Kids Drinks Low Sugar, Little Space, But Opportunities Grow for Kids Drinks (with Brand News)

by Brad Avery

IN an era of hyperconsciousness surrounding health and wellness, be it the need to boost immune systems or the dangers of sugar, it should come as no surprise that parents are taking more caution over their children’s nutrition. And as kids head back to school in person without vaccine approval for the under 12 set, while the pandemic has proven to be far from over, that concern is sure to be at the front of many shoppers’ minds.

Take these numbers as examples: In August, Whole Foods Market released the results of an online survey conducted by The Harris Poll fi nding that parents of children under 18 spent an average of 27.2 minutes per week reading food labels and considering the ingredients in the food and drinks they give to their kids. That’s about one day per year.

Beyond that measure, an 87% majority of the 626 parents polled said they were concerned about the ingredients in their children’s food and, certainly to Whole Foods’ delight, 69% said they worry less about these ingredients when shopping at retailers they know prioritize healthy and clean label products.

This is, of course, not just the result of a global health crisis, but the culmination of a years-long CPG trend. As kids beverage makers have continuously worked to move the category towards better-foryou options, innovative brands are now being presented with new opportunities to gain a foothold in a notoriously challenging category, because major retailers are seeking out kids products with clean label ingredients and low sugar content. But it’s that last step, from the retailer to the lunchbox, that entrepreneurs are fi nding as the part of the path that is anything but smooth.

It’s What’s In The Bottle

As functional beverages have emerged as a signifi cant market for adult consumers, kids beverages are now seeing more innovations tailored around many of the same need states, including hydration, gut health, protein and immunity. But every parent knows it’s easier said than done to get a child to take something that’s good for them, leading to new products getting craftier in delivering full nutrition. Beverage giants are joining entrepreneurs in the pursuit of a new breed of kid customer. The Coca-Cola Company has long had the Honest Kids line, and February saw the launch of Frutly, a new hydrating juice water brand developed by PepsiCo. Pitched towards kids and teens, each 12 oz. bottle contains vitamins C and E and contains no added sugars or artifi cial sweeteners. Frutly was presented as a direct competitor to high sugar fruit juices and brands like Capri Sun and Juicy Juice and is targeting major retailers such as Walmart and Albertsons. Large and midsize brands are also stepping into the category; in December, Chobani launched its Little Chobani Probiotics yogurt smoothies as part of a broader line extension of probiotic heavy products.

While strategics are sending the signal to the industry that better-for-you kids drinks are a space worth investing in, midsize and small brands are simultaneously building their own innovation-driven plays.

In August, California-based dairy producer Clover Sonoma debuted Clover the Rainbow, a new platform brand of kids products beginning with a line of yogurt smoothies made with fruits and vegetables. Available in Strawberry Carrot, Blueberry Beet and Strawberry Banana Butternut varieties, the smoothies are intended to provide additional protein, calcium and probiotics for kids while using no artifi cial fl avors or sweeteners.

According to Kristel Corson, chief revenue offi cer and VP of sales and marketing for Clover Sonoma, the Clover the Rainbow brand has “a full product pipeline behind it” that will build around the blend of nutritious ingredients in dairy foods and drinks. Not dissimilar from “hidden veggie” food lines like Kidfresh, the smoothie line emphasizes sweet fl avors with low sugar to create a better-for-you product kids will want to consume.

“We’re teaching them about fruits and vegetables,” Corson said. “Future innovation will go in different directions and into other areas, but this fi rst line is our clearest interpretation of ‘eating the rainbow’ with fruits and vegetables.”

For California-based brand KidsLuv, CEO Ashi Jelinek said her goal is to bring the innovation of adult functional beverages into the realm of children via its zero sugar, vitamin enhanced beverages made with coconut water. Available in fl avors that are perhaps less common in the American kids market, including Flying FlaMango, Starstruck

Coconut and Peach Me, I’m Orange, the brand launched last year and has now laid out ground in about 1,600 stores nationwide including Walmart, Target, HEB and Stop and Shop.

Initially intended to provide an alternative format to deliver kids vitamins (as opposed to tablets and gummies), Jelinek said she does see the landscape changing amid the pandemic. The brand is now launching a new Mixed Berry fl avor containing Vitamin D and zinc to promote immunity.

“If there wasn’t the focus in your home already around ‘how do I keep my kids healthy?’ or ‘how do I add to their diet?’ Now, I think that even parents that maybe were never even interested in that are now interested in that,” Jelinek said. “I defi nitely think there’s this perfect storm of COVID, kids going back to school not being vaccinated, and how are you able to provide your kids with different immune options. So we’re a young brand, we’re really new, and I would say we’re just trying to offer parents an alternative to something that can be on the go.”

The Trouble with Retail

While the overall trend towards lower-sugar ingredient panels may be impacting traditional brands, it’s not always opening the door for innovative, better-for-you products. According to Theo Goldin, COO at Hint, many retailers have reduced the size of their kids drink sets in recent years making it more diffi cult for new brands, even one with pre-established awareness like Hint, to get on shelf.

“As parents have increasingly shied away from juice and juicy drinks over the past few years, the category space has been reduced, even though unsweetened fl avored water sits within that set too,” Goldin told BevNET. “For several years we’ve been hearing things like ‘I wish I could give you even more space but the size of the kids drink set is being reduced.’”

