Despite the challenges parents face under difficult economic conditions and ever-growing constraints on their time, the quality of food they offer their young children is more important than ever. According to Consumer Reports, children may be a risk for exposure to toxins sometimes found in non- organic baby food because the process often used to condense fruits and vegetables potentially concentrates pesticide residues. Toddlers developing immune, central-nervous and hormonal systems may be particularly vulnerable to damage from those toxins, the report noted.
In Feb. 2010, Heinz recalled thousands of bottles of baby food after discovering they could contain small pieces of plastic, while in Sept. 2010, Ella’s Kitchen announced it was withdrawing some of its baby food pouches after concerns there was microbial spoiling in drinking straws. It’s no surprise then that parents are increasingly looking to organic products to nourish their children.
Organic baby food accounted for roughly a quarter of all new baby food product launches worldwide in 2009, according to a 2010 report from Canada’s Agri-Food Trade Service. In the U.S., high growth is expected for organic baby food products in the next five years with anticipated economy recovery and rising educated population, according to the report, ‘The US Baby Food and Formula Market’, from marketresearch.com
In the global baby food and pediatric nutrition marketplace, which accounted for USD $11.8 billion and $26.3 billion in 2011 respectively, understanding demographic trends is key to gaining a competitive edge, according to Transparency Market Research.
The largest numbers of babies are currently being born in areas where consumer spending is growing the fastest, and where low consumption of pediatric nutrition combined with more women entering the workplace is creating demand for more breastfeeding alternatives. Further, ongoing research suggesting the need of balanced nutrition for healthy growth and development will likely continue the drive for more healthy food choices in the demographic.
In 2011, the Asia-Pacific regional market accounted for close to 40% of market revenue, North America about 21 percent and Western Europe, 20 percent. Eastern Europe, Latin America, the Middle East and Africa took in about 20% of the market.
The Chinese market, with an increasing large middle class willing to pay a premium for better quality products, is expected to show the highest growth for baby foods in 2010–2015, A strong birth rate in India also makes it an attractive market for baby foods. More better educated Indian women are taking full time jobs, increasing family purchasing power for packaged baby food.
Transparency Market Research is estimating the Asia- Pacific, Latin America, Middle East and African markets will consolidate their positions over the next five or so years and collectively account for 60% of the global baby food and pediatric nutrition market in 2017.
Babies normally consume baby food and pediatric nutrition products from birth until age 4, while roughly 90% of children aged 0 to 4 in 2010, about 550 million, lived in less developed regions of the world. Strong marketing and distribution, as well as packaging and product variation are seen as integral to gaining competitive advantage in this sector.
The United States Department of Agriculture estimated that 2010, sales of all organic products was roughly USD $24.5 billion, a nearly 8% increase over the previous year.
Despite Canada’s slow projected birth rate, sales of baby food are projected to grow, reaching nearly CAD$537 million in 2015. Other demographic changes and shifts in consumer behaviour will likely support the demand for baby food. Continuing demand for organic food, an increasing number of new immigrants, and a reported increase in the number of children with food allergies, will all impact sales growth, according to the Baby Food Global Pathfinder Report provided by Canada’s Agri-Food Trade Service.
Economic conditions in the European market have been on a downturn, but sales of organic food in general have grown substantially over the past decade. The largest EU markets are in Germany, France, the UK and Italy, making up more than 70% of the EU’s total organic food sales, with continued growth projected to 2015.
In Germany, organic food sales are expected to grow as health-conscious parents spend more per child. One of Germany’s largest organic baby food producers, Hipp, had USD $720 million in turnover in 2011, according to spokeswoman Sandra Hohenlohe.
Against a steady decline in the U.K. birth rate over the past decade, since 2005, the baby food sector has shown steady growth and is expected to be worth over USD $1.16 billion by 2015, an 79% increase. More women moving to the workplace who are also choosing to have children at an older age, combined with an overall social acceptance in the U.K. of women who integrate motherhood with a career, is helping demand for more convenient, higher-quality products that are in some cases sold at a premium. Consumers in the U.K. also tend to use prepared baby foods longer into a child’s life than other nations. Danone Baby Nutrition U.K. reported that 1% of British infants are still on baby food by age.