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Baby Food and Drink - US - June 2012

The $5.4 billion baby food and drink category has been steadily declining during and after the recent recession, experiencing a dollar sales drop of 10.3% between 2007 and 2011. Consumer frugality has led many to breastfeeding and feeding their babies and toddlers adult food or made-from-scratch baby food. Additionally, health-related and safety concerns have raised much skepticism and loss of consumer trust.

The baby food and drink market is forecast to continue its decline between 2012 and 2016, albeit at a lower rate than in previous years. However, the expected performance will be linked closely to new product innovation and focus, in addition to changes in demographics and increased childhood obesity. In addition, manufacturers also will need to resolve consumer safety concerns in order to restore credibility and consumer trust.

In order to provide a better understanding and recommendations for future success, this report provides an in-depth look at the baby food and drink market, including:

  • How the economy, safety and health-related concerns, coupled with a decline in innovation, are impacting sales trends for the category as a whole and in each of its segments
  • How demographic shifts, including among multicultural groups, as well as childhood obesity and its health-related conditions, are influencing future forecasts through 2016
  • An assessment of which brands are gaining, which are losing, and why, as well as where private label baby food and drink currently fits within the category and how retailers can better leverage their store brands
  • Insight into new product launches and how product claims compare to consumers’ interests and desires
  • Evaluation of TV ads, as well as online and digital promotional efforts
  • Insights from Mintel’s consumer research into the attitudes and behaviors of moms with children younger than 3 and their relation to baby food and drink, including usage and frequency, feeding behavior, purchase decision criteria, brand preference factors, other product-related attitudes, reasons for purchasing store-bought baby food and drink, and internet usage for baby-related topics

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market and forecast
                          • Safety and health concerns coupled with a slowdown in innovation and birthrates have hampered sales from 2006-11
                              • Figure 1: Total U.S. retail sales and forecast of baby food and drink, at current prices, 2006-16
                            • Category shaped by baby formula performance
                              • Figure 2: Total U.S. trend in the rate of change of dollar sales of baby food and drink at current prices, by segment 2007-16
                            • Market factors
                              • Multicultural groups are forecast to grow at a faster rate than whites, total population
                                • Figure 3: Population percent change, by race and Hispanic origin, 2006-16
                              • Hispanics will remain a strategic group for baby food and drink
                                • Figure 4: Average number of children in household, by race/Hispanic origin of householder, 2011
                              • Moms’ misrepresentation of their toddler weight may contribute to childhood obesity
                                • Figure 5: Prevalence of obesity among children/teens aged 2-19, 1976-2008
                              • Companies, brands, and innovation
                                • Larger brands lose, smaller brands show the strongest performance
                                  • Figure 6: Selected manufacturer FDMx sales of baby food and drink, 2011*
                                • Pace of new product introductions has slowed in recent years
                                  • Figure 7: Percentage change in new product introductions of baby food and drink, by claims, 2010-11
                                • The consumer
                                  • Baby food and drink category has room to grow
                                    • Figure 8: Baby formula and Baby food/baby cereals/juices usage, January 2007-November 2011
                                  • Store-bought baby food and drink wins on convenience and portability
                                    • Organic baby food still an attractive proposition for many moms
                                      • Figure 9: Reasons for using store-bought baby/toddler food, March 2012
                                    • Price is important, but convenience and health-related attributes follow closely
                                      • Figure 10: Purchase drivers for store-bought baby formula and baby/toddler food, March 2012
                                    • Nutrition labels are important; quality of ingredients worth a higher price
                                      • Consumers are brand loyal to a point; private label seen as comparable
                                        • Figure 11: Attitudes toward brands and other product-related attributes, March 2012
                                      • What we think
                                      • Issues in the Market

                                          • How can baby food and drink manufacturers better attract consumers?
                                            • How can baby food companies best fit nutritional needs for babies and toddlers, in light of the growing childhood obesity problem?
                                              • How can baby food and drink manufacturers better meet the needs of a changing multicultural population?
                                              • Insights and Opportunities

