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Goo-Goo-Ga-Ga on the Go: Convenience Drives Baby Food and Formula Growth

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From the pureed food on spoons to the formula in bottles, you’d be hard pressed to find a parent who didn’t want the best for their baby. And they’re willing to spend for it. In fact, Nielsen estimates global baby food and formula sales will reach nearly $35 billion in 2015*.

But for baby care manufacturers, there’s plenty at stake in the battle for baby bucks. Globally, births are declining across all regions. Between 1960 and 2013, birthrates around the world declined 45% on average, according to the World Bank. But there are still opportunities in the baby care market. Over 80% of the world’s population lives in the developing world, and while global birthrates have steadily decreased across all regions and economic levels over the past 55 years, they remain highest in developing countries. In addition, rapid urbanization, the growth of the middle class and rising rates of female participation in the labor force in many developing markets has encouraged the adoption of convenience-oriented lifestyles, making baby formula and prepared baby foods more desirable.

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Today, 87% of global baby food and 66% of baby formula value sales come from North America and Europe, but developing markets are driving growth, with sales increasing 7% for baby food and 20% for formula over the 12 months ending December 2014. In particular, value sales grew 4% over the previous year in Africa/Middle East, 3.4% in Asia-Pacific and 2.6% in Latin America. By comparison, value sales in Europe and North America were flat over the same period (+0.1% and -0.1%, respectively), and volume sales also stagnated or declined in many countries in these regions.

In the baby formula category, developing-market growth was even more impressive. In the 12 months ending December 2014, value sales grew by double-digits in Latin America (46.8%) and Africa/Middle East (13.4%). These regions also have some of the fastest-growing markets in terms of formula volume sales. In Europe, value sales grew 5.6%, but volume sales were mixed, while several markets showed strong growth, more declined.



In terms of packaging, products in tubs or glass make up the vast majority of global baby food value sales (87%). But when it comes to growth, pouches (containers with plastic spouts at the top from which foods can be sipped) are all the rage, with value sales increasing 28% between December 2013 and 2014. In fact, pouches grew by triple digits in the Ukraine (916%), Brazil (528%), Portugal (316%), Russia (264%), the Netherlands (184%) and Spain (125%). In the U.S.—the largest pouch market by a wide margin—sales grew 7% over the previous year. Sales for products packaged in tubs or glass, on the other hand, were flat worldwide and declined in the majority of markets analyzed, including the U.S. (-2%).

“The popularity of pouches is largely driven by their ease and flexibility, ” said Liz Buchanan, director, Global Professional Services, Nielsen. “Pouches provide convenient, portable nutrition that’s extremely compatible with consumers’ on-the-go lifestyles, and they promote self-feeding and independence.”

Meanwhile, the organic sector is also experiencing strong growth. Global value sales increased 26% over the past two years, while non-organic products declined 6%. North America is the largest organic market, accounting for 72% of value sales over the past 12 months.

“Consumers are increasingly health conscious and looking for natural, minimally-processed foods, and the stakes are even higher when it comes to their babies” said Buchanan. “More parents are seeking foods that set their children up for a healthy life—even if it comes at a premium. We expect this segment will continue to grow as more parents can afford to trade up.”


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Other findings include:

  • Word-of-mouth communications is the most commonly cited source for information about baby food/formula.
  • Sixty percent of global diaper value sales come from North America and Europe, but the most rapid growth is happening in developing countries.
  • Asia-Pacific leads global respondents who say they purchase baby care products online.
  • Skin protection and comfort are the most important diaper purchase considerations among global respondents.




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