The Children’s Snacking Market: key trends and future developments

shaping the market

Report Code: CS0614IS

Publication Date: June 2015

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Table of contents

Definitions •Demographic definitions •Methodology •Drivers and inhibitors in Kid’s Snacking •Introduction •Country coverage

Market Context •Historical and projected consumption in the Kid’s Snacking market •Comparison of the Kid’s Snacking market across the globe •Overall Kid’s Snacking occasions by age and gender, including under/over consumption •Share of the Kid’s Snacking market by urban/rural divide and income •Under/Over-consumption levels in the Kid’s Snacking market across the globe •Degree of influence consumer trends have on volume consumption in the Kid’s Snacking market

Demographic cohort consumption and consumer trend analysis •The core factors driving consumption occasions in Kid’s Snacking across the globe

Bakery & Cereals •The core factors driving consumption occasions in Bakery & Cereals Snacking across the globe •Demographic breakdown of Bakery & Cereals Snacking in developed and developing economies

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Table of contents

•Degree of influence top three trends have on volume by consumption and how the trend is influencing consumption in the Bakery & Cereals Snacking market

•New product example launches in the global Bakery & Cereals Snacks market

Confectionery •The core factors driving consumption occasions in Confectionery Snacking across the globe •Demographic breakdown of Confectionery Snacking in developed and developing economies •Degree of influence top three trends have on volume by consumption and how the trend is

influencing consumption in the Confectionery Snacking market •New product example launches in the global Bakery & Cereals Snacks market

Dairy and Soy •The core factors driving consumption occasions in Dairy and Soy Snacking across the globe •Demographic breakdown of Dairy and Soy Snacking in developed and developing economies •Degree of influence top three trends have on volume by consumption and how the trend is

influencing consumption in the Dairy and Soy Snacking market •New product example launches in the global Dairy and Soy Snacks market

Ice Cream •The core factors driving consumption occasions in Ice Cream Snacking across the globe •Demographic breakdown of Ice Cream Snacking in developed and developing economies

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Table of contents

•Degree of influence top three trends have on volume by consumption and how the trend is influencing consumption in the Ice Cream Snacking market

•New product example launches in the global Ice Cream Snacks market

Savory Snacks •The core factors driving consumption occasions in Savory Snacks Snacking across the globe •Demographic breakdown of Savory Snacks Snacking in developed and developing economies •Degree of influence top three trends have on volume by consumption and how the trend is

influencing consumption in the Savory Snacks Snacking market •New product example launches in the global Savory Snacks market

Case Examples •M&M’s Pretzel launch •Hershey’s Lancaster brand’s dual marketing in the US and China

Main barriers in the global Kid’s Snacking market •Explanation how certain barriers in the Kid’s Snacking marker might affect its growth

Recommended actions •How to successfully target key trends in the global Kid’s Snacking market

Appendix

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List of figures

List of figures • Figure 1: Overall Kid’s Snacking market by volume and category volume 2011-2013 • Figure 2: Growth rate of the Kid’s Snacking market by category volume 2011-2013 • Figure 3: Growth rate of the Kid’s Snacking by country 2013 • Figure 4: Global Kid’s Snacking occasions by age and gender 2013 • Figure 5: Over/under consumption by gender 2013 • Figure 6: Global Kid’s Snacking occasions by urban/rural and income demographics 2013 • Figure 7: Over/under consumption by country 2013 • Figure 8: Key motivations influencing the Kid’s Snacking market 2013 • Figure 9: Level of influence of 20 consumer trends on consumption by category volume, 2013 • Figure 10: Share of category consumption by gender, age, urban/rural, and income group in developed economies • Figure 11: Share of category consumption by gender, age, urban/rural, and income group in developing economies • Figure 12: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 13: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 14: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 15: Level of influence of 20 consumer trends on consumption by category volume, 2013 • Figure 16: Share of category consumption by gender, age, urban/rural, and income group in developed economies • Figure 17: Share of category consumption by gender, age, urban/rural, and income group in developing economies