                                                • Safety concerns leave opening for reinforcing credibility and trust
                                                  • Private label: still an untapped opportunity to meet consumers’ needs
                                                    • Figure 12: New baby food and drink introductions, by name brand and private label segmentation, 2007-12
                                                    • Figure 13: FDMx sales of baby food and drink, Private Label, 2006-11
                                                  • Childhood allergies continue to spread: baby food and drink manufacturers need to keep up
                                                    • Figure 14: New baby food and drink introductions, by top claims, 2007-12
                                                • Inspire Insights

                                                    • Inspire Trend—Influentials
                                                      • Consider this
                                                        • Figure 15: Internet usage related to baby/toddler nutrition and health, by age, March 2012
                                                      • Bottom line
                                                        • Consider this
                                                          • Figure 16: Prevalence of obesity among children/teens aged 2-19, 1976-2008
                                                        • Bottom line
                                                        • Market Size and Forecast

                                                          • Key points
                                                            • Safety and health concerns coupled with a slowdown in innovation and birthrates have hampered sales from 2006-11
                                                              • Future sales dependent on demographic shifts, innovation, and rectification of health and safety concerns
                                                                • Sales and forecast of baby food and drink
                                                                  • Figure 17: Total U.S. retail sales and forecast of baby food and drink, at current prices, 2006-16
                                                                  • Figure 18: Total U.S. retail sales and forecast of baby food and drink, at inflation-adjusted prices, 2006-16
                                                                • Fan chart forecast
                                                                    • Figure 19: Total U.S. retail sales of baby food and drink, at current prices, 2006-16
                                                                  • Walmart sales
                                                                  • Market Drivers

                                                                    • Key points
                                                                      • Family structure changing—moms are still busier than ever and baby food could provide the needed relief
                                                                        • Figure 20: Liquid/powdered baby formula past 12 months usage, by marital status with children, October 2010-November 2011
                                                                      • Multicultural children make up more than half of U.S. births in 2011
                                                                        • Figure 21: Population, by race and Hispanic origin, 2006-16
                                                                        • Figure 22: Average number of children in household, by race/Hispanic origin of householder, 2011
                                                                        • Figure 23: Liquid/powdered baby formula past 12 months usage and baby food/baby cereals/juices usage, by race/Hispanic origin, October 2010-November 2011
                                                                      • Uncertain economic future continues to threaten the category
                                                                        • Figure 24: CONSUMER SENTIMENT, January 2007- March 2012
                                                                        • Figure 25: Real personal disposable income, January 2007-April 2012
                                                                    • Competitive Context

                                                                      • Baby equipment could pose a threat as “baby budgets” still tight
                                                                        • Figure 26: Population younger than 5, by race/Hispanic origin, 2006-16
                                                                        • Figure 27: Total U.S. sales and forecast of baby durables, at current prices, 2006-16
                                                                      • Breastfeeding and adult food continue to compete
                                                                        • Private label: still small, but has great expansion capacity
                                                                          • Figure 28: New baby food and drink introductions, by name brand and private label segmentation, 2007-12
                                                                          • Figure 29: FDMx sales of baby food and drink, Private Label, 2006-11
                                                                      • Segment Performance

                                                                        • Key points
                                                                          • Category shaped by baby formula performance
                                                                            • Sales of market, by segment
                                                                              • Figure 30: Total U.S. sales of baby food and drink, segmented, by type, 2009 and 2011
                                                                          • Segment Performance—Baby Formula

                                                                            • Key points
                                                                              • Safety concerns among factors that contribute to most recent declines
                                                                                • Figure 31: Attitudes toward brands and other product-related attributes, March 2012
                                                                              • Sales and forecast of baby formula
                                                                                • Figure 32: Sales and forecast of baby formula, at current prices, 2006-16
                                                                            • Segment Performance—Baby Food and Snacks

                                                                              • Key points
                                                                                • Baby Food and Snacks: the only segment with positive performance
                                                                                  • Sales and forecast of baby food and snacks
                                                                                    • Figure 33: Total U.S. sales and forecast of baby food and snacks, at current prices, 2006-16
                                                                                • Segment Performance—Baby Electrolytes

