Organic baby food market size
Organic Baby Food Market Size, Share & Growth Report [2028]
The global organic baby food market size was USD 5.55 billion in 2020. The market is projected to grow from USD 6.05 billion in 2021 to USD 12.22 billion in 2028 growing at a CAGR of 10.58% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of -7.46% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
This market is witnessing progressive growth due to the rising demand for organic baby food products such as milk formulas and cereals. There is an increase in the variety of organic food products available at mainstream supermarkets. Moreover, many food manufacturers are acquiring other small food businesses and promoting their lines of products. In addition, there is rapid evolution of the baby food industry and novel preparations. It is expected to increase the demand for these items in the coming years.
Worldwide Demand & Supply Imbalance amid COVID-19 to Hinder Market Growth
The baby food industry has experienced a sudden disruption amidst the outbreak of the COVID-19 pandemic due to significant shift in demand dynamics. Lockdowns worldwide have led to the shutdown of manufacturing industries in the 2nd quarter of FY 2020, which significantly reduced the demand for processed food items, including baby food products.
According to World Health Organization (WHO), disruptions were observed in health services between mid-2020 in almost 90% of the countries. Moreover, in more than half of the nations, there were disruptions in antenatal care, management of malnutrition, and sick child services in 2020. Furthermore, 70% of countries also reported disruptions in routine immunization.
Due to the factors mentioned above, supply chain management and products’ availability were deficient, impacting the sales of organic baby food products.
LATEST TRENDS
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Evolving Trend of Organic Milk Formulas to Sustain Market Development
With the increase in number of working women, consumer preference toward buying milk formulas has increased over the last few years. However, it has been observed that infant formulas with artificial ingredients do not contain the immunity-boosting elements present in breast milk. Still, organic milk formulas are developed using natural ingredients that can provide those elements; hence, consumer preference for these milk formulas is increasing. These milk formulas help in supporting babies who have specific dietary needs. A baby who has unique nutritional needs can get specialized milk formula products. With numerous benefits associated with organic ingredients, milk formulas are becoming the first choice by consumers, mainly in developed countries.
DRIVING FACTORS
Concerns Related to Child Health Stimulate Consumers to Purchase Organic Food Products
The concern about consuming artificial ingredients infused food products by infants and young children has grown over the few years. Parents have become more aware of different food ingredients and are more concerned about what their babies and toddlers consume than what they, as an adult, consume. With rapid internet penetration, parents know what’s new in the market and suitable for their kids and are ready to spend more on baby food than adult food. Moreover, the availability of organic products in smaller towns is also increasing, and this factor is playing a significant role in driving the market growth.
Organic baby food products have gained popularity mainly since the 1990s. Thus, major food manufacturers are interested in these products, considering their popularity in the baby food category. At that time, H.J. Heinz, one of the largest baby food companies, acquired Earth’s Best baby food in March 1996.
After that, Gerber launched its organic baby foods by the name ‘Tender Harvest’ in October 1997. Since then, many key players in this market have entered this market, and various products are available. This increased penetration of organic products in tier 2 and tier 3 cities has also helped the market to grow in smaller towns. This factor is also expected to prosper the market growth in the coming years.
Promotion and Marketing in Mainstream Distribution Channels Driving the Market
The market growth of organic baby food products has seen an upward trend in the last few years. The market is transforming slowly from niche category to significant industry category. The availability of products differs widely with each country depending on the market environment. In developed countries, such as Germany, the market for organic baby food products is strong as large retail chains account for about 70% of products sold in Germany. Although these products are costlier than conventional products, retailers apply higher discounts, which make the consumer buy the products.
Expansion of supermarkets and hypermarkets in tier 2 and tier 3 cities is a major driving factor for the growth of the market in developing countries as consumers are aware of the products and are buying them for the last few years. With the expansion of supermarkets/hypermarkets during upcoming years, the market is expected to boost.
RESTRAINING FACTORS
High Costs Related to Organic Products to Hinder Market Growth
The adoption rate of organic food products is comparatively slow in the developing market, mainly in South Asia and Africa. Lack of awareness and knowledge among majority consumers creates temporary demand from a limited income group. This further affects the growth of the industry. In developing countries, the concern for safe food is far away for the majority of the consumers. Majority of the developing countries are price-sensitive nations, with wide diversity in earning power. Organic food is costlier in price than conventional food products.
