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Takeaway: Emerging differences between America’s youngest generation and their parents create a host of brand opportunities.

Here's a preview of the next issue of "About Everything." You're welcome to join a Hedgeye Q and A on this topic today at 2:00 pm.

Kids these days: Homelanders

WHAT’S HAPPENING?

Say hello to the generation of kids coming after Millennials—we call them the Homeland Generation. But you may have heard them called by other names: “Generation Z,” “Plurals,” “iGeneration,” or even “Founders” (thanks to MTV).

How old are they? Opinions differ on that as well. Some say that the oldest of this generation are already hitting their late teens. We disagree, because that would cut Millennials short. History shows that every generation ends up around 20 to 22 years long—which means that we pull forward the Homeland Generation’s first birthyear all the way to 2004 or 2005.

Thus, the Homeland Generation is still being born, and includes anyone age 11 and under. A generation’s location in history can often be described by identifying the era it just missed. Homelanders are the kids who will remember nothing before the Great Recession or President Obama.

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But marketers need not worry: The generational personality of Homelanders is already emerging—complete with vast new opportunities for companies ready to meet their wants and needs.

HOW PARENTING IS CHANGING

Broadly speaking, Gen Xers are overcompensating for their own neglected, go-it-alone childhoods by sticking close to their kids (“attachment parenting”) and fiercely sheltering them from every potential danger. And now that first-wave Millennials are becoming parents, they are doubling down on protection as well.

We’ve gone beyond the baby monitors that sat next to every Millennial crib. Many Homelander children don’t go anywhere without a GPS tracker in their back pockets.

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This hyper-protection theme is making major inroads in consumer spending.

Baby care: It’s about quality, not quantity. While the number of babies has been falling since the Great Recession, the baby care industry has been bolstered by the rise of high-quality upstarts. The big mainstays like Johnson & Johnson (JNJ) and Gerber (VTX: NESN) are losing market share to firms like Plum Organics (CPB), Ella’s Kitchen (HAIN), and Earth’s Best (HAIN). Today’s popular baby food is less “mashed carrots” and more “Thai Curry Vegetables.”

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Quite simply, these brands promise products free of GMOs, preservatives, and additives. It’s no surprise that U.S. spending on organic baby food is projected to hit $783.9 million in 2017—up from $613 million in 2013.

Many parents are even whipping up their own baby food. Homemade purées now account for one-third of all baby food consumed in the United States.

It’s not just food that’s getting a facelift, either. Premium brands of all types are now expected to offer a quality option for children. Bloomingdale’s (M) houses brands like Vince and Vintage Havana that specialize in kids’ casualwear.

Trend-riding firms: Hain Celestial Group (HAIN), Campbell Soup Company (CPB), Macy’s (M)

 

Parenting trends: social-emotional learning (SEL). Today’s bestselling parenting books all have one thing in common: Hit titles like The Whole-Brain Child, The Conscious Parent, and How Children Succeed encourage parents to cultivate their child’s emotional intelligence and help their children learn social skills.

First and foremost, Homelanders are taught to be kind, considerate, and courteous. It’s a far cry from the qualities that parents once taught to Millennials (teamwork, confidence) or Xers (pluck, resilience).

This social-emotional push is creating a generation of Homelanders who may soon start leaving thoughtful notes in their parents’ lunches, not the other way around.

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HOW SCHOOLS ARE CHANGING

SEL in the classroom. Some states and localities are ditching formal lessons in favor of “purposeful play”—a process in which teachers subtly guide students to learning goals through games, art, and general fun.

This play can even take the form of “builder” games like Minecraft. In these games, Homelanders can compartmentalize their environment while building a world to their—or their teachers’—specifications.

Children are also encouraged to be mindful of their fellow students. They are taught to acknowledge and reward classmates’ good behavior—or to “fill their buckets,” in educational parlance.

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Homelanders are taught to get along with anyone and everyone. When teachers and counselors see two kids playing together, some will intervene and encourage them to hang out with other kids in larger groups. With only one buddy, a child can’t be “well rounded” (a term now coming back into vogue).

A movement toward conformity. For the past 15 years, more public schools have been requiring students to wear uniforms. While part of this is a continuation of a Millennial trend, uniforms are also showing up in preschools and child-care centers. In fact, sales of toddler uniforms actually doubled between 2008 and 2009.

Why? Yet again it’s all about sheltering and inclusion—themes that were rising for Millennials but have now grown into overwhelming priorities for Homelanders. Gen-X parents, teachers, and school board members want to suppress social competition: When everyone dresses alike, there are fewer opportunities for bullying.

