Kraft Sours on Sweets

Jan 17, 2005  •  Post A Comment

Kraft Foods’ decision not to advertise its sugary brands to young children is likely to put a damper on the upcoming kids upfront.

While the leading children’s networks, Nickelodeon and Cartoon Network, tried to downplay the impact that a shrinking food category would have on the market, Jon Mandel, CEO of MediaCom, a leading buyer of kids advertising, said, “I think more and more people are going to go this way.”

Mr. Mandel said that at this point, Kraft’s new policy and similar policies by other food makers are worth a “single-digit” hit to the kids market, “but it could grow.”

Upfront spending in the kids market for 2004 was $700 million to $800 million.

Kraft spent more than $150 million dollars advertising products such as Kool-Aid, Oreos, Chips Ahoy! and Honey Bunches of Oats from September 2003 to September 2004, according to Nielsen Monitor Plus. Kraft spent $16.9 million of that on Cartoon Network and $14.4 million on Nickelodeon.

Those products will no longer be advertised on media viewed primarily by children ages 6 to 11, including many popular cartoon programs, Kraft said in a statement. (The company already had a policy in place not to advertise in media aimed at children under 6.)

“These are sizable numbers. It isn’t going to ruin anybody, but they’re going to have to dig a little harder to replace it,” said Aaron Cohen, executive VP and director of broadcast at Horizon Media. “If anyone else follows suit, then it starts to become more critical.”

Kraft will advertise products for kids 6 to 11 that will carry a “Sensible Solution” label indicating it’s “better for you.” Those products include Sugar Free Kool-Aid beverages, Lunchables Fun Pack Chicken Dunks and the 1/2 the Sugar Fruity Pebbles Cereal.

“We’re working on ways to encourage both adults and children to eat wisely by selecting more nutritionally balanced diets, Lance Friedman, Kraft’s senior VP of global health and wellness, said in a statement.

The Kraft move follows new nutrition guidelines proposed by the U.S. government and continued pressure from interest groups that say the advertising of unhealthy food products, particularly to children, is contributing to the high level of obesity in the country.

Last year, when the issue of advertising unhealthy food products to kids was emerging as a publicly debated issue, Nickelodeon executives said they would work with marketers and that ads for healthy foods would help to make up for any spending shortfalls.

“We’ve been in dialogue with all of our food advertisers for the last year and during our last upfront about the need to present a balanced portfolio of products, and therefore we strongly respect and support Kraft”s efforts,” Nickelodeon said in a statement last week.

Cartoon Network declined to have executives discuss the situation.

“We are in the process of reviewing and discussing with Kraft the marketing initiatives they’ve laid out. It’s too soon to know how the impact of this new marketing direction will affect our business and the marketplace,” the network said in an issued statement.

Mr. Mandel said the kids marketplace “is in a world of hurt anyway.” He said that in addition to shrinking budgets among food marketers, toymaker spending has also been soft and big retailers, such as Toys R Us, are hurting.

About the only increase in advertising he sees is Nickelodeon advertising Nickelodeon-licensed products, he said.

“[The networks] are going to claim it’s not going to affect them,” Mr. Mandel said. “They’ve never really known how to sell in a down market. It was going to be a down market before this.”