Consumers who are unaware of these products hesitate to spend that much on food. This vast difference between the prices poses challenges for organic products in these countries. This factor is expected to act as a significant challenge for the market growth in developing countries.
SEGMENTATION
By Type Analysis
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Wet Food Holds Major Organic Baby Food Market Share owing to Wide Range of Products Availability
The market is segmented into wet food, infant milk formula, and dry food based on type. Parents of infants and toddlers mainly prefer liquid food as they are easy to eat and digest; hence, market players also have 60-70% of products in the wet food category in their portfolio. With more players entering the market and introducing a variety of fruit flavors in puree blends, this segment is expected to retain its dominance in the type segment.
The infant milk formula segment is expected to grow with the highest CAGR as there is an increase in the working women population worldwide. As the number of working women is increasing, the need to provide more nutritionally stable food to the kids is increasing, and thus milk formulas are becoming popular. Dry food will grow with a steady CAGR as dry organic baby food demand is stable and rising slowly.
By Distribution Channel Analysis
Broader Availability of Products & Freedom to Purchase to Promote Sales via Supermarkets/Hypermarkets
By distribution channel, the market is segmented into supermarkets/hypermarkets, specialty stores, online sales channels, and others. Supermarkets/hypermarkets are expanding rapidly. Supermarkets are now limited to only rich consumers, and over the past few years, supermarket chains have been spreading from wealthy areas of big cities to much smaller towns. Rising incomes, rapid urbanization, increase in female participation in the labor force, and adoption of western culture are the major factors that are helping the supermarkets industry to expand so rapidly.
The factors mentioned above would prevail in the coming years, and thus this segment is expected to dominate the market during the forecast period.
The online sales channels segment is expected to grow with the highest CAGR owing to easy accessibility due to the increasing internet penetration worldwide. Specialty stores and other segments will experience slower growth owing to lower discount offers.
REGIONAL INSIGHTS
North America Organic Baby Food Market Size, 2020 (USD Billion)
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North America remains the dominant region in the market due to significant market players and higher spend capacity of consumers in these regions. Booming organic food sector in the region has contributed to the increasing demand for several baby food products. In addition, leading brands are also using strategic activities to increase the sale of their line of baby food products in these regions.
The entry on newer, smaller players is intensifying the market competition in the region
Europe is expected to record a notable CAGR, owing to the growing demand for clean-label and sustainable baby food products. Consumer preferences regarding baby food have shifted toward buying safer, healthier, and organic products over the past few years. Thus, the increasing demand for organic, non-GMO, lactose-free, and plant-based products will drive the regional growth over 2021-2028. Many consumers in Europe are willing to pay a premium price for organic baby food products. They are aware of the positive impact on personal health, environment, food safety, taste, and appearance of organic products and have higher spending capacity.
Asia Pacific is one of the fastest developing regions owing to changing consumer preferences towards organic products. Increasing disposable incomes of consumers and changing lifestyles are driving organic product consumption. Moreover, the expansion of the supermarket sector across developing Asia Pacific countries will strengthen the regional outlook.
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The markets in the Middle East & Africa and South America will record slow growth in the market owing to lower penetration of organic products. Brazil is anticipated to dominate the market share in South America. In the Middle East & Africa, the increasing lifestyle of middle-income groups is expected to boost the market with steady market growth.
KEY INDUSTRY PLAYERS
Nestle Focused on Expanding Its Line of Organic Baby Food Products in New and Developing Markets
Nestle is a major player in the baby food industry with its portfolio having a wide variety of products. Nestle is continuously looking to expand its reach in newer markets globally and bolster its presence in the market. In 2019, Nestle India launched an organic product within its Ceregrow brand of cereals. These products are specially made for children over the age of 12 months and are made using 100% organic wheat, milk, ragi, and rice.
The organic baby food market growth is expected to escalate as infant food products are expected to expand into more households. Considering this factor, Nestle is looking forward to making the most of it by strengthening its market position in the developing markets. Apart from this, other market players are also looking at India as a prominent market. In January 2021, India’s baby food brand “Timios” unveiled a new manufacturing model expected to meet the demand for organic baby products. It launched 12 varieties of baby porridge range aimed at babies and toddlers between 6 and 18 months.
LIST OF KEY COMPANIES PROFILED:
- Kraft Heinz Canada ULC (Illinois, U.S.)
- Nestlé S.A. (Vevey, Switzerland)
- Danone S.A. (Paris, France)
- Plum Organics (California, U.S.)