HOW ENTERTAINMENT IS CHANGING

Monitoring and regulation. Parents are closely monitoring what their kids watch. Platforms like Netflix Kids (NFLX) and YouTube Kids (GOOGL) promise age-appropriate content—and allow parents to keep tabs on their kids’ viewing habits. 

The same goes for devices like the Amazon Fire HD Kids Edition, which allows parents to set usage limits and educational goals. When children reach their daily limit, the device powers off so kids can move on to other activities.

Trend-riding firms: Alphabet (GOOGL)

Prepackaged content. Many Homelanders are flocking to dedicated kid-friendly YouTube channels. DisneyCollectorBR features an unseen woman opening packages of children’s toys and narrating the process in a soothing voice. Another top YouTube channel, Evantube, stars a young boy opening, putting together, playing with, and rating toys with his dad.

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Homelanders have no problem with adults openly creating content designed for them. Yes, adults have always created content for kids. But when young Boomers read Dr. Seuss, the purpose was to allow kids to explore a topsy-turvy world on their own. Today, the parent is back, looming and guiding.

NEW CONTENT THEMES

Family is omnipresent. Parents and siblings aren’t just supporting characters in kids’ programming—they take an active role in the lives of main characters.

In PBS’s Sid the Science Kid, both of Sid’s parents sing songs of their own to teach concepts to their son and his friends. In Disney’s (DIS) Doc McStuffins, the main character strives to be a medical doctor—just like her mother.

A quick sidenote: Today’s kids are flocking to healthcare toys. Whether through a Hasbro (HAS) Doc McStuffins playset or a Drill ‘N Fill dental kit, Homelanders love playing medical professionals tasked with helping to comfort those in need.

And protective parents show up in many forms. In the new Disney series Elena of Avalor, both grandparents assist the young princess as she makes decisions affecting the entire kingdom. In PBS’s Dinosaur Train, the lead character is a Tyrannosaurus rex that is adopted by a family of Pteranodons.

Back in the ‘80s, Nickelodeon touted itself as the kids-only zone—no parents allowed. Families were virtually invisible in kids’ programming. But today, family is everything.

There are some social critics who argue that this focus on family is a growing problem. Author Robert Putnam asserts that, while the general public was once held responsible for the outcomes of “our kids,” today’s Xer-led families are only concerned with “my kids”—which has paved the way for an increasingly fragmented society of “haves” and “have nots.”

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Trend-riding firms: Disney (DIS), Hasbro (HAS)

 

Friendly little problem-solvers. Disney’s Sheriff Callie’s Wild West takes place in a small town called Nice and Friendly Corners, where Sheriff Callie works with her friends to make the town “the friendliest in the West.” The titular character in Sofia the First is a big-hearted optimist who loves to give warm hugs.

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Emotion is clearly a central theme in Homelander programs. In fact, in Disney’s Inside Out, emotion is both the plot and the cast of characters. (The film features the interplay between a young girl’s personified emotions like “Joy” and “Sadness.”)

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Many of these shows are framed around a mission. This trend first started with Millennials, whose characters would encounter a problem and solve it using teamwork. Homelanders have inherited this mission-centric content, but with a new twist: The characters are typically given a goal and end up solving someone else’s problem.

Bye bye, reality. Late-wave Xers grew up watching cartoons and sitcoms that dealt with difficult real-world situations like bullying, divorce, and substance abuse. Today, by contrast, the reigning idea is that Homelanders should be kept away from the unthinkable—not introduced to it.

Many Homelander shows thus take place in worlds that are either pure fantasy or have magical elements. In Sesame Street, Abby Cadabby is a fairy with magical powers. Cartoon Network’s Adventure Time takes place in an almost dreamlike world. Nick’s Bubble Guppies follows a group of merkids that go to a school taught by a fish.

This distance from the harshness of the real world mirrors the children’s entertainment for the Silent Generation during the 1930s. While the Silent weathered the Great Depression with Winnie the Pooh in the Hundred Acre Wood, Homelanders have been getting through the Great Recession with their own fantasy characters.

BROADER IMPLICATIONS

Homelanders represent more than just the culmination of Millennial trends. The Millennial focus on collaboration and friendship is intensifying to the point that it is transforming into an emphasis on emotional awareness. Homelanders’ magical spaces to explore their feelings likely will cause them to develop a greater capacity for introspection later in life. Indeed, the new parental and school emphasis on being helpful and nice may ultimately leave Homelanders burdened, later in life, with a lot of repressed feelings they were never allowed to show.

TAKEAWAYS

  • Homelanders, America’s youngest generation, are being shaped by parents devoted to protecting them—whether by way of organic baby food, social-emotional curricula and games, or kid-friendly programming.
  • Homelander entertainment themes mirror this generation’s identity. Programs feature families of all types, are completely detached from reality, and involve characters solving problems in the most amicable way possible.