Hint, a maker of unsweetened fl avored waters, entered the kids set in 2018. But even as parents seek out these healthier products, Goldin said the limited shelf space can sow confusion as products like Hint Kids sit next to full sugar juices and juicy drinks, leading consumers to assume the drink is similarly loaded with calories or artifi cial ingredients.

Despite the hurdles, Goldin said the line has seen swift growth, giving the company a much-needed edge within the minimal space allotted. But it’s still “a tiny portion” of the brand’s total sales. According to Nielsen, Hint’s overall still fl avored water sales grew 93.3% to $117.3 million in the 52-week period ending August 28, primarily driven by its adult-facing fl agship products. Hint Kids continues to expand however, most recently receiving chainwide authorization in Target stores, bringing it up to 6,000 total points of distribution, he added, and the company is now adding a second copacker on the East Coast to expand capacity and cut cost of shipping.

For Melanie Kahn, founder and CEO of reduced sugar lemonade brand Poppilu, the hustle to get onto store shelves has been further complicated by industry-wide supply chain disruptions that have led to rapid infl ation in costs of materials, ingredients and freight. Those challenges put a strain on kids drinks brands which need to maintain low price points, while a lack of labor due to the pandemic has more directly led her company to hold back from a lack of labor due to the pandemic has more directly led her company to hold back from expanding into new accounts.

While reduced shelf space may make it harder for startups to receive authorizations, the brands that are approved are now facing frequent outof-stocks.

“The kids aseptic juice set has just been decimated,” Kahn said. “I mean, you go into any given retailer, and it’s one of those categories where there are just massive gaps on the shelf, huge blocks of just nothing.”

As of September, Kahn said she has enough inventory to carry her through, particularly as the brand has staked out space in the mainstream through retailers like Walmart and Target. Poppilu, whose organic lemonades contain just 30 calories and 7 grams of natural sugar per 6 oz. pouch, initially launched as a brand for adults but found

more success focusing on the kids category. Poppilu’s reduced sugar approach has generated interest from buyers lately, Khan said, and in July the brand grew its footprint to over 2,500 accounts, including Stop & Shop, Lowes, Giant Eagle and several divisions of Albertsons.

“What I’m hearing is that the more fl avors you’re using, as opposed to drawing the fl avor from juice itself, you’re getting very polarized reactions from the child consumer,” she said. “Because at the end of the day kids know what tastes good -- things like apple juice or full 100% juice, that’s what tastes good. So when you start mucking around with alternatives ... kids know the difference. So it’s about trying to fi nd that balance between what’s going to taste good for kids and what meets the nutritional criteria.”

Likewise, Jelinek said that she has seen a broad openness to functional kids drinks from buyers she’s spoken with. Whereas it used to be the independent and natural channel stores leading the functional charge, she said, she’s fi nding that the larger mass and conventional chains are, in fact, becoming more active in curating innovation, even within their limited space allotments.

“You know, they have a lot of more data than I have, and I’m sure that what they’re seeing is the growing consumer base of millennial parents and younger generations who are really looking for healthier products that hit those different notes that they look for in their own adult products,” Jelinek said. “So I think in general, that landscape is changing. And I think we’ll continue to see it change.”

Gnusante introduced a new kid-focused line of functional fruit shakes in four flavors: Tropical Unstoppable, Lemon Limelight, Strawberry Wise and Grape Aspiration. The Gnubees Plus line contains 8 grams of grass-fed protein, 4 grams of fiber and 30% of daily recommended vitamin C & D. The brand was also recently a finalist for BC Food and Beverage product of the year.

KidsLuv launched a new mixed berry flavor Beary Berry this Fall. Beary Berry has immune boosting benefits and contains Vitamin D and Zinc to help support kids’ health throughout the school year. KidsLuv products are 100% clean labeled, certified non-GMO, kosher, glutenfree and vegan.

Good2grow launched Organic Milk in Strawberry and Chocolate flavors and packaged in single-serve, 8 oz. bottles with a re-closable top. In addition to its nutritional benefits – including vitamins A and D, calcium and 8 grams of protein per serving – the new product also is kid-oriented with its two flavors and hundreds of kid-requested character tops. Good2Grow’s Organic Milk is available for a suggested retail price of $3.99 per bottle

PepsiCo launched the hydration-support juice water line Frutly designed for kids and teens this year. The drinks are made with fruit juice, water and electrolytes for taste and contain vitamins C and E. Frutly beverages are available in three flavors – Strawberry Kiwi, Fruit Punch and Apple Grape – and contain 60 calories per 12 oz. bottle.

Seeking to extend its reach beyond the hydration category and create a cleaningredient, family-oriented wellness platform brand, in July Kinderlyte introduced both a new brand identity, Kinderfarms, and co-founder – actress Jessica Biel – along with announcing the launch of a a kidfocused line of plant-based protein shakes.

This spring, Juicy Juice launched two reduced sugar juices - Lower Sugar Juice Berry Lemonade and Watermelon -- at retailers nationwide in multi-packs and multi-serve bottles. The juice contains 35% less sugar than the leading juice, no high fructose corn syrup and is an excellent source of vitamin C.

Earlier this year, Capri Sun reintroduced its “Adventures” line featuring globally inspired exotic flavors including Passion Fruit Mango, Papaya Watermelon, Guava Strawberry and Dragon Fruit Punch. Each is made with all natural ingredients and features 35% less sugar than the leading regular juice drink, according to the brand.