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List of figures

List of figures (cont.) •Figure 18: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 19: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 20: Level of influence of a consumer trend on consumption by category volume, 2013 •Figure 21: Level of influence of 20 consumer trends on consumption by category volume, 2013 • Figure 16: Share of category consumption by gender, age, urban/rural, and income group in developed economies • Figure 22: Share of category consumption by gender, age, urban/rural, and income group in developing economies • Figure 23: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 24: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 25: Level of influence of a consumer trend on consumption by category volume, 2013 •Figure 26: Level of influence of 20 consumer trends on consumption by category volume, 2013 • Figure 27: Share of category consumption by gender, age, urban/rural, and income group in developed economies • Figure 28: Share of category consumption by gender, age, urban/rural, and income group in developing economies •Figure 29: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 30: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 31: Level of influence of a consumer trend on consumption by category volume, 2013

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List of figures

List of figures (cont.) •Figure 32: Level of influence of 20 consumer trends on consumption by category volume, 2013 • Figure 33: Share of category consumption by gender, age, urban/rural, and income group in developed economies • Figure 34: Share of category consumption by gender, age, urban/rural, and income group in developing economies •Figure 35: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 36: Level of influence of a consumer trend on consumption by category volume, 2013 • Figure 37: Level of influence of a consumer trend on consumption by category volume, 2013

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Reasons to buy this report

The Children’s Snacking Market: key trends and future developments shaping the market is a detailed consumer insight report, exploring the future of the Kid’s Snacking market in both developed and developing economies. The report breaks down the snacking market by category and when targeted effectively, can further expand the market, globally.

Future outlook The report provides insight to highlight the "so what?" implications behind the data, and analysis of how the need states of consumers within the Kid’s Snacking market will evolve in the short-to-medium term future. The recommended actions and analysis throughout the report will allow manufacturers to align their research and development and marketing strategy with the stand out trends influencing consumer behavior.

Sized market opportunities Canadean’s market data and country/category comparisons allow for markets and opportunities to be sized as a measure of potential profitability. Detailed figures also allow for market penetration to be quantified, revealing targeting opportunities for Kid’s Snacking manufactures and key areas for defense strategies .

Understand the key trends shaping consumer behavior Canadean’s unique consumer data, developed from extensive consumption surveys and consumer group tracking, quantifies the influence of 20 consumption motivations across the market. This grants a confident and thorough understanding of consumer behavior.

Find out who uses what, and why This report identifies the key consumer demographic groups driving the consumption in the Kid’s Snacking market, based on demographic profiles in developed and developing economies. Consumer analysis and case studies provide insight into the Kid’s Snacking market and clear opportunities for new product developments are explored.

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Asia-Pacific, especially India and China, is

an important market for snack

manufacturers due to the large demographic

size and rising disposable income, which

leads to increasing per capita consumption

Russia remains one of the

fastest-growing snacking

markets, globally

Rapidly increasing per capita consumption is creating new opportunities in emerging markets

US manufacturers are

focusing on product

innovation across

categories in the kids

snacks market

Consumers’ search for better value for

money products will drive the growth of

private label products

Country Coverage Brazil, China, France, Germany, India, Italy, Russian, Spain, UK, and US

New tastes and flavors

remain a priority for Latin

American snack

companies

Obesity concerns will

influence

consumption patterns

in the EU region

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Volu

me in k

g m

illio

n,

2013

Growth rate 2011–2013

Volume growth by category Yoghurt

Cakes, Pastries & Sweet Pies

Cookies (sweet Biscuits)

Impulse Ice Cream

Chocolate

Morning Goods

Sugar Confectionery

Dairy-based and Soy Desserts

Take-home Ice Cream

Processed Snacks

Savory Biscuits

Potato Chips

Ethnic/traditional Snacks

Artisanal Ice Cream

Nuts & Seeds

Gum

Popcorn

Cereal Bars

Pretzels

Energy Bars

Meat Snacks

The Kids Snacking market has grown at a rate of X.X% in volume terms during 2011–2013, mainly driven by factors such as Indulgence and the need for Personal Space & Time. Yogurt is the largest category in the market, accounting for XX.X% volume share in 2013, followed by Cakes, Pastries & Sweet Pies, and Cookies (Sweet Biscuits) with XX.X% and XX.X% share respectively. Consumption of Ethnic/Traditional Snacks grew at a rate of XX.X% during 2011–2013, which is comparatively higher than other categories. This is due to its low base and increasing popularity among consumers. Similarly, the Energy Bar category is also witnessing significant growth, which can be linked to younger consumers seeking products that help give them an energy boost to facilitate their busy life.