- HiPP GmbH & Co. Vertrieb KG (Pfaffenhofen, Germany)
- Pristine Organics Pvt Ltd. (Bengaluru, India)
- Yashili International Group Co.
, Ltd. (Guangdong, China) - GMP Dairy (Auckland, New Zealand)
- Arla Foods (Central Denmark Region, Denmark)
- Kewpie Corporation (Tokyo, Japan)
KEY INDUSTRY DEVELOPMENTS:
- April 2021 –Happy Family Organics launched a new pouch line, Happy Baby Savory Blends. These products are specially made for infants and toddlers over 6 months.
- March 2021 – Sun-Maid Growers of California acquired Plum Organics, which is a leading premium, organic baby food, and kid’s snacks brand from Campbell Soup Company. Through this acquisition, Sun-Maid is focusing on strengthening its market position in the baby food industry.
REPORT COVERAGE
An Infographic Representation of Organic Baby Food Market
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The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product distribution channels.
Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Report Scope & Segmentation:
ATTRIBUTE | DETAILS |
Study Period | 2017-2028 |
Base Year | 2020 |
Estimated Year | 2021 |
Forecast Period | 2021-2028 |
Historical Period | 2017-2019 |
Unit | Value (USD Billion) |
By Type |
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By Distribution Channel |
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By Geography |
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S. (By Distribution Channel)Organic Baby Food Market Size, Share
2022
Organic Baby Food Market
P
by Product (Prepared Baby Food, Dried Baby Food, Infant Milk Formula, and Others) and Distribution Channel (Supermarkets/Hypermarkets, Pharmacies, Department Stores, E-Commerce, and Others): Global Opportunity Analysis and Industry Forecast, 2022-2031
COVID-19
Pandemic disrupted the entire world and affected many industries.
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The global organic baby food market size was valued at $8,715.0 million in 2020, and is estimated to reach $34,818.7 million by 2031, registering a CAGR of 13.7% from 2022 to 2031.
The outbreak of the COVID-19 diseases and its rapid spread across the globe resulted in the implementation of the lockdown measures by the government. The lockdown rules implemented by the government resulted in the supply chain disruptions and the complete or partial closure of the manufacturing facilities and retail stores had adversely impacted the global organic baby food industry to a certain extent. However, there was a sudden spike in the sales of the organic baby food owing to the panic buying due to the stay at home orders by the government
The organic baby food is gaining rapid traction among the baby boomers across the globe owing to the surging awareness regarding the health benefits of organic food products and rise in health consciousness among consumers.
The organic baby food products gains steady share in the retail sector. The easy availability of organic baby food across the popular sales channels, such as supermarkets, hypermarkets, e-commerce, and departmental stores significantly fosters the market growth across the globe. Various government initiatives related to organic food production, increase in working women, and growth of nuclear families propel the organic baby food market growth. However, due to certain government regulations with respect to labeling of these organic baby food products and the premium price of the products hamper the growth of the organic baby food market.
The organic food products are gaining rapid traction among consumers, especially in the developed markets of North America and Europe. According to the Organic Trade Association, the U.S. witnessed a huge spike in the demand for the organic products in the U.S. in 2020, with an all-time high sales of organic products that exceeded $60 billion.
Therefore, the increased awareness regarding harmful effects of the conventional chemically processed products on the environment and the human health has significantly surged the demand for organic products, especially among consumers. Furthermore, the strict regulations and certifications pertaining to the organic food and beverages ensure the safety and authenticity of organic products, which further supports the growth of the global organic baby food market.
According to the organic baby food market analysis, the market is segmented on the basis of product, distribution channel, and region. On the basis of product, it is divided into prepared baby food, dried baby food, infant milk formula, and others. On the basis of distribution channel, it is bifurcated into supermarkets/hypermarkets, pharmacies, department stores, e-commerce, and others. On the basis of region, the market is analyzed across North America (U.S., Canada, and Mexico), Europe (Germany, France, UK, Italy, Spain, Russia, and rest of Europe), Asia-Pacific (China, Japan, India, Australia, South Korea, and rest of Asia-Pacific), and LAMEA (Brazil, Argentina, United Arab Emirates, South Africa, Saudi Arabia, and rest of LAMEA).
