Infant food market grows despite dealing with sensitive customers

Baby food products, available in the market, are specially designed to meet nutritional needs of babies less than three years of age.

The popularity of organized retailing has spurred the growth of the baby food market, which is growing exponentially though these products have a short shelf life and can easily spoil. Multinationals focusing on health and wellness have realized the potential of the rapidly growing baby food market and invested in it. However, retailers find it extremely difficult to sell baby food and infant formula in developed economies, because of the lack of storage facilities and high chances of the food becoming spoiled and affecting their reputation.

This report, Global Baby Food and Infant Formula Market 2014-2018, cover the growth prospects of the market. Segmented into baby food formula and infant formula, the report focuses on APAC and EMEA regions, Latin America, North America, and Europe.

Highly consolidated market

The infant nutrition industry is highly consolidated with five major multinationals holding some two-thirds of the global market. To cite an instance, two competitors, mainly Abbott and Mead Johnson, account for more than 80% of the sales in the USA. While in Western Europe, Nestlé and Danone are the major players of the infant formula market. Most of the key players in Asia are present through joint ventures and local production development. Urbanization is the major driverfor the infant formula market, especially in developing countries where increase in disposable income and adoption of modern lifestyles has led to increase in spending on baby food. Furthermore, the strong growth of the market was supported by emerging economies where global financial crisis was less severe and birth rates were still relatively high.

China - the biggest consumer of baby food

The largest baby food and infant formula market in the world is China, which is further segmented in to dry baby food (cereals and bottled baby food), ready-to-eat baby food (canned baby food and snacks) and baby juices. Rising consumer spending on baby food and infant formula has been one of the major drivers of the market, which is further bolstered by the increased working women population, rising per capita disposable income and entry of foreign players. By 2016, the market is expected to grow at a CAGR of 16.57%.

Market outlook

With the global baby boom, the baby food market will support strong volume growth. Additionally, growing popularity of premium brands with higher unit prices is expected to support sales growth, although quality continues to be consumers’ focus in baby food selection from different brands. Furthermore, key multinational players are expected to improve on their brand reputation and provide infant food formula that addresses the need of fast-paced lifestyle.

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