Cakes, Pastries & Sweet Pies, and Yogurt drive one-third of the Kids Snacking market by volume

Bubble Size = Share of Kids Snacks Volume 2013

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Indulgence

Personal Space & Time

Changing Age Structures

Better Value for Money

Fun & Enjoyment

Busy Lives

Changing Lifestages

Quality Seeking

Experience Seeking

Individualism

Trust

Urbanization & Migration

Health

Media

Connection

New Gender Behaviors

Beauty

Ethics, Responsibility & Spirituality

Aspirations

Technology Uptake

Value Influenced by Trend (Kg Million)

Key Motivations Influencing the Consumption of Bakery & Cereals Snacks, 2013

Changing Age Structures, Fun & Enjoyment, and Indulgence are among the primary factors driving Bakery & Cereals snacking across the globe

This chart shows the degree of influence that

each trend has on Bakery & Cereals snacking

occasions among consumers aged 0-15 in

Canadean’s 10 core countries. Changing Age

Structures is the most influential trend for

consumption, highlighting how kids want treats

they perceive to be sophisticated and upscale.

Fun & Enjoyment and Indulgence continue to

have a strong influence on consumption choice

among kids. This highlights how, despite the

importance of products being seen as upscale,

good taste and fun and novelty are still critical to

product positioning.

Better Value for Money is also a key

consideration, which will be critical due to the

limited levels of disposable income among kids

and cost conscious parents. If consumers are to

trade-up it needs to be seen as a genuine treat

Personal Space & Time is the third most

influential trend influencing Kids Snacking

habits, with it being particularly influential in the

cookies category. This highlights the importance

of kids needing moments of escapism with

traditional favorites.

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Kids Snacking influences 1.5 kg billion of Dairy Food consumption in developed economies per annum

Urban/Rural Income

Gender Age group

The diagrams below illustrate the share of Kids Dairy Food consumption influenced in 2013, segregated based on Gender,

Age group, Income group and Urban/Rural divide in developed economies (the UK, the US, France, Germany, Italy, and

Spain).

Percentage of consumption within each sub-category:

% of consumption influenced among each age group % of consumption influenced among each gender

% of consumption influenced among each income group % of consumption influenced among Urban/Rural group

Dairy-based and Soy Desserts: XX.X% Yoghurt : XX.X%

Puddings/desserts Yoghurt

Kids & Babies Tweens & Early Teens

Urban

Rural

Affluent

Better Off

Moderate Income

Hard Pressed

Rather Not Say

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Chocolate Gum Sugar Confectionery

Indulgence continues to be the leading motivator influencing Confectionery consumption among kids

Indulgence is, unsurprisingly, playing a pivotal role in

consumers’ product choices; Canadean’s Consumer

Data shows it was the key motivator with 38.8% of

the Confectionery market by volume when it comes

to Kids Snacking. Confectionery continues to be an

affordable luxury even though disposable incomes

are tight. Chocolatiers are experimenting with a

broad range of new indulgent ingredients, hybrid

varieties, and Sugar Confectionery innovation.

Launch of hybrid varieties

Manufacturers are increasingly launching hybrid chocolates, particularly in developed

markets, to attract children with fresh, novel flavors such as those with a combination

of sweet and savory (crackers and chocolate), or double flavors of milk and cocoa.

New textures are also being innovated, with chocolate bars filled with jellies, popping

candy, and fruits and nuts becoming increasingly popular. For instance, Mondelez has

introduced new chocolate bars combining Cadburys Dairy Milk with Ritz crackers and

the French sweet biscuit brand Lu. It includes pieces of Dairy Milk sandwiched

between rectangular biscuits.

Soft chewy candies launched in multiple flavors

The bulk of Sugar Confectionery consumers are kids seeking out everyday treats.

While hard boiled, sweet candy is the largest segment, the emergence of soft-style

eating candies appears to derive strong interest among kids. Brands such as

Starburst, Airheads Bites, and Sour Patch Kids are soft chewy candies available in a

variety of flavors, including watermelon, orange, and raspberry. The launch of varied

flavors also provides more choice to the consumer. For example, Maynards’ new

limited edition Sour Patch sweets, containing orange and blackcurrant flavored gum,

which are intensely sour but become gradually sweeter.

