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The Baby Food Market - China - September 2012

“China’s baby food market expanded at a compound annual growth rate (CAGR) of 23.1% from 2008-12 to reach a forecast market value of RMB112.2 billion, while volume CAGR rose at 18.6% from 2008-2012, growing to an estimated 0.8 million tonnes. Value grew faster than volume as consumers have increasingly traded up to higher priced products, particularly foreign brands, to allay their fears over baby food scares, which continue to plague the sector. Manufacturers are also increasingly raising prices, which they claim are justified by the use of imported milk ingredients, better fortification and nutritional ingredients and input cost pressures such as milk and labour.”

-Tan Heng Hong – Senior Research Analyst


Some questions answered in this report include:
  • How can local companies compete with foreign peers given consumers' poor safety perceptions of local milk powder?
  • What are the prospects for goat's milk powder and organic milk powder?
  • Given the domination of milk in the baby food sector, how can the usage of non-formula packaged baby food be increased?
  • With rising internet penetration among mothers, how can marketers improve their digital engagement to target this group of net-savvy consumers?

This market comprises packaged dry and liquid products designed specifically for babies/infants. It includes milk and other drinks, biscuits/rusks, cereals, fruit & vegetable foods and other solids. Market value and volume comprises sales through all retail channels including direct to the consumer. The market includes any product specifically for babies, which can also be used for infants and even children up to the age of seven.

 

Report Introduction:

China’s baby food market expanded at a compound annual growth rate (CAGR) of 23.1% from 2008-12 to reach a forecast market value of RMB112.2 billion, while volume CAGR rose at 18.6% from 2008-2012, growing to an estimated 0.8 million tonnes. Value grew faster than volume as consumers have increasingly traded up to higher priced products, particularly foreign brands, to allay their fears over baby food scares, which continue to plague the sector. Manufacturers are also increasingly raising prices, which they claim are justified by the use of imported milk ingredients, better fortification and nutritional ingredients and input cost pressures such as milk and labour.

The lack of confidence in cow’s milk has prompted consumers to seek alternatives including organic milk and goat’s milk. Consumers are also turning to the overseas market for milk, including buying milk powder from nearby Hong Kong, which has led to a shortage of milk powder there.

Milk powder continues to dominate the baby food market, but rising demand for convenience and baby food products that can meet the specific nutritional needs of babies is spurring demand for packaged baby cereals and other non-formula packaged baby food. Digital engagement will also become increasingly important in the marketing of baby food as the new generation of mothers are typically quite digital savvy.

 

Liqueurs - UK - January 2012

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Table of contents

  1. Introduction

      • Definition
        • Report structure
        • Executive Summary

          • The market
            • Figure 1: Baby food sales, by volume and value, 2007-12
          • The forecast
            • Figure 2: Forecast – value sales of baby food, 2007-17
            • Figure 3: Forecast – volume sales of baby food, 2007-17
          • Companies
            • Figure 4: Baby food market share, by value, 2010-11
          • Market segmentation
            • Figure 5: Baby food market segmentation, by volume and value, 2008-12
          • Issues
            • Lack of trust fuels demand for imports
              • Figure 6: Trust in baby food made overseas, May 2012
            • Searching for alternatives amidst quality scares
              • Figure 7: Percentage share of goat’s milk powder in new milk powder launches*, 2009 to first half 2012
            • Localisation and convenience to drive consumption of non-formula packaged baby food
              • Figure 8: Top three reasons for purchasing packaged baby/toddler food, May 2012
            • Net-savvy mothers offer engagement opportunities
              • Figure 9: Attitudes towards checking baby food ratings and reviews on the internet and buying brands recommended by friends or family, by age, May 2012
          • Lack of Trust Fuels Demand for Imports

            • Issues at a glance
              • Relentless scandals undermine trust
                • Melamine contamination became public knowledge in 2008
                  • Consumers remain sceptical after melamine crisis
                    • Figure 11: Agreement with the statement I would change my current