Organic Baby Food Market
By Product
Prepared Baby Food segment held the major share of 72.2% in 2020
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On the basis of product, the prepared baby food was the leading segment, garnering around 72.2% of the organic baby food market share in 2020. The prepared baby foods are rich in vitamins and include antioxidants, which nurture a baby’s health, thus, driving parents to purchase these nutritional products. Owing to increase in working women and growth of nuclear families, customers tend to prefer the less processed prepared food for their baby to avoid effects of harmful chemicals.
On the basis of distribution channel, the e-commerce is expected to be the fastest-growing segment during the forecast segment. The easy accessibility offered by online platforms boosts their adoption in the organic baby food market, thus becoming a popular medium for the purchase of organic baby food. Easy availability of information about ingredients used in organic products, time-saving feature, and the facility of home delivery contribute to the growth of online sales.
Organic Baby Food Market
By Distribution Channel
Supermarkets/Hypermarkets segment held the major share of 30.8% in 2020
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On the basis of region, North America was the dominant organic baby food market in 2020. Change in lifestyle patterns of consumers and increase in participation of women in workforce fuel the market growth. Parents prefer to feed organic baby products to their infants, as they contain all the necessary nutrients, iron, vitamins, and proteins necessary for baby’s growth.
The key players operating in the market include Abbott laboratories, Nestlé S.A., Hero Group, Amara Organics, Danone, Plum organics, The Hein celestial group, North Castle Partners, LLC. HiPP, and Baby Gourmet Foods Inc. Market estimations of each segment support to analyze the key investment pockets of the industry.
Organic Baby Food Market
By Region
2031
North America
Europe
Asia-pacific
Lamea
North America segment held the major share of 33.
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Key Benefits for Stakeholders
- The report provides an extensive analysis of the current and emerging organic baby food market trends and opportunities.
- The report provides detailed qualitative and quantitative analysis of the current trends and future estimations that help evaluate the prevailing organic baby food market opportunities in the market.
- The organic baby food market forecast is offered along with information related to key drivers, restraints, and opportunities.
- The market analysis is conducted by following key product positioning and monitoring the top competitors within the market framework.
- The report provides extensive qualitative insights on the potential and niche segments or regions exhibiting favorable growth.
Organic Baby Food Market Report Highlights
| Aspects | Details |
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| By Product |
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| By Distribution Channel |
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| By Region |
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S., Canada, Mexico)
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The global organic baby food market provides lucrative opportunities to market players, owing to rise in awareness about the consumption of organic foods, especially in Asia-Pacific and LAMEA. Plum Organics and Earth’s Best offer different variants of purees and vegetable & fruit blends, which contain organically-grown ingredients. Moreover, parents prefer organic baby food due to low or no chemical content as compared to conventional baby foods and as they help in providing nutrition. Major players in the market are developing various techniques to spread awareness about the benefits of organic baby foods, thereby increasing the market growth.
The labor workforce of women has increased over the past few years due to rise in literacy rate. The ratio is estimated to increase in the near future, owing to the supportive government policies. The ease and convenience provided by these baby products offer parents lesser time in manual preparation of baby foods and simultaneously take care of the babies, which is expected to boost the market growth during the forecast period.
Furthermore, the rise in penetration of e-commerce channels in the baby food market provides a regular revenue stream to the organic baby food manufacturers. The e-commerce platforms, such as Happa and Pristine, who specialize to provide organic baby food are expected to penetrate in the market at a rapid rate and contribute to the market growth during the forecast period.
Market analysis of manufacturers of pureed baby food products
Authors : Kovalenko Irina Alexandrovna, Prudnikova Anna Sergeevna
Category : Economics and management
Posted in young scientist #19 (361) May 2021
Publication date : 05/07/2021 2021-05-07
Article viewed: 77 times
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References:
Kovalenko, I.
A. Market analysis of manufacturers of puree-like canned food for baby food / I. A. Kovalenko, A. S. Prudnikova. - Text: direct // Young scientist. - 2021. - No. 19 (361). - S. 119-121. — URL: https://moluch.ru/archive/361/80847/ (date of access: 30.10.2022).
The article describes the features of the choice of baby food by consumers, which is based on canned fruits and vegetables, the dynamics of manufacturers in the market of the Russian Federation. According to the research, the factors influencing the development of the market as a whole are noticed.
Keywords :d baby food, puree, product, demographic situation, country, assortment, product quality.
During the dynamic development of the market system, the baby food segment is actively gaining momentum and occupying its niche. Without being tied to the difficult economic situation in Russia, there is a satisfactory growth dynamics in the share of the food industry engaged in the production of food for children.