Share of Volume Consumption Influenced by Indulgence trend in

each category, 2013

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Innovative new product launches in the global Savory Snacks, Kids Snacking market

Brand: Blédiscuit Croissance au

Chocolat

Manufacturer: Beldina

Launched: France

Trend: Changing Lifestages

Blédiscuit Croissance au Chocolat from

Beldina, France is a chocolate flavored

biscuit specially designed to suit the

requirements of kids of different ages. Its

texture and composition is specifically

designed for babies who are 12 months

and older that already have some teeth.

Brand: Pirates Booty Aged White

Cheddar

Manufacturer: B & G Foods

Launched: US

Trend: Busy Lives, Changing Age

Structures

Pirates Booty’s rice and corn puffs in

Aged White Cheddar flavor are available

in small packs of 0.5 Oz each. Due to its

ingredients, it serves as an ideal school

lunch snack for kids looking for

something more sophisticated.

Brand: Smith’s Kids Potato Chips

Manufacturer: The Smith's Snackfood

Company

Launched: Australia

Trend: Better Value for Money

An assortment of 20 different Smith’s

snacks is available as a Kidz Pick pack in

Australia. The pack costs 50% less than

single packs and serves as an ideal

option for parents who prefer to shop in

bulk to save money whilst offering their

child variety in their snacking.

Brand: eat your vegetables

Manufacturer: Snikiddy

Launched: US, 2013

Trend: Experience Seeking

Snikiddy’s offers a wide range of

products that are ideal for kids snacking.

This new soy and ginger variety of

vegetable snack is an Asian-inspired

flavor aimed to tap into the popularity of

umami flavors, which is very rare in the

snacks aisle and provides a new taste

experience to kids.

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Some product examples from the KFC’s range in India

Fresh and value offerings will prove a growing threat to Kids Snacking manufacturers as QSR’s expand their menus

Traditionally, snacks are planned purchases from the supermarket or impulse purchases from convenience stores. However, Quick Service Restaurants and Coffee Shops are beginning to take a significant share of the Snacking market away from traditional Snacking brands, following the introduction of attractive kid’s menus. QSR’s are expanding their offering to give kids a variety of snacking products such as Ice Cream, Cakes, pastries, cookies, sandwiches, burgers, French fries, and salads. These value menus are offering consumers another option whereby they can have a warm, indulgent, filling Snack for a small price difference. The introduction of these Snacking menus also fits with the trend influenced by the changing lifestyle of kids, where they manage school, tuition, extra classes, and pursuing their hobbies all in a limited time, leading to fragmented meal times and driving growth of QSR’s Wider choices from QSR’s is becoming serious direct competition for supermarkets and convenience stores. McDonald’s and KFC are among the leading QSRs, which are increasingly attracting kids by offering value meals. Similarly, there are many more emerging local and international players who are re-aligning their menu to target Kids Snacking occasions with fresh offerings.

Hot Wings™ 5 pc Popcorn Chicken™

Burgers Strips

Fries Corn Cupz

Desserts

Krushers – Smoothies etc

Toasted Wraps

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Recommended Actions

Targeting the niche segment of Organic and Natural snacking

products

The demand for no artificial colors, additives, and preservatives is set to rise, as consumers’ dietary preferences develop to include more natural products in their kid’s diets. Customers associate organic and natural ingredients with higher quality and more artisanal production methods, and they are willing to pay a premium for products of this nature. Marketers can target health conscious and quality-seeking parents by positioning organic products as higher quality, highlighting the superior attributes they offer compared to generic products.

Targeting Sports Events

Most kids will follow one or more sport, depending on their personal choices. National and International sporting events create opportunities to increase sales by adopting focused marketing campaigns. Manufacturers can maximize their sales inline with sports events, such as the FIFA World Cup, Olympics, Super Bowl, European Football Championship, Major League Baseball World Series, and ICC Cricket World Cup. Depending on the popularity of a particular sporting event in the country, marketers can adopt specific marketing strategies including sponsorships, partnerships with teams, and extended advertising during the telecast to achieve wider viewership. These strategic initiatives will encourage impulse purchasing, building on the excitement surrounding such events, as well as increased media coverage.

Popsicles in the shape of a football, availing the arrival of World Cup FIFA Brazil 2014

Fox’s Biscuits launched a Party Footballs variety of their Party Rings. They combined new blue and green colors, with one of five different soccer designs engraved on the back of each biscuit to capitalize on the popularity of World Cup Football 2014 in Brazil.

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