We know childhood nutrition can shape health outcomes for a lifetime, influencing physical growth, cognitive development, immune maturation, the development of the digestive system and development of healthy eating habits. A poor early life diet raises the risk of developing non communicable diseases such as asthma, diabetes, obesity and heart disease.

But while knowledge is rapidly increasing into how the first 1000 days can shape a baby’s future​​, NPD has often ignored the ensuing age group, presenting a category ripe for disruption.  

“For decades the only convenient option for busy parents whose kids have grown out of baby and toddler food has been frozen junk,”​ claimed Jess Mackenzie, Director and Founder of UK brand Jess Cooks, which produces ready-meals for children aged 4+ and which has just received a £100,000 investment from three angle investors. “Almost 20 years ago, Ella’s Kitchen turned the baby food market on its head with their colourful range of pouches. Various products catering for toddlers have since appeared, such as Annabel Karmel, Kiddyum and Little Dish. Yet children over the age of 3 remain desperately underserved by the market,”​ she claimed.

Parents want healthy solutions amid a childhood obesity pandemic, she told us. “Children’s obesity is still a growing problem, partly because of the ubiquitous availability of junk food and lack of healthy options aimed at older children. It’s time for a change.”

One in three 11-year-olds in the European region are overweight or obese, according to the WHO.

Many parents are also confronted with children who are fussy eaters. This can take various forms, from an exclusive appetite for ‘white’ foods to an all-out refusal to eat veggies.

In the UK, 55% of children aged four and under have two or fewer portions of vegetables a day - that’s 2 million children, according to a recent survey conducted by YouGov and commissioned by kids’ food brand Organix. One-fifth of UK pre-schoolers eat only one portion per day – while almost 116,000 infants were found to have ‘no vegetables at all in their daily diet’.

And it's not just about quantity. A lack of dietary variety is also a cause for concern, with just six vegetables making a regular appearance on children’s plates.

Things may have taken a turn for the worse too during the COVID pandemic, with survey evidence from Europe​ suggesting that consumption of fresh foods declined. Although lockdowns have also allowed parents to spend more quality time with their children, especially around mealtimes, to further stoke demand for healthier, nutritious options.

“Serving healthy, nutrient-dense food to young, growing bodies is critical,”​ added Michelle Sørum CFO of Norwegian brand GroGro. “Yet most alternatives are shelf-stable, highly processed foods. As a parent, there is a massive gap between what you can buy and what you want to buy.”

GroGro, which has just raised NOK4.5m (€455,000) to fund expansion in Norway and Sweden, hopes to address this gap with fresh, cold-pressed organic meals for kids aged six months to 5 years. “There is a clear trend that more parents are prioritizing homemade, fresh food for young children over shelf-stable food,”​ Sørum said. “They would never eat processed food that has been on the shelf for years and question why they should choose this for their children.”

GroGro, product image 2
GroGro, which has just raised 4,5 NOK (455,000 EURO) to fund expansion into Norway and Sweden

‘Not all children want bland, beige food’

Mackenzie added she thinks parents are 'crying out for an alternative to the big, faceless brands whose main philosophy is to pile it high and sell it cheap'. There are two main trends in the baby and toddler food market that she hopes to capitalise on. The first is flavour. “Brands and retailers are rapidly coming around to the fact that not all children want bland, beige food. In fact, most children enjoy punchy flavours, and this is proved by the emergence of new baby food brands such as For Aisha, Little Piccolo and Babease, all of whom offer a much more diverse range of flavours.”​ 

The second trend is frozen, which in 2020 was the second fastest growing grocery category. “Consumers are rapidly coming around to the idea that frozen doesn’t have to mean low quality, and more and more frozen baby foods are launching in the D2C space, such as Mamamade. It’s only a matter of time until retailers catch on.”​ 

Challenger kids’ food brands all say they want to help parents provide healthier and clean label options to their children, who would likely permanently head to the biscuit tin if they had their way. “Unlike adults, children aren’t yet capable of making informed choices, and most would live on a diet of chocolate and crisps if left to their own devices,”​ said Mackenzie. “So they need their parents to ensure they have a balanced diet, which is why it’s crucial we provide those healthier options. If babies and adults can have access to healthy, good quality convenience foods, why not children?”