Canned fruit and vegetable purees, as well as juices, have always been in demand among different groups of the population. Giving preference to a product with a minimum amount of artificially synthesized components that have a positive effect on the development of the child. The sale takes place through the channels of both retail and wholesale trade, occupying one of the key places among essential goods [1].
The importance of market monitoring lies in the continuous expansion and replenishment of the product range with new positions. The introduction of innovations to increase demand is driven by the rapid development of technology, as well as the variability of consumer requirements and preferences.
The main factors influencing the expansion of the baby food market, in particular viscous fruit and vegetable, are:
— unfavorable ecological situation in the country;
— growth of material security of the population;
- the desire to save time, in connection with the employment of the population;
— socio-demographic;
- advice from doctors and other specialists.
An important factor in Russia today is an unforeseen change in the demographic situation. It is connected, first of all, with a change in the lifestyle of young people who prefer to build a career rather than start a family.
It is important to trace the demographic situation in the country from 2010 to 2020. Thus, according to Rosstat, 2010–2011 was marked by a negative population growth. The main reason was the crisis conditions, which did not allow providing for their children in full. In the future, from 2013 to 2015, natural growth increases. The main influence was exerted by the demographic policy pursued by the Government of the Russian Federation [5].
In the future, in 2016–2020, population growth again falls to a critical point. This is due to a change in the moral and moral attitudes of the population in the direction of improving education. Meanwhile, the influence of religious and traditional foundations, preserved after the collapse of the USSR, is decreasing [5].
Starting from March 2020, the large-scale spread of coronavirus infection, there has been an increased demand for essential products, among which baby food has been included in the lists of citizens. The threat of food shortages pushed people to stock up on everything they need.
Conducted research and surveys of Russian residents made it possible to establish a list of more frequently purchased brands. The diagram shows the main factors influencing the choice of baby food by the consumer (Figure 1).
Rice. 1. The main factors influencing the choice of baby food
When choosing baby food, 79% of buyers are guided by the composition (in particular, the absence of preservatives and artificial additives) and price, 82% - by hypoallergenicity, 69% of consumers proceed from the taste preferences of the child. The biggest indicator is the quality of the product (93%). The main requirements include: natural composition, absence of sugar, as well as a rich vitamin complex [2].
It should be noted that it is baby food in the form of puree that occupies a segment of 3.5% of purchased essential goods.
Table 1 shows the rating of popular baby food manufacturers, which is based on selection criteria [5].
Table 1
| brand | Manufacturer | Rating | Product Feature |
| hipp | Germany | 9.8 | Raw materials for production are grown on organic farms and plantations. Strict quality control starts with the soil and seeds. Baby formulas, complementary foods: purees - fruit and meat, fish and vegetable and meat and vegetable menus, soups, cereals and drinks, including those for digestion (carrot-rice broth) - the entire range of baby food meets the requirements of the development of babies. Hipp food products are formulated with special technology, contain natural ingredients and are guaranteed for children of any age. The company produces vitamin-enriched milk formulas (dry) for dietary nutrition that do not cause allergies [4]. |
| Gerber | USA | 9.3 | Manufacturer, on the market for almost 100 years. Deservedly has good reviews from moms around the world. The company's products are represented on the Russian market by more than 80 items. The range includes single-component and multi-component purees in fruit and vegetable jars, meat products, juices and desserts. The high quality of products is ensured by the observance of technology and adherence to standards [3]. |
| FrutoNanny | Russia | 9 | It is a more affordable analogue among its competitors, having a wide range in its arsenal. |
| Nutricia | Holland | 8.6 | A popular brand for the preparation of baby food, designed for babies from the first birthday to 3 years old. Nutricia specializes in baby food, making dry milk formulas. The company offers three product lines of baby food: "Baby"; "Baby"; Nutrilon. Nutrilon differs in that it contains special elements necessary for premature babies, as well as for children with indigestion, children with low weight and diet therapy, etc. "Baby" and "Baby" are made without sugar, do not contain preservatives and dyes, they contain important elements and vitamins: iron, zinc, prebiotics, etc. |
| Heinz | USA | 8.4 | The manufacturer offers a variety of baby purees, cereals, juices, for the most demanding customers, and all with the help of a multifaceted selection of flavors. But in connection with the pricing policy, it did not find huge popularity among the inhabitants of Russia. |
It is very popular among the inhabitants of Russia, thanks to the ratio of price and quality. In addition to the production of fruit and vegetable purees, juices, it produces cereals, water, and dairy products under its own brand [4]. 
