July 29th, 2008

FTC: Kids Target of $1.6 Billion in Food Ads

By Kevin Freking
The Associated Press

The nation’s largest food and beverage companies spent about $1.6 billion in 2006 marketing their products — especially carbonated drinks — to children, according to a Federal Trade Commission report.

The report, to be released Tuesday, stems from lawmakers’ concern about growing obesity rates in children. It gives researchers new insight into how much companies are spending to attract youth to their products, and what venues the companies are using for their marketing. To come up with its estimate, the FTC used confidential financial data that it required the companies to turn over. An executive summary of the report was obtained by The Associated Press.

Overall, the spending was less than some previous estimates had indicated. Still, it represents a large pot of money that is being used to entice children to foods that are often unhealthy choices, said Sen. Tom Harkin, D-Iowa, who had sought the study.

“This study confirms what I have been saying for years. Industry needs to step up to the plate and use their innovation and creativity to market healthy foods to our kids,” Harkin said. “That $1.6 billion could be used to attract our kids to healthy snacks, tasty cereals, fruits and vegetables.”

The commission studied spending directed at children ages 2-17. Spending on soda marketing came to $492 million, with the vast majority of that spending directed toward adolescents. Restaurants reported spending close to $294 million, which was divided about evenly between children and adolescents. For cereals, companies spent about $237 million with the vast majority of that amount targeted to children under age 12.

The 44 companies reviewed spread their marketing across all segments of the media, the commission found. Television ads provide a theme that usually carried over to packaging and displays in stores, and to the Internet where entry of a code on the package allowed them to participate in games or contests with prizes.

For example, Superman Returns and Pirates of the Caribbean were prominently linked to many food products last year. Companies created limited edition snacks, cereals, waffles and candy based on the movies. They offered prizes on the Internet to buyers of those products that ranged from video games to trips to Disney to a $1 million reward for the capture of villain Lex Luther.

“The Internet — though far less costly than television — has become a major marketing tool of food companies that target children and adolescents, with more than two-thirds of the 44 companies reporting online, youth-directed activities,” the commission report said.

The FTC made several recommendations as part of its report.

_It said that media and entertainment companies should limit the licensing of characters to healthier foods and drinks. Also, it says media companies should limit ads placed on children’s television program to healthier food and beverage products.

_It encouraged schools to adopt meaningful nutrition standards for the foods that are sold there, and it recommended that companies cease all in-school promotion of products that don’t meet such standards.

_Companies that market food and drinks to children should expand public outreach efforts to educate children about the importance of healthy eating and exercise, with particular attention aimed at minority populations that are disproportionately affected by childhood obesity, the commission added.

In December 2005, the Institute of Medicine concluded that marketing practices from the food and beverage industry are out of balance with recommended diets for children and contribute to an environment that puts children’s health at risk. The institute recommended that companies shift their advertising to emphasize food and drink that are substantially lower in calories, fats, salt and sugars.

The commission noted that its review came during a year in which food and beverage companies had committed to curtailing the marketing of unhealthy products. For example, it noted that 13 companies representing more than two-thirds of advertising spending directed toward children had pledged to not direct their ads to children under 12 — unless the foods met specific nutritional standards. 

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