                                                                                  • Key points
                                                                                    • Baby electrolytes segment’s continued downward trend likely linked to birthrate decline
                                                                                      • Sales and forecast of baby electrolytes
                                                                                        • Figure 34: Total U.S. sales and forecast of baby electrolytes, at current prices, 2006-16
                                                                                    • Segment Performance—Baby Juice

                                                                                      • Key points
                                                                                        • Baby juice sales continue a downward historical trend linked to health and safety concerns
                                                                                          • Sales and forecast of baby juice
                                                                                            • Figure 35: Sales and forecast of baby juice, at current prices, 2006-16
                                                                                        • Retail Channels

                                                                                          • Key points
                                                                                            • Supermarkets dominate the market, but lose dollar sales
                                                                                              • Figure 36: Supermarkets sales of baby food and drink, at current prices, 2006-11
                                                                                            • Mass merchandisers and warehouse clubs also on a decline, but not as steep
                                                                                              • Figure 37: Attitudes toward brands and other product-related attributes by baby food and drink usage, by feeding behavior, March 2012
                                                                                            • Supercenters and warehouse clubs sales of baby food and drink
                                                                                              • Figure 38: Supercenters sales of baby food and drink, at current prices, 2006-11
                                                                                            • Other channels have been declining the least, almost with a flat performance from 2010-11
                                                                                              • Source: Mintel
                                                                                            • Sales of baby food and drink, by channel
                                                                                              • Figure 40: Total U.S. sales of baby food and drink, by channel, 2009 and 2011
                                                                                          • Retail Channels—Natural Supermarkets

                                                                                            • Key points
                                                                                              • Sales of baby food and drink in the natural channel
                                                                                                • Figure 41: Natural supermarket sales of baby food and drink, at current prices, 2009-11*
                                                                                                • Figure 42: Natural supermarket sales of baby food and drink, at inflation-adjusted prices, 2009-11*
                                                                                            • Leading Companies

                                                                                              • Key points
                                                                                                • Leading companies experience minor losses, but maintain market share
                                                                                                  • Smaller companies show strong performance
                                                                                                    • Manufacturer sales of baby food and drink
                                                                                                      • Figure 43: Selected manufacturer FDMx sales of baby food and drink, 2010* and 2011*
                                                                                                  • Brand Share—Baby Formula

                                                                                                    • Key points
                                                                                                      • Enfamil and Similac focus on formulas that meet specific needs
                                                                                                        • FDMx sales of formula still recovering from contamination concerns
                                                                                                          • Manufacturer sales of baby formula
                                                                                                            • Figure 44: Selected FDMx brand sales of baby formula in the U.S., 2010* and 2011*
                                                                                                        • Brand Share—Baby Food and Snacks

                                                                                                          • Key points
                                                                                                            • Gerber expands organic and pouches offerings
                                                                                                              • Smaller companiess still a small share of the market, but post strong gains
                                                                                                                  • Figure 45: Selected FDMx brand sales of baby food and snacks in the U.S., 2010* and 2011*
                                                                                                              • Brand Share—Baby Electrolytes

                                                                                                                • Key points
                                                                                                                  • Pedialyte and private label lose dollar sales; flat on market share
                                                                                                                    • Manufacturer sales of baby electrolytes
                                                                                                                      • Figure 46: FDMx brand sales of baby electrolytes in the U.S., 2010* and 2011*
                                                                                                                  • Brand Share—Baby Juice

                                                                                                                    • Key point
                                                                                                                      • Juice remains the smallest segment of the baby food and drink category
                                                                                                                        • Manufacturer sales of baby juice
                                                                                                                          • Figure 47: FDMx brand sales of baby juice in the U.S., 2010* and 2011*
                                                                                                                      • Innovations and Innovators