[4] Based on the rating and consumer surveys, the most popular manufacturers can identify the following positive qualities:
- Hipp - excellent quality, the best taste;
- Gerber - Impeccable composition and quality of the product;
— FrutoNyanya — the best Russian manufacturer, the best value for money;
- Nutricia - modern production technologies, the best quality of the product;
- Heinz - a wide range, good value for money.
Based on the data obtained, it can be concluded that the baby food market, in particular fruit and vegetable-based puree-like canned food, is rapidly developing. New competitive products that have no analogues are being developed. Regardless of the declining birth rate, baby food will be a necessary and in-demand aspect of the lives of many buyers who value their time.
Literature:
- Zakharashvili S.G. Analysis of consumer preferences when choosing baby food // Young scientist. - 2021. - No. 1. - S. 235–238.
- Ivanchenko O. V. The specifics of marketing activities in the baby food market // Scientific and methodological electronic journal "Concept". - 2015. - T.30. — P.486–490.
- The best manufacturers of baby food [Electronic resource] / Enotznaet. — Access mode: https://enotznaet.ru/collection/luchshie-proizvoditeli-detskogo-pitaniya/#1–9— (date of access: 04/30/2021).
- 12 best manufacturers of baby food [Electronic resource] / MarkaQuality - Access mode: https://markakachestva.
ru/rating-of/1142-luchshie-proizvoditeli-detskogo-pitaniya.html - (date of access: 05/03/2021). - Official data of the Federal State Statistics Service [Electronic resource] / Rosstat. — Access mode: https://rosstat.gov.ru/ — (date of access: 05.05.2021).
Basic terms (automatically generated) : baby food, demographic situation, product quality, russia, choice of products, resident of russia, huge popularity, food product, usa, wide range.
Keywords
range, children food, demographic situation, country, product, puree, product qualitybaby food, puree, product, demographic situation, country, assortment, product quality
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Baby food market analysis
Baby food is a product that most Ukrainian families face at different times. It is used as a supplement or replacement for breastfeeding for children under 3 years of age. According to the recommendation of the WHO (World Health Organization), up to 6 months the child should receive exclusively mother's milk, after which the diet is allowed to be supplemented with baby food.
The importance of this product is explained by the fact that it contains such important components for the child as proteins, fats, carbohydrates, vitamins and microelements. While in breast milk this balance can be disturbed due to the influence of negative environmental factors.
As a percentage of body weight, infants eat and drink significantly more than adults.
Therefore, baby food is balanced in such a way that the child's body receives as many useful substances as possible and at a minimum of excess organic mass.
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Analysis of the baby food market: dynamics of production and consumption
The following categories of products are present on the Ukrainian baby food market:
Qualitative and quantitative indicators of the baby food market are determined by a number of factors, including the level of purchasing power of the population, birth rates, availability of domestic production and prices for raw materials.
According to open data on the website of the State Statistics Service of Ukraine, in 2015-2017, 1 million 172 thousand children were born in the country, which gives us general information about the quantitative composition of product consumers.
Using the data of the State Statistics Service, it is possible to draw conclusions about the volume of consumption of baby food, using the formula: “Consumption = Production + Import - Export”.
Analyzing the graph, we can draw several conclusions:
- Since the crisis year of 2014, there has been a decrease in the consumption of baby food, associated with a decrease in the purchasing power of the population and the birth rate. The latter factor plays a lesser role, since with a drop in the birth rate from 503.7 thousand people in 2013 to 465.9thousand in 2014, the level of consumption during this period increased.
- In 2013-2015, there is an increase in the production of baby food in Ukraine, with a decrease in its imports and an increase in exports. The decline in production volumes in 2015 was replaced by a sharp increase, which is explained by an increase in demand due to lower inflation and improved purchasing power of the population.
A Nielsen study reports an increase in sales in 2017 by 16.4% in physical terms, and by 8.9% a year earlier. In monetary terms, the figures increased by 19.1% and 14.3%, respectively. The company's analysts attribute this primarily to a decrease in inflation in this category from 5% to 2.4%. If we take into account the growth in the volume of imported products, which are more expensive than domestic ones, we can also talk about the consumer's desire to purchase better products and focus on popular Western brands.
Read also: Children's goods market analysis
Other trends in the Ukrainian baby food market identified by Nielsen analysts include the following.