Parents increasingly demand options that are “nutrient dense, handy and convenient for their children”, ​added Sophie Baron, founder of aforementioned UK challenger Mamamade, which offers fresh and organic food for babies and toddlers. “​As Gen Zers and Millennials move into parenthood, we know that the generational concerns around wellbeing and sustainability will continue to be front of mind. We’re is here to provide a helping hand and provide peace of mind to parents who care deeply about how and what their children eat.”​ 

'Children over the age of 3 remain desperately underserved by the market,' Jess Mackenzie, the founder of Jess Cooks. 

The price and affordability question

But although these brands face opportunities to capitalise on shifting trends in the kid’s food sector, there are challenges too.

First is price and affordability. “There is a price premium of GroGro’s products versus traditional baby food products,” ​said Sørum. “However, a more relevant comparison is the average premium of fresh food versus shelf-stable food. For example, with pasta, soups, juices, etc. This tends to be a mark-up of 150-200% on average while the price premium for GroGro is much lower than this range.”

But GroGro is confident their customers are willing to pay a premium for these products and that they can win over people who would previously have stuck with the big brands. “We are growing the market as well as taking market share,”​ claimed Sørum. “First, our products attract new customers who normally only make homemade food and do not buy ready made products. Second, after being on the market for less than one year in Norway, we already have 12% of the market share in online sales within our category.”

The building scale challenge

The more pressing test is the battle for shelf space.

New products need new thinking and risk taking from retailers. For example, GroGro’s expansion requires additional investments and extra space for refrigerators to be installed in the retailer’s baby food aisle. This has slowed down the company's rollout process with physical retailers, admitted Sørum.

“The requirement of a refrigerator in the baby food aisle is completely unique for our physical retailers and does require additional investments and extra space,”​ she told us. “However, our pilot projects show that sales increase 300-400% with the installation of a refrigerator in the aisle versus the placement of our products in another chilled section in a store. So we have the data to back up the impact to reduce risk for retailers.”

She added: “In our experience, all retailer’s welcome innovation in this category since growth has been stagnant for many years. So, it is not a matter of if there is space for GroGro, but how quickly the installation plan can happen.”

Jess Cooks’s Mackenzie tells a similar story. “Freezer space by its nature is always limited, so it is tougher to secure a slot for a frozen brand than an ambient product,”​ she said. “Retailers also worry about brand visibility if you’re tucked away in the freezer, so marketing and educating consumers about your brand outside of the store becomes even more crucial.”

All shook up

She hopes the freezer category in the UK will be similarly disrupted like the baby food market. “For a very long time the market was dominated by the same bland, ambient jars of baby food such as Heinz and Cow and Gate. Then Ella’s Kitchen came along and totally shook up the category, and we’ve since seen many other exciting baby food brands launch into this space. Having been monopolised by beige junk food for the last fifty years, the freezer space is now ripe for disruption in all categories, not just kids’ food. Retailers know that more and more consumers are becoming educated about exactly what is in their food and how it’s made and are searching for brands they can trust to be sustainable and good quality.”

Do supermarkets need to cut margins for healthy children’s brands?

Supermarkets need to cut margins to help nutritious children’s brands deliver price parity and build scale, suggested another challenger in this space: Wild Hare, which has unveiled a range of children’s meals aimed at four to 10-year olds in the UK. Scaleability will have to come from a reduction in margin from the supermarkets if they really do want this as part of what they are offering to the consumer,” ​said founder Dominie Fearn. 

The potential rewards in the heathy kids’ food space outweigh the risks, concluded Mackenzie. “In many ways Jess Cooks is no brainer for retailers, given the obvious need and demand for healthier children’s food. But it is inevitably also a risk, because our products don’t fit neatly into either the ‘baby and toddler food’ or the ‘ready meal’ categories. We are looking to break new ground and establish a new “children’s meals” category, which is undeniably harder to do. The risk is greater, but if it pays off so are the rewards.”​ 

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