                                                                                                                        • Key points
                                                                                                                          • The pace of new product introductions has slowed in recent years
                                                                                                                            • Figure 48: New baby food and drinks introductions, by top claims, 2007-12
                                                                                                                          • Focus of new product introductions shifts significantly from 2007-11
                                                                                                                            • Figure 49: New baby food and drinks product launches, by subcategory, 2007-12
                                                                                                                          • Baby fruits and veggies evolve in shape and texture
                                                                                                                            • The focus continues to be on shelf-stable products
                                                                                                                              • Figure 50: New baby food and drinks product launches, by storage type, 2007-12
                                                                                                                            • Gerber leads new product launches, but lost share and dollar sales
                                                                                                                                • Figure 51: New baby food product launches, by top companies/top brands, 2007-12
                                                                                                                              • Private label accounts for one in five introductions
                                                                                                                                • Figure 52: Name brand and private label baby food and drinks, by share of new product introductions, 2007-12
                                                                                                                            • Marketing Strategies

                                                                                                                              • Overview
                                                                                                                                • Geber focuses most on TV advertising; recently expands to social media and mobile applications
                                                                                                                                  • Rigorous TV advertising includes both baby formula and baby food
                                                                                                                                    • TV ads for baby formula focus on breast-milk-like immunity and nutrition
                                                                                                                                      • Figure 53: Gerber good start gentle, TV ad, “What’s best for baby,” 2012
                                                                                                                                      • Figure 54: Gerber good start protect, TV ad, “Baby Einstein,” 2012
                                                                                                                                    • Baby food TV ads tout balanced nutrition, as well as portability for snacks
                                                                                                                                      • Figure 55: Gerber Graduates, TV ad, “Perfect balance,” 2012
                                                                                                                                      • Figure 56: Gerber Graduates, TV ad, “Graduate Grabbers” 2012
                                                                                                                                    • Gerber branches out via mobile applications and a flourishing Facebook page
                                                                                                                                      • Enfamil emphasizes quality and safety checks for damage control
                                                                                                                                        • TV ad meant to bring back “peace of mind”
                                                                                                                                          • Figure 57: Enfamil Formula, TV ad, “Peace of mind,” 2012
                                                                                                                                        • Commitment to kids with metabolic disorders
                                                                                                                                          • Facebook page focused on creating a “Mom” community
                                                                                                                                            • Beech-Nut focuses on home-style wholesome meals
                                                                                                                                              • Figure 58: Beech-Nut home-style baby food, TV ad, “Wholesome Meal,” 2012
                                                                                                                                            • Facebook page provides feeding advice and features deals and coupons
                                                                                                                                            • Baby Food and Drink Usage and Feeding Behavior

                                                                                                                                              • Key points
                                                                                                                                                • Baby formula and baby food usage continue historical decline
                                                                                                                                                  • Figure 59: Liquid/powdered baby formula past 12 months usage, January 2007-November 2011
                                                                                                                                                  • Figure 60: Baby food/baby cereals/juices usage, January 2007-November 2011
                                                                                                                                                • Most popular feeding method combines store-bought formula/food with made-from-scratch food or breast milk
                                                                                                                                                  • Figure 61: Baby food and drink usage by feeding behavior, by age and income, March 2012
                                                                                                                                                • Opportunity to increase multiple times a day usage for store-bought baby food
                                                                                                                                                  • Figure 62: Frequency of feeding baby/toddler by type of baby/toddler food, by age, March 2012
                                                                                                                                                • More Hispanic parents use organic baby food; blacks present an untapped opportunity
                                                                                                                                                  • Figure 63: Organic food/baby food usage, by race/Hispanic origin, October 2010-November 2011
                                                                                                                                              • Reasons for Using Store-bought Baby/Toddler Food

                                                                                                                                                • Key points
                                                                                                                                                  • Store-bought baby food and drink wins on convenience and portability
                                                                                                                                                    • Organic baby food still an attractive proposition for many moms
                                                                                                                                                      • Figure 64: Reasons for using store-bought baby/toddler food, by age, March 2012
                                                                                                                                                  • Purchase Drivers