- The largest segment in physical terms (52.8% of total sales) is children's water. However, in monetary terms, the market share in 2017 was only 6%. The annual growth of indicators was 18.6% and 22.1%, respectively.
- In monetary terms, the largest market share (41.
1%) is milk formulas, which figure in physical terms is 18.7%. - Viscous baby food showed the highest growth in 2017 (31.3% in monetary terms and 17.4% in physical terms). These figures are almost identical to their market share - 31% 17.5% respectively.
According to the State Statistics Service, the production of baby food in January-August 2018 amounted to 4879 tons, showing an increase of 41.8% compared to the same period last year.
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Baby food research: export and import
The largest exporters to Ukraine are the EU countries, which in 2017 supplied our country with 5529.3 tons of baby food (Poland - 2336.5 tons, Switzerland - 1286.9 tons, Germany - 641.8 tons, the Netherlands - 523.1 tons, Slovenia - 340.9 tons, Croatia - 163.5 tons. Also important and suppliers are Belarus – 236.4 tons, New Zealand – 37.
6 tons and Israel – 20.6 tons. baby food.There is also a noticeable increase in shipments from Israel and New Zealand.
Ukrainian manufacturers are not yet very actively developing foreign markets, as can be seen from the graph.
The infographic points to two things.
- 2012 maximum. Almost a tenfold increase in exports was ensured by actively increasing the supply of baby food to the countries of the former USSR - Kyrgyzstan, Azerbaijan, Moldova, Turkmenistan and Armenia. The following year, only Moldova remained among the importing countries of Ukrainian products, joined by the Russian Federation.
- Gradual increase in exports since 2013. The association agreement with the EU did not significantly affect the foreign trade in baby food. It is still difficult for our manufacturers to compete in the European market.
At the same time, it manages to hold on to traditional markets. In 2017, exports to Moldova amounted to 233.7 tons, to Vietnam - 203.
5 tons, to Georgia - 23.2 tons and about 15 tons to Azerbaijan and Turkey. Small batches of baby food were shipped to Hong Kong and China.
The most successful work was to enter the UAE market. If last year only 14.4 kg of baby food was supplied there, then as of August, exports to the United Arab Emirates amounted to 1.7 tons. Therefore, analysts recommend that Ukrainian food producers concentrate their efforts on the promising markets of dynamically developing countries in Africa, as well as in Southeast Asia and the Middle East.
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Baby food market insights: retail sales figures and leading baby food manufacturers
As already mentioned, domestically produced products dominate the baby food market. However, it should be noted that the share of imports in the market is quite high - 45% in physical terms and 50% in numerical terms.
These graphs show that most often baby food is purchased in large retail chains.
It is also noticeable that sales through specialized children's stores and pharmacies have a more noticeable disproportion between the share of sales in physical and price terms. Entrepreneurs charge a higher price, taking advantage of the effect of trust on the part of the buyer. That is, parents, making purchases in pharmacies and children's stores, are less afraid to purchase counterfeit and expired goods.
The smallest segment of the market in terms of price is occupied by other channels. This is primarily about online trading. By reducing operating costs, entrepreneurs have the opportunity to reduce the price, which allows them to successfully compete with offline stores and pharmacies.
The leader of the Ukrainian baby food market is the HIPP trademark. In the All-Ukrainian rating "Favorite Success", in which annually, based on the results of consumer and expert voting (40% / 40%), as well as taking into account the opinions of Ukrainian stars (20% of votes), the best manufacturers in different categories are determined, the brand is consistently included in the top three leaders.
For 13 years of the competition (since 2006) children's breakfasts HIPP 9once won first place. The brand is also leading in the current competition. TM HIPP always gets the highest rating.
The Nestlé brand can be ranked second in the ranking for all the years. He won twice in the overall ranking and consistently takes second place in the vote of buyers (except for 2016 - 3rd place).
If the consumer is largely guided by the price of the product, the experts are guided by quality characteristics. Most often in this category (4 times) won products under the brands "Malysh", "Malyshka", "Malyutka" PJSC "Khorol Milk Canning Plant for Children's Products". This allowed baby food under these brands to enter the top 3 of the overall ranking three times.
Based on the results of the "Favorite Success" rating, we will determine products for price comparison in Kyiv supermarkets.
Each manufacturer manufactures its products according to its own unique technologies, including different ingredients and adhering to their different proportions, and it is not entirely correct to compare baby food from different brands with each other.
