Baby Food Industry Landscape
Baby food is defined as any soft, easily consumed food, other than breastmilk, that is made specifically for infants and toddlers roughly between the ages of 2-6 months to 4 years. Milk formulation, prepared food and dried food, and organic food are the different types of food available in the market to meet the nutrition requirement of the babies. Baby food has become a quintessential part of modern parenting as awareness among the consumers regarding the benefits of baby food has increased. With a large section of women participating in the workforce around the globe, baby food is increasingly being seen as a nutritional supplement to breast milk for babies from birth to 4 years. Due to this, the demand for different types of baby food is spurring from various geographical regions.
Current Scenario in Baby Food Space:
- Milk Formulation all set to grow in emerging economies.
In recent years, the demand for milk formulation has majorly being realized from the emerging countries of MEA and the Asia Pacific. The demand for milk formulation is stemming from the fact that these emerging countries are witnessing substantial growth in disposable income as well as live birth rate. A rapidly evolving economy is leading to greater purchasing power among the population. This coupled with the busy lifestyle of the working mothers are compelling them to opt for breastmilk substitutes which are not only convenient but also nutritious at the same time. In Saudi Arabia, the market has grown at an impressive rate and much of the credit goes to the government initiatives to curb the soaring prices of various baby food products that significantly facilitated the greater adoption of milk formulations among the parents. Furthermore, with Nestle set to launch a new line of milk formula in China, especially small cities, to strengthen its lead in the baby formula market, the demand for milk formulation is poised to grow at a good rate in the upcoming years.
- Packaging: Success mantra for packaged baby food
Packaged baby food like purees, cereals, rice rusks, and others have majorly gained traction among the millennial parents. The growing awareness among the parents regarding the nutrient content of the food has majorly led to the greater incorporation of various nutrients in their packed baby food products. Therefore, manufacturers are continually working towards adding value to their product ranges along with implementing a discounting strategy with the retail price. With respect to quality, functional ingredients, healthy fats, and low sugar options are the key priorities for the leading brand. Also, the type of packaging used to package baby food has emerged as one of the prime factors among the parents before deciding a particular brand. Currently, squeeze pouches and tots pouches are raging in the packaged baby food market and key players like Plum Organics and Infantino are providing their packed baby items. For Plum Organics, their Tot pouches are among the fastest-growing segments of their company’s portfolio.
- A rising propensity towards organic food
Parents, nowadays, are preferring organic baby food like never before. The rising demand for organic food is substantiated from the fact that an increasing number of products have been launched and investments have been done in the last few years, especially in the North American and European regions. Recently, in September 2019, Nestle has invested US$ 44.15 million in two organic baby snacks production facilities in Portugal to expand its product range. Seeing the potential of organic baby food in countries like Spain, new players like Smileatbaby and Mi menu has entered into the Spanish baby food market. Players like Ebro Foods are increasingly seeing Spain as the lucrative market and has acquired Bioalimentacion Infantil de Andalucia (BIA), in January 2018, to exploit organic baby food sector in the country. Along with this, Thistle, a California-based company that delivers local and organic foods, also jumped into the baby food business with the launch of Thistle Baby. In October 2018, Gerber teamed up with Walmart to test a line of organic baby and toddler foods as an alternative to home-made baby food. Thus, increasing the participation of big players along with the entrants of new players in the organic baby food segment in introducing organic baby food is set to propel the organic baby food market growth.
- E-commerce: Booming baby food sales
Booming e-commerce in both developed and developing countries is revolutionizing baby food product sales. The rising propensity of millennial parents towards buying baby food products via online stores is encouraging new players to enter into the baby food segment. In September 2017, Danone invested in French organic food startup Yooji with the intent to increase online sales of various types of baby food for the different age groups. Also, recent investments by Mumzworld and Emaar Properties to launch the new website for Saudi Arabia and UAE market is further propelling the online baby care products growth in the upcoming years, thus impacting the baby food market in the positive sense.
Conclusion:
Currently, milk formulation holds a major share in the global baby food market and is anticipated to witness the fastest growth rate in the upcoming years due to the burgeoning demand from emerging countries. With respect to baby food market trends, it is anticipated that organic baby food that is dried will flourish in the upcoming years with demand being generated from developed regions. The growing need for convenience will continue to play a central role in driving the baby food industry and will attract a lot of new entrants via online distribution channels. Thus, the market will remain competitive in the upcoming years and despite falling birth rate in developed regions, it is projected to show modest growth in the upcoming years.
