Suddenly, there’s a more conservative climate surrounding marketing products to kids. So where does that leave candy? By Renee M. Covino

Could the most fun demographic group to market to—kids, of course—now become the most feared? The climate surrounding marketing to kids is changing in 2005, as evidenced by surprising pronouncements from manufacturing giants that are backing away from some of their kid-targeted advertising.

Of particular note, Kraft Foods recently announced that it would voluntarily cease advertising food products to children under the age of 11 if the products do not meet new corporate health standards. This means that ads for some of the company’s best-known snack foods and beverages, such as Oreos and Kool-Aid, will no longer appear during certain kid-watched television programming such as cartoons.

“We recognize that parents are concerned about the mix of food products being advertised to younger children,” said Mark Berlind, Kraft’s executive vice president of global corporate affairs, in a recent statement.

PepsiCo, too, has also introduced voluntary restrictions on its advertising to children, and has placed limits on the portion sizes of products (such as Doritos) sold in U.S. schools.

Both companies have initiated labeling programs for products that do meet certain health restrictions and therefore could be marketed to kids.

Similar moves are expected from other food companies in response to increased media and industry focus on the fact that roughly 15 percent of U.S. children and adolescents are overweight.

The way some health advocacy groups look at it is that free choice in supermarket aisles has been a higher priority than public health. “The problem has been that the promotion of kids’ snack foods has outstripped the marketing of healthy foods by a dollar factor of 11 million to one,” states T. Susan Chang, a food policy expert and food writer for the Boston Globe.

But is advertising really responsible for childhood obesity? William C. MacLeod, head of Collier Shannon Scott law firm in Washington, D.C., and former director of the Bureau of Consumer Protection at the Federal Trade Commission, believes the answer is a resounding “no.”

MacLeod recently spoke at the Institute of Medicine about childhood obesity and advertising. It was noted that in 2004, the Kaiser Family Foundation and the American Psychological Association released reports concluding that advertising was contributing to obesity. The conclusions came in the wake of findings that the number of advertisements viewed by children had grown from 30,000 to 40,000 messages per year over the last decade—and most of those were for food. MacLeod pointed out that the report was based on an extrapolation from a small sample of TV programming. Using date from Nielsen Media Research, MacLeod presented a report that provided a more precise estimate of the number of food, beverage and restaurant ads that children watched from 1994 to 2003. He found that the food and restaurant commercials viewed by children had become shorter and the number of those commercials had fallen about 15 percent in the last decade.

He concluded that the data contradict the idea that advertising contributes to obesity. In fact, if obesity is increasing while advertising is falling, attempts to link the two would have to conclude that advertising reduced obesity, he quipped.

“The most sensible conclusion is that obesity is far too complex to explain with advertising,” says MacLeod. “Any assessment of the role of advertising must rely on accurate data, not erroneous estimates.”

A group called the Alliance for American Advertising has been formed and will focus on collecting additional data and research on whether or not advertising and childhood obesity are linked. Members include Kraft as well as General Mills and Kellogg Co.

While all this is promising to the food industry, it doesn’t specifically address the candy industry. Should candy manufacturers take a stand and start to make voluntary restrictions or alliances of their own?

These are important questions for the industry, but it seems that compared to many food manufacturers targeting kids, candy makers are in a good spot.

“We think candy manufacturers are in the best position of anyone,” maintains Jennifer Goodman, managing director of the Geppetto Group, a marketing company focused on the youth market. “The most important trait of responsible marketers is to tell the truth, especially to kids, and that’s what candy makers have been doing all along,” says Goodman. “Candy is a treat, and I don’t believe candy companies have ever tried to pretend that they’re not about treats.”

Deirdre Gonzalez, vice president of marketing for Cap Candy, defends that stance for her industry. “We certainly have not, and I don’t think anyone in the candy business has ever marketed candy as a staple in your diet. That would be totally irresponsible.”

Even a health and wellness expert agrees. “I think that candy still falls in a different category from food or snacks in both the marketer and consumers’ minds,” says Terra Wellington, a broadcast health expert and the wellness editor for Fit Body magazine. “This is because candy is rarely, if ever, substituted for a meal, while unhealthy snacks and poor food choices are often poised as meals,” she explains.

It’s all about “keeping ahead of the curve,” if candy marketers want to maintain this advantageous position, according to Peter Koeppel, president of Peter Koeppel Direct, a direct response media buying firm. “It’s more responsible to be proactive.”

For instance, candy makers would do well to keep portion sizes smaller for kids. “When you go to Europe, candy is delivered in much smaller pieces,” says Koeppel. “Many U.S. candy companies are now doing this, but they should directly target the kids. They want to push smaller, not supersize, treats.”

