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Atlanta, GA, United States, 2008/07/30 - The children's food and beverage market is gaining interest as childhood health problems reach high levels and functional foods awareness increases. TSG believes the market is sustainable and will continue to grow at double digit rates.
TSG today announced the release of an overview of the strategic opportunities in the rapidly growing children’s food and beverage market. The children’s food and beverage market in the United States will reach 26.8 billion by 2011, and is expected to by heavily shaped by mergers, acquisitions, and consolidation.
The children’s food and beverage category is garnering interest as an area of high growth and innovation due to wellness issues and pressures. Healthy and functional foods are becoming mainstream, and due to increasing obesity rates and other health problems among children, parents will want to confer healthy habits to their kids. TSG believes that the market is sustainable and will continue to grow at double digit rates beyond 2012 in the U.S. and in the remainder of the G8 countries.
The largest individual segment of the market is beverages, for their versatility on several accounts including incorporation of vitamins and functional ingredients, and flexible time of consumption. 134 kids’ beverages were launched in the U.S. in 2006. Beverages encompass several popular categories such as dairy, juice, and water where incremental ingredient innovation warrants margin premiums. According to Panna Sharma, Managing Partner and CEO of TSG, “Health will be the main driver of the children’s food and beverage market, bolstered by innovations in four key areas: packaging, fortification, taste, and trust.”
In addition to obesity, other areas such as hyperactivity, brain function, gut health and immunity are garnering interest with regards to potential benefits a change in diet can offer - particularly with the aid of functional ingredients such as probiotics and omega-3 fatty acids. Poor diet’s negative impact on these elements of children’s health is also beginning to be acknowledged, as regulatory bodies such as the Better Business Bureau and public school districts are initiating bans on advertising of unhealthy foods to children.
The global food and beverage giants are joining with advertising initiatives set up by the Better Business Bureau and other organizations, and are also infusing health into their portfolios by altering existing products and exploring new options in functional and other areas of innovation. Furthermore, new companies are emerging to fill the gap in the market by providing healthy and trustworthy products for kids from reliable sources.
The study details examples of 25+ new products within each category of innovation: packaging, taste, fortification, and trust. TSG believes that the children’s food and beverage market is an attractive area with sustainable growth potential, and that large and emerging companies should consolidate their capabilities strategically in order to build a sector leader. The complete study can be accessed on TSG's website (URL below).
TSG (tsg-partners.com) is a specialty advisory group that combines growth strategy and corporate finance to create shareholder value for companies in the life sciences, biotechnology, healthcare, and wellness sectors. TSG’s approach is based on a combination of independent analysis of the markets and customer needs and a deep appreciation of the technology landscape and capital markets environment. TSG’s focus on growth aims at bringing together growth strategy and transaction insight to build sector leaders. TSG has presence in Atlanta, Boston, New York and Silicon Valley and was founded in 2001 by Panna Sharma.