Therefore, the table shows the price range for two categories of baby food: fruit, vegetable and meat purees, as well as cereals and milk formulas.
The table shows approximately the same minimum prices for the products of the most popular brands. The maximum prices in some cases differ for the reason that some retail chains have premium products in their assortment.
It is also obvious that the reason for the popularity of products of Ukrainian manufacturers is a more affordable price. As can be seen from the cost of FOZZY private label baby food, the price difference between the products of our own production and the goods of TM "Malyatko" is not significant. Therefore, most retail chains prefer to pay more attention to private label products with higher margins. In addition, the consumer perceives baby food primarily as a balanced set of vitamins and microelements necessary for the full development of the child. Therefore, most parents prefer well-known brands with a long-term reputation.
Despite the fact that about 50% of consumers express their desire to purchase private label baby food in retail chains, its share in total sales does not exceed 1% in monetary and physical terms.
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Top brands: an analysis of market players
HIPP
An international company founded in Germany in 1932, specializing in organic farming. The company formulates its philosophy as "production of the highest quality products in harmony with nature".
The first products under TM HIPP entered the Ukrainian market in 1992, and in 1996 the first representative office of the company in Ukraine was registered. Today, 263 HIPP products are available to the Ukrainian consumer, 65 of which are milk formulas, cereals, and teas.
The logo is the brand name in soft, childish colors.
The color palette of the logo clearly indicates the target audience of the brand.
This color scheme is often used in children's animation, as well as advertising aimed at the parent audience.
The slogan often used with the logo is “The Best of Nature. The best for nature. The slogan eloquently characterizes the brand's philosophy - the production of environmentally friendly products without harm to the environment and for the benefit of consumers.
Nestlé
A global brand with over 150 years of experience in quality baby food. The company was founded by the Swiss pharmacist Henri Nestlé, who in the mid-19th century invented infant formula as an alternative to mother's milk.
Today, baby food brands include Nestogen (baby formulas), Gerber (fruit and vegetable juices and purees) and Nestlé proper (baby cereals).
The brand's logo is one of the most recognizable in the world.
It reflects the company's philosophy of producing natural products for the whole family. The image of a mother bird feeding her children in the nest evokes associations with care, comfort, and naturalness.
The slogan "Good food, good life" sounds like a listing of brand values and a call to action.
Nestlé works smartly with the target audience. The main Ukrainian site tells in detail about the history of the brand, the values of the company, and educational work is being carried out to promote the culture of healthy eating and lifestyle in general. A separate website has been created especially for mothers, where, in addition to a detailed description of the company's assortment, practical advice is given on the formation of the diet of the child and mother.
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Khorolsky Plant of Child Food Foods (TM Malyutka, Malysh, Malyshka)
The only manufacturer of baby and special food in Ukraine specializing in the production of products for newborns. Founded in 1972 in the city of Khorol, Poltava region. In 2016, a large-scale modernization of production facilities was carried out in accordance with international standards.
Today, the company's products occupy about 60% of the market in physical terms and about 40% in terms of money. The company's baby food is sold in more than 15 thousand outlets throughout Ukraine. The daily turnover of products is more than 10 tons.
The range of products includes milk formulas "Malyutka" - 3 items, "Malyutka Premium" - 6 items, "Kid" - 4 items, mixtures, "Malyshka" - 5 items. The company also produces milk and butter for cooking meals for children.
Brands do not have logos as such. Cartoon rounded fonts are used for packaging design.
The company's philosophy is expressed in the slogan “Our. Ukrainian. Overridden by fates. In this way, the brand appeals to the patriotic feelings of the audience, while also making a promise of proven quality.
The company's website presents a range of products, tells about the history of the company. Like most competitors, the management of "KhZDPH" is actively working with the audience.
One of the menu items is the Malish club. This is an information page for mothers with helpful tips on childbearing, dietary choices, and more.
The baby food market in Ukraine is developing in line with the general economic dynamics, demonstrating a gradual growth trend. The fall in prices for products in recent years was due to a change in the structure of production towards juices and a reduction in the share of technologically complex products. However, domestic producers should invest in the modernization of production, advanced training of personnel and scientific research. Since, with the growth of the welfare of the population, the consumer will give preference to better and healthier baby food. This trend can be seen in the growing popularity of craft and organic products.
Several factors will positively influence the development of the industry.
An increase in the birth rate and an increase in immigration against the backdrop of an increase in living standards in the country will expand the target audience of baby food.
