Baby Food Market

THE GROWING BABY FOOD MARKET

A multibillion dollar industry has been made by the business of feeding the young babies and infants in recent years. Due to increasing numbers of women that are working and growing parental concerns about modern- day time constraints and nutrition, industry-processed baby food plays a significant role now more than ever in meeting the nutritional demands of infants and toddlers worldwide. The industry saw several transformations in recent years, mainly fuelled by parents’ lifestyles as well as their growing interest in food, especially organic foods. The kitchen shelves of parents are filled with professionally designed foods fill in various flavours of solid forms and liquid for customers from as young as six months to as old as two years. Urban cities like Bangalore ,Mumbai and Delhi have a higher consumption of baby food. The manufacturers have been introducing more variants, for example, the Cerelac Shishu Aahar etc in local flavours since the majority of the customers continue to believe that home cooked food is healthier than packaged baby food.

This allows manufacturers to reach out to tier II and tier III consumers which prefer to feed their babies with homemade food.

Also, the introduction of such products in increased availability at lower prices and smaller pack sizes is likely to encourage the taking up of baby food, especially by tier III cities consumers. Since the past few years, Nestle India Ltd has been maintaining the lead with a value share of 69 percent in 2014. Through its leading brands including Lactogen, Cerelac, Nan, Nestum and Nestogen, the Company has continued to leverage on. Additionally, the company has introduced new variants such as the Wheat Mixed Vegetable which are perceived to provide complete nutrition for infants and babies to expand its Cerelac portfolio. The launch of new variants also helped the company to offer more choices to consumers. Even though the sector of baby nutrition is often stricter for hygiene and safety regulations, new products and technologies as well as the changing profile of its end- there is a bright future for companies specializing in baby food predicted.

There is hardly any other sector which is predicted to experience the same boost in the

upcoming years.

“Global Baby Food and Infant Formula Industry Forecast to 2016 – Asia: An Emerging Market for Organic Baby Food” is a study which gives a comprehensive analysis of the baby food industry demands and trends all across the world and even by geography. The major findings that were important are:

• India and China are fast expanding emerging economies wherein the baby food market is seeing intensifying demand.
• A potential destination for baby food manufacturers is India as it has a huge untapped market.
• A major concern in India for baby food manufacturers is pricing, where only one fourth of the population belongs to upper middle class and high class.
• The second largest baby food market and infant formula market in the world is China and is the largest one in Asia.
• Since the past few years, a number of large and small new baby food companies have been introducing high quality baby food products to meet the market need for quality baby food products.

THE GROWING BABY FOOD MARKET

• The global baby food and formula industry grew at a CAGR of 4.17 percent from 2006-2011 and between 2011-2016 is expected to register 5.30 percent CAGR to reach USD 47.00 billion mark.
• Global formula milk retail sales grew by 3.64 percent in 2011. Since 2006 to 2011, the segment recorded CAGR of 3.25 percent.
• From 2006-2011, the total baby food segment in the world grew at a CAGR of 5.88 percent.
• North America region dominates the global baby food and formula market which contributed 28.63 percent of the industry across the world.
• From 2011, formula milk market showed stability and grew by only 2.55 percent in the US.
• Ready-to-feed (prepared) baby food category was dominated by France with a market share of 83.94 percent in 2011. Formula milk showed some signs of improvements and inclined by 0.57 percent after performing negative in 2009 and 2010 in France. From 2007- 2011, infant formula market recorded a negative CAGR of 0.28 percent.
• From 2012-2016, overall, the market for France baby food and formula is expected to grow at CAGR of 2.32 percent
• Germany formula segment and baby food accounted for 9.13 percent of the total European market, growing at CAGR 1.81 percent from 2006-2011 in 2011.
• From 2006- 2011, in India, baby food and formula market had witnessed a growth of 4.18 percent CAGR Baby food forms the largest segment and account for 50.52 percent of the total retail sales of baby food market.

Compared to 0.10 percent in the previous year, consumer spending on baby food was recorded 0.12 percent of GDP in 2011. Infant formula has recorded usual growth in volume sales of 14.08 percent in 2011 relative to the growth of 14.09 percent and 15.97 percent in 2010 and 2009 respectively.