From the September 2008 issue of Startups

Thanks to the massive green movement, the eco-friendly children's products industry is exploding. Other industry and demographic factors are at play, too. Toys from China are being recalled for lead violations, toxins have been found in plastic baby bottles, and the U.S. is experiencing its largest baby boom in 45 years. Combine all that, and you've got incredible opportunity, says Lauren Schnell Davison, an organic lifestyle coach and founder of OrganicGreenMommy.com, an all-in-one green parenting website.

For parents, safety ranks first. So organic and nontoxic food, apparel, feeding products, diapers and toys top the list. Even in an economic slump, Schnell Davison says there will always be a demand for these everyday items. "You can't raise a child without these must-haves,"?she says. "Just make sure they're safe and nontoxic."

In addition, parents are more conscious of their impact on the environment. Terra Wellington, author of The Mom's Guide to Growing Your Family Green: Saving the Earth Begins at Home, stresses the importance of being green at all levels, pointing to innovative packaging, sustainable suppliers, extended product lifespan and recyclability, and honest marketing.

Safety and the environment are at the core of Sarasota, Florida-based OBLI Organics, which specializes in children's clothing. Sisters Michelle Young, 38, and Melissa Blanco, 32, launched OBLI following two cases of breast cancer in their family. They started researching what they were putting in and on their bodies, and their concern naturally shifted toward their children. "Parents always want the best for their kids, but organic clothing still isn't easily accessible," says Young, who projects 2008 sales of about $75,000. Though she cites a 300 percent increase in spending on organic fashion in recent years, Young says there's little knowledge about textiles. Fortunately, she adds, "the people in [this industry] are very willing to help."

Heather Stouffer, founder of Mom Made Foods in Alexandria, Virginia, got help via tips from her chef brother and feedback from other health-conscious moms. "I knew there had to be a fresher food option that didn't jeopardize quality," says Stouffer, 34. So she and her husband, Craig, 33, launched the frozen organic children's food company in 2006. Soon after, they snagged a deal with Whole Foods. This year they announced a deal with Target and expect to see sales grow significantly. "There's always room to improve in this space, but you need to be very savvy, especially with food," says Stouffer, pointing to regulations and certifications.

Most experts say this isn't a fad, but some predict oversaturation. Wellington sees the next five years as the best time for entrepreneurs to establish themselves in the industry because they're "much more nimble than the big companies steering giant cargo ships in the green direction."