The market is growing at a fast pace especially in developing economies, favouring improved industry investments to move ahead in these regions.
The U.S. and European markets will still account for a major share in terms of total revenue generated by 2015. However, these countries have little growth opportunity due to low birth rates and static market conditions. Undoubtedly, Asian countries will continue to grow almost 8 percent year after year.
The increasing number of working women and concerns about nutrition are key factors in the baby food market growth. Many parents opt for professionally-made food because of time constraints and to meet nutritional requirements of babies in different stages of advancement. For toddlers ready-made foods are used to replace or complement maternal lactation.
Understanding trends in the baby food market involves a look at the different age groups of babies, as well as products, ingredients, and health benefits.
These criteria have their own sub-segments: bottled baby food, cereals, snacks, soups, and frozen food. Looking closely at the different product segments, baby soups are at the forefront while toddler milk formula drives the baby food market.
Looking at different regions, the market is growing briskly in Asia and Latin America, while the U.S. and European markets still have the highest share in terms of total revenue generated. And, Nestlé and Danone are shaking up the global competitive landscape on the sector of baby food, pushing aside – or buying – smaller competitors.
In many countries, such as India or Indonesia, Cerelac is synonymous with packaged baby food – the strength of Nestlé’s brand recognition. With its large distribution network it launched several new flavour variants with an eye for urban areas, and uses more affordable products in smaller packages for rural areas. On the other hand, there are rumours that Danone is looking for acquisitions in India.
Prospects for potential investors in baby food products are very good worldwide. However, as forecasts suggest, the biggest markets promise to be in the Asia region with its large ever-growing population and the steadily increasing number of people with middle-class incomes. Clearly, this is the largest region for baby food sales with China, India and Indonesia helping to drive future sales.