A few years ago, kid consumers would have been hard-pressed to find faith-based product at their local mass retailers. But it’s a much different picture today. The distribution coverage for this category has widened exponentially, and the market generated a whopping US$4.63 billion in sales in 2006, the last year that the Association for Christian Retail (the CBA) conducted their bi-annual measurement. And interestingly, kids product has triggered a lot of this growth.

Some argue that faith and values have become much more important to kids in the wake of major disasters like 9/11 and Hurricane Katrina, as well as in response to the prevalence of tough personal issues like divorce and cancer. And the research seems to bear this out. In a recent survey conducted by Jonesborough, Tennessee-based research and consulting firm Smarty Pants, 27% of kids said they cared more about what God thinks of them than their peers (10%), siblings, teachers or coaches (3%) and themselves (23%), proving that many kids are passionate about their faith.

They’re also making more decisions at a younger age, and ‘we’re realizing that a lot of them really don’t know how to make good choices because they don’t have a moral framework,’ says Dr. Mary Manz Simon, an Odenton, Maryland-based children’s market analyst. ‘They don’t have a clear sense of what’s right and what’s wrong.’

Dr. Simon has been active in the children’s Christian retail space for 20 years, serving at times as a consultant to major entertainment companies including Walden Media and HIT Entertainment. She heads up a popular children’s product workshop at the CBA’s International Christian Retail Show (ICRS), an annual event that took place in Orlando, Florida in July and typically hosts more than 9,000 attendees.

United Media’s Susan Meek, who works on the company’s Precious Moments brand as VP of licensing, describes ICRS as ‘the Christian version of Licensing Show,’ where attendees and exhibitors can network with other domestic and international industry players. She and UM brand director Cindy Slocki used this year’s event to pitch Precious Girls Club, a brand extension for girls four to eight launching at card and gift, specialty and mass channels in August.

Through research and focus groups, United Media discovered that today’s moms prioritize raising good kids higher than providing them with a college education, representing a drastic shift in values from research they’d conducted in the past. This led to the creation of Precious Girls Club, which celebrates girlhood with inspirational messages and plays on the Christian values of being a good person.

The jewelry line, for example, offers virtue charms (a star with the message ‘Being responsible makes me a star’) and talent charms (a pink bullhorn with the message ‘I cheer because I care’). The brand plan calls for a safe online world with controlled social networking, games, downloads and virtual shopping. And to complement United Media’s publishing program with Dalmatian Press, Meek and Slocki are looking for licensee partners in all categories, particularly toys, apparel and accessories.

Precious Moments, which celebrates its 30th anniversary this year and has an 89% awareness with US moms, began as a collection of drawings of teardrop-eyed children in the gift channel. Its creator, Sam Butcher, was a man of faith, and his 1,500-plus characters convey the loving, caring and sharing that embody Christian values.

But for every Precious Moments, Dr. Simon says there are many other properties that enter the market, make a few stabs at gaining traction and then exit quietly with nothing to show for the effort. Her point is that it’s not as simple as slapping a bible verse on product and calling it Christian. For example, to be considered Christian, the content behind a property needs to contain some reference to Jesus Christ as Lord and Savior, whereas product that simply references God is considered inspirational. And although Christmas and Easter are key Christian market selling periods (along with back-to-school and May for graduation gifting), Santa Claus and the Easter Bunny have no business on these niche shelves because they aren’t part of how the Christian culture defines these holidays.

In general, product should have a solid, moral framework, with no questionable language or sexual innuendo, and it should respect the need for biblical accuracy. Though the boundaries of acceptability have widened over the last few years, particularly for the tween/teen market, product still needs to reflect Christian values to get play on shelves.

That older youth demographic represents a definite opportunity for anyone looking to enter the Christian market. Both Dr. Simon and Kelly Graham, a kids buyer for Texas-based Prestonwood Bookstores, say there is a product void there – especially for tween boys. Graham has recently been expanding her stock of kids product in one of the chain’s three locations, and says she also finds customers are more open-minded than they used to be, so she’s not shy these days about bringing in licensed book lines that embody general educational and wholesome values, such as Little Einsteins and Corduroy.

In terms of what the distribution opportunities are for faith-based product, the CBA currently counts more than 2,000 retailers as members. Roughly 55% of these are independent retailers, 31% are chains, and the other 14% is made up of church, camp and campus bookstores. This Christian retail sector is dominated by Christian Family Stores, which has more than 300 locations, and 125-store chain LifeWay. Both players are full-service bookstores that sell a range of Christian and inspriational product.

Leslie Ferrell, GM for Big Idea, which owns Christian bestseller VeggieTales, says that about 50% of the company’s merch business is done through CBA stores, which include chains and independent channels across the US and Canada, while the other half is done at mass.

Like most specialty streams, Christian retail’s main competitive advantages are product knowledge and customer service. ‘The Christian market has traditionally been built on a sense of trust relationships,’ says Dr. Simon. ‘Parents know that something coming out of the CBA market is going to be OK for their kids.’ Christian retailers also have the means to devote more shelf space to certain product categories. For example, Ferrell’s CBA stores can carry as many as 30 Christian DVD titles at any given time, whereas mass retailers will only stock the top four or five titles, switching them up every four months in keeping with chain-wide resets.

But those resets do have their advantages because consumers are always seeing the freshest product on shelves. So mass channels, which can offer wider distribution, cheaper price-points and broader audience reach, are definitely worth developing for Christian merch programs.

Big Idea has come up with its own strategy for these channels. It targets consumers by conveying VeggieTales’ general good values on product rather than referring to the property as Christian. For example, lessons in handling fear are prominently displayed on the front case of a DVD title with a non-denominational description on the back. The mass channel is also helpful when Big Idea does theatrical releases with promotional opportunities.

But beyond Christian specialty and mass tiers, there are some unexpected accounts that also do quite well with Christian product. United Media partnered with apparel manufacturer Mighty Fine on a Precious Moments fashion t-shirt featuring three girls from different ethnic backgrounds and the tagline ‘Love is Colorblind.’ The SKU sold well at Urban Outfitters because of its vintage appeal, and the company is now looking for more opportunities in the mainstream specialty market. Ferrell has found that drug and grocery chains are becoming profitable streams for its DVD business. She says these buyers are starting to see the revenue benefits of developing larger, more comprehensive home entertainment sections because moms are there every week.

Big Idea’s planogram for the 15th anniversary of VeggieTales this year will certainly leave no retail account untapped. The effort kicks off over the summer with the rollout of an anniversary re-release of the property’s first home video title, Where’s God When I’m S-Scared?, followed by new book titles from Random House, expanded toys (Blue Box), plush (Pint Sized Productions), puzzles (Talicor), holiday items (Dicksons) and toddler/youth apparel (Crossroads Apparel). Supporting the effort is a 10-week, 40-city God Made You Special touring stage show making its way throughout the US and Canada from September to November.