According to Wellington, responsible candy makers should take note of what others are doing and ask themselves the following questions: “Does your product contain trans-fat? If yes, can you eliminate the trans-fat and obtain additional market share by smart product packaging and advertising that it focuses on zero trans-fat? Can you alter your product so that it has lower sugar? If yes, advertise your newest low-sugar version,” she says. She also says attention should be called to reducing saturated and overall fat, and increasing fiber.

“Other hot-button ingredients that can potentially be added to candy and advertised are Vitamin C, Calcium, and Iron,” Wellington advises.

Au’some Candies, Inc. has certainly not been shy about calling kid attention to its Candy Decorated Fruit Snack Collection with packaging that points out, “Made with Real Fruit Juice, Fortified with Vitamin C.”

Other novelty/interactive candy companies defend their unique positioning regarding this issue. “Because our candies are really toy/candies, Kandy Kastle provides a different scenario,” explains Carol Prior, vice president of sales and marketing for Kandy Kastle Inc. “This means that in most of our products such as Big Barf/Big Burp, we really are offering the play value first, and the candy—in this case, colored dextrose balls—second.”

Meanwhile, Kandy Kastle’s parent company, Multizen, is working on making candy in a fun format with calcium and other vitamin ingredients. “Now that sugar substitutes are getting more widely accepted, I believe we will see more candy novelty companies using this approach as soon as pricing for these substitutes become cost effective,” says Prior.

So as long as they market candy responsibly, the consensus seems to be that candy makers should carry on and maintain their “treat” positioning with kids. “Nobody is too young to eat, and responsible eating can include all types of food; that’s why the candy industry should not fear the plaintiffs’ lawyers,” says MacLeod. “And although lawyers have been known to ignore the obvious, it’s hard to imagine a judge or jury believing that little trick-or-treaters don’t know the difference between treats and meals.”

But what about candy companies like CAP that maintains it really doesn’t do much advertising direct to the kid consumer? Koeppel believes it’s important today to “cut through the clutter” and reach kids through other media, especially the Internet. “TV advertising is not as cost efficient as it used to be—the Internet is taking away business from TV,” he maintains.”

Even though Topps Confections primarily reaches its main kid target (ages 6-14) through television advertising, it also does a lot of online promotions. “Kids today spend a great deal of time online—more than any adult can comprehend because we didn’t grow up with the Internet,” says Nicole Palmieri, brand manager for confections. “So we’ve found success by supporting several of our brands, such as Baby Bottle Pop, Push Pop and Bubble Gum Booster (the company’s latest offering), with contests and promotions in conjunction with Nick.com [Nickelodeon].”

Additionally, Topps’ Juicy Drop Pop has done a few promotions with Cartoon Network Toonami and WWE; the company is also branching out into athletic promotions, according to Palmieri. “Ring Pop, for example, is in its second year of a partnership with Major League Soccer, which has been successful in reaching this age group,” she says.

The bottom line is: “Kids want entertainment,” Palmieri maintains. “As the packaged good industry moves toward product placement and the immersion of products as part of the actual entertainment, it is important for candy manufacturers to do that as well. However, as marketers to kids, we are aware this must be done with great thought, and should be done in an ethical way.”

As for the obesity issue, “The idea that suddenly kids should never eat candy again to deal with obesity is wrong and silly,” says Dan Jaffe, executive vice president of the Association of National Advertisers. “The childhood obesity problem developed recently in this country while candy advertising has been going on since the beginning of our country. It’s not like some new candy has suddenly been developed, and oh, my heavens, now our kids are fat!”

“The real solution is education and parental control, not fewer advertisements,” says Jack Gordon, CEO of AcuPOLL, a market research firm based in Cincinnati. “Shouldn’t parents be responsible for what their kids eat?”

“It is certainly not the fault of candy manufacturers if parents allow them to have 10 treats a day. Kids have been asking for things for hundreds of years, and for hundreds of years, parents have known when to say no,” Goodman concludes. n

Consumer concern over unhealthy snacks/foods for kids and subsequent marketer caution appears to have contributed to a downturn in new, kid-targeted food products last year. This is after three years of steady growth.

According to new-product database Productscan Online, kid-targeted food introductions dropped 11.4 percent in 2004, even as the number of new food products grew overall. Specifically, 1,328 new bar codes for food products aimed at kids were introduced in 2004, vs. 1,499 in 2003, reports Productscan.

"The yellow flag is out on kids’ food products," says Tom Vierhile, executive editor.

And yet, that concern doesn’t really translate to the candy industry. According to Productscan Online, 924 new chocolate and non-chocolate candy products were introduced in 2004, vs. 931 in 2003. "That doesn’t exactly support a big drop in the candy industry," says Vierhile. "Consumers don’t expect candy to be healthy; it seems that the products most vulnerable to this issue are convenient snack items that are oriented to kids."

That said, "Everyone at this point is well-advised to be a little conservative in their marketing efforts aimed at kids," he adds.