Kids meal meltdown - demand for kid's frozen meals drops - Inside the News

Prepared Foods, Oct, 1993 by John Dyslin

The heat is on manufacturers of frozen meals for kids, and a key player--Tyson Foods--gets out of the kitchen.

Frozen dinners for kids had all the potential and promise of youth. During the 1980s heyday, both parents were working, time was precious and families were on the go. There was little time for traditional sit down dinners prepared by mom.

The success of frozen dinners and entrees prompted manufacturers to target the so-called "latch-key kids" with frozen meals geared toward kids. Initial sales in 1989 for ConAgra's Kid Cuisine and, in 1990, for Tyson's Looney Tunes were encouraging. But, the promise these products displayed quickly melted under the heat of an economic recession.

As a result, Tyson discontinued its Looney Tunes dinners citing declining sales figures since its introduction. ConAgra's Kid Cuisine struggles as sales slumped 10% for the 12 week period ending July 11, according to Information Resources Inc. However, ConAgra says Kid Cuisine's velocity (product turns) is up 25%. Also, ConAgra's Snoopy's Choice failed after its introduction in 1991. The lone bright spot is Campbell's Swanson Fun Feast, up nearly 4% for the same period.

What caused the slump for a product line many thought would be a $300 million category today? The reasons are many, beginning with the recession. Others include product value, nutritional concerns, too many players, unrealistic expectations and the battle among frozen food players for the adult market. Promotional efforts such as couponing, 2-for-1 specials and other sale tactics often made adult meals cheaper than kids meals.

The dinners also suffered from poor marketing and were too discretionary an item in a recessionary economy. Marty Friedman, editor of New Product News, suggests product character tie-ins and toys were geared to too young an audience and not to older kids who are allowed to use the microwave.

Tyson had the most obvious cartoon-character tie-in with its licensing agreement with Warner Bros. for the use of Bugs Bunny and gang. While Bugs' popularity spans generations, he wasn't able to help Tyson make Looney Tunes a frozen meal success.

Children five to nine years old comprise ConAgra's target audience for Kid Cuisine, according to Pat Quarles, company spokeswoman. The frozen dinners are geared for adults to prepare a quick meal that kids enjoy. Quarles says promotional efforts will be accelerated with increased couponing, and nutritional programs involving retailers and schools.

Campbell Soup Co. also intends to stay in the market, according to Gary Fassak, vice president of marketing, frozen foods group. He says Fun Feast is successful, in part, because the company had realistic expectations for the market.

"High expectations and multiple entrants over several years hurt the industry. Now, for the first time, the entry level is on hold and a sustaining level of business is forming in this product category," Fassak says.

Mark Lagrois, product manager, Tyson Foods Co., believes there is a market for frozen kids dinners despite Tyson's exit. "The scope of the opportunity just wasn't great enough for as many competitors as were in there," he says. "You definitely have to offer the right price value and understand the category is a niche. It's hard for a parent to spend $2 for a frozen dinner when 50|cents~ for a can of Spaghettios will do."

Quarles believes the market can sustain $300 million in business because Baby Boomers are having kids late. The market may be stabilizing from its two-year slide, but questions linger about the category's viability.