                                                                                                                                                    • Key points
                                                                                                                                                      • Price is important—but convenience remains crucial
                                                                                                                                                        • Health-related and brand attributes follow closely in importance
                                                                                                                                                          • Figure 65: Purchase Drivers, by age, March 2012
                                                                                                                                                      • Attitudes and Behaviors toward Brands and Product Attributes

                                                                                                                                                        • Key points
                                                                                                                                                          • Nutrition labels are important; quality of ingredients worth a higher price
                                                                                                                                                            • Consumers are brand loyal to a point; private label seen as comparable
                                                                                                                                                              • Figure 66: Attitudes toward brands and other product-related attributes, by age, March 2012
                                                                                                                                                          • SymphonyIRI Builders—Key Household Purchase Measures

                                                                                                                                                              • Overview of baby food
                                                                                                                                                                • Baby food/snacks
                                                                                                                                                                  • Consumer insights on key purchase measures—baby food/snacks
                                                                                                                                                                    • Brand map
                                                                                                                                                                      • Figure 67: Brand map, selected brands of baby food/snacks buying rate, by household penetration, 2011*
                                                                                                                                                                    • Brand leader characteristics
                                                                                                                                                                      • Key purchase measures
                                                                                                                                                                        • Figure 68: Key purchase measures for the top brands of baby food/snacks, by household penetration, 2011*
                                                                                                                                                                    • Appendix—Other Useful Consumer Tables

                                                                                                                                                                        • Figure 69: Reasons for using store-bought baby/toddler food, March 2012
                                                                                                                                                                        • Figure 70: Attributes when purchasing baby/toddler formula/solid foods, March 2012
                                                                                                                                                                        • Figure 71: Attributes when purchasing baby/toddler formula/solid foods, March 2012
                                                                                                                                                                        • Figure 72: Purchase Drivers, by age, March 2012
                                                                                                                                                                        • Figure 73: Attributes when purchasing baby/toddler formula/solid foods, by household income, March 2012
                                                                                                                                                                        • Figure 74: Attributes when purchasing baby/toddler formula/solid foods, by household income, March 2012
                                                                                                                                                                        • Figure 75: Reasons for using store-bought baby/toddler food, by household income, March 2012
                                                                                                                                                                        • Figure 76: Attitudes toward brands and other product-related attributes, by age, March 2012
                                                                                                                                                                        • Figure 77: Behaviors toward brand purchasing and nutrition for store-bought baby formula and toddler food, March 2012
                                                                                                                                                                        • Figure 78: Attitudes toward brands and other product-related attributes, by household income, March 2012
                                                                                                                                                                        • Figure 79: Attitudes toward brands and other product-related attributes by baby food and drink usage, by feeding behavior, March 2012
                                                                                                                                                                        • Figure 80: Moms' ratings of the quality of baby/toddler foods available in the stores, by age, March 2012
                                                                                                                                                                        • Figure 81: Moms' ratings of the quality of baby/toddler foods available in the stores, by household income, March 2012
                                                                                                                                                                        • Figure 82: Behaviors toward brand purchasing and nutrition for store-bought baby formula and toddler food, by age and household income, March 2012
                                                                                                                                                                        • Figure 83: Attitudes toward brands and other product-related attributes by baby food and drink usage, by feeding behavior, March 2012
                                                                                                                                                                    • Appendix—SymphonyIRI Builders Panel Data Definitions

                                                                                                                                                                        • SymphonyIRI Consumer Network Metrics
                                                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                                                          Companies Covered

                                                                                                                                                                          • Abbott Laboratories
                                                                                                                                                                          • Bristol-Myers Squibb Company
                                                                                                                                                                          • Gatorade
                                                                                                                                                                          • Gerber Products Company
                                                                                                                                                                          • Mead Johnson & Company
                                                                                                                                                                          • Nestlé USA
                                                                                                                                                                          • Plum Baby
                                                                                                                                                                          • Supervalu Inc
                                                                                                                                                                          • The Hain Celestial Group, Inc.
                                                                                                                                                                          • Whole Foods Market Inc

                                                                                                                                                                          Baby Food and Drink - US - June 2012

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