More Than Academic

The next time the school bell rings and students flood into your store, pay attention to what they buy. It may be different from what they bought a few years ago. Those teens and tweens may be handing you wadded up bills to pay for – gasp – healthier beverages.

Or maybe not. It all depends on where you are and what your local school districts are doing about school beverage guidelines – particularly those defined by the Alliance for a Healthier Generation, former President Bill Clinton and the American Beverage Association.

The agreement – which sets standards for what beverages should and shouldn’t be available in schools –developed as an almost inevitable consequence of America’s growing awareness of its growing waistlines. Politicians and pundits have railed about childhood obesity for years, with targets ranging from Lunchables to Marshmallow Fluff. In 2005, nutritionists noted that America’s rising obesity rates coincided with their rising consumption of high-fructose corn syrup. After that, it was only a matter of time before experts chose the beverage industry as the next target in the battle for fit and trim kids.

But ABA leaders – with a little help from the most popular president since John F. Kennedy – turned their time in the cross-hairs into an opportunity to lead. The Association shook hands with the Alliance for a Healthier Generation in May 2006 on guidelines that will, among other things, eliminate full-calorie sodas from schools. The goal of this landscape-changing agreement is to reduce childhood obesity and diabetes by teaching kids to eat and drink healthier products.

“We like to hope that in several years they might be looking for that bottled water or that diet drink or that mid-calorie drink when they’re hanging out at the 7-Eleven,” said Brian Herr, executive director of the Alliance.In some places, that may be exactly what happens. But – just like Weight Watchers – individual results may vary. So don’t start tossing out your Coca-Cola in favor of no-calorie beverages yet.

First, the ABA plans to finish rolling of the new guidelines at the start of the 2009 school year, so they may not have gotten to your neighborhood yet. Second, even if they have, that doesn’t mean that students who drink nothing but water, 100 percent juice and non-fat milk in school are going to stick to those same healthy choices once the school day is over.

Their reactions will depend on how school officials “frame” the new rules, according to Irwin Levin, a professor of psychology and marketing at the University of Iowa. Levin said students at schools that properly usher in the new rules will probably adopt healthier beverage habits. But if a school fumbles the transition, Levin said students could sour on healthy drinks and cling to full-calorie sodas.

More than 2,000 schools have already transitioned into the Alliance’s beverage plan, and thousands more will have to convert in the next year. Major bottlers are in the process of converting their stock to meet the calorie, nutrition and portion size constraints that the ABA agreed to. Once they have, they won’t sell anything else in schools.

Until 2009, many schools can enforce whatever metric they like. The Hickman Mills School District in Kansas City, for example, uses the Missouri Eat Smart Guidelines. The policy limits sodas to 50 percent of offered items – though it makes no distinction between diet and full-calorie sodas. According to Leah Schmidt, the district’s director of nutrition services, her students readily accepted the new policy, but she was uncertain if that behavior followed them to the mini-mart.

“Changing their habits may take a little while,” she said.But Kim Bealle, director of strategy and innovation with the consulting firm Just Kids Inc., thinks kids in some areas have already changed their habits. Bealle recently visited schools in Connecticut – where the state has implemented tougher guidelines than those agreed to by the ABA – and kids seem to be doing okay with it. Connecticut’s policy allows only five kinds of beverages to be sold in schools: water, 100% juice, juice drinks, milk and non-dairy milk products, and all drinks must submit to strict guidelines on sugars and artificial sweeteners. Bealle said the mantra of healthy beverage seemed to have made it out of the vending machines and into student’s homes.

“When I saw kids with brown bag lunches they tended to have a water, or a vitamin water or a Capri Sun,” Bealle said.

That doesn’t mean that all of the school’s health-conscious decisions went over like fireworks on the 4th of July. The state also revamped food offerings, and students disapproved of the new low-fat cookies – so much that one student leaned over to Bealle and said “Bring back the fat.”

The lesson here, Bealle said, is that kids won’t eat something if it doesn’t taste good – and that rule applies just as readily with beverages as it does with cookies, chicken strips and butterscotch pudding. She said retailers near schools could use that knowledge to lasso a loyal customer base. Kids leave school hungry, Bealle said, and stores could draw them in by stocking an after-school refueling station with healthy drinks and healthy snacks. But Bealle’s healthy-kids ambitions might collide with convenience store realities.

Jeff Lenard, vice president of communications for the National Association of Convenience Stores, said store operators have to remove a product from their shelves for each item that they add.

“Our stores aren’t accordions,” he said.
And, he said, convenience store owners have seen better-for-you ambitions fall apart before. It wasn’t so long ago, he said, that everyone was talking about organic foods, but the sales didn’t live up to the buzz.

“Everyone will say they want healthy food, and you watch what people buy and it’s often very different,” he said.

He was also wary of modifying a store’s stock to cater to the buying patterns of people too young to vote. Kids make up a small spectrum of the minimart’s customer base, Lenard said, because they spend all day on closed campuses and have little buying power. But there are exceptions to every rule. Lenard visited one store where students streamed in for breakfast, lunch and dinner.

And not every attempt at healthy food in convenience stores has flopped. Minimarts sell more bananas than they used to, and nutrition bars are stealing space from packaged sweets, Lenard said. The trend is similar in the cooler case, where diet drinks and fortified waters have gone from fringe offering to beverage staple.

The Alliance for a Healthier Generation may nudge that healthy trend forward. Herr said the nonprofit plans to speak to every industry that contributes to the calories burned or consumed by children, and he would love to see the Wawas and 7-Elevens of the world adopt policies for pedaling healthy selections to their younger consumers.

“We hope that the free market will reward those companies that are trying to do the right thing,” Herr said.

While the “right thing” for retailers might be pretty clear – stock healthy products and sell them to kids – it may be a trickier proposition for beverage companies. Crayons President and CEO Ron Lloyd said he expected most entries into the kids drinks segment to fail because they have not one, but two hurdles to trip over.First, Lloyd said, kids’ beverages need to appeal to both moms and kids by offering good nutrition, fun, and good flavor. Second, the drinks need to let kids feel as old as they want to at any given moment.

“Kids desperately crave to be a teen, but at the same time they don’t want to be prevented from being a kid when they feel like it,” Lloyd said.

He said his company cleared this second hurdle through clever packaging. Crayons uses 8 oz. slim cans adorned with bright colors, a black oval and a set of distinctive stripes that make them look like, well, crayons. When a kid wants to feel like a teen, Lloyd said, they can look at the slim-can and think of a Red Bull. When they want to be a kid, they can look at the design and think of refrigerator art.

Honest Beverages used a different design strategy with their Honest Kids line of pouched juice drinks. Founder and CEO Seth Goldman said Honest stayed away from cartoon characters or Power Rangers on their packaging. Instead, they used bright colors and pictures of fruit to give their pouches a youthful – but ageless – personality.

The design must be working. Goldman said the brand’s growth has been surprising, which could have something to do with its appeal to retailers. Goldman said Honest Kids offers stores something that many other kids’ brands don’t: a comfortable profit margin.

“This kids’ drinks channel, its one where parents will switch pretty easily based on whatever’s on sale,” Goldman said.

But, he said, parents don’t have a lot of healthy options, and that has allowed his brand to “really take off” even when the Honest Kids’ price tag can be twice that of products on the same shelf.

That same price differential, Goldman said, could keep Honest Kids from popping up in school channels any time soon, but another tea brand has taken the rush of sodas leaving school vending machines as its cue to enroll for class.

Clayton Christopher, founder and CEO of Sweet Leaf Tea, said his company added 12 oz. plastic bottles to their lineup to get the product into schools in Texas. Students can currently buy Sweet Leaf in about 30 percent of the state’s middle and high schools, Christopher said, and will soon be available in schools in Florida and Colorado.

“It’s a win-win for us,” Christopher said. “It’s not like we’re selling it at cost, (and) it also does a great job of building the brand with the young consumer.”

And it won’t be long before that young consumer is a grown-up consumer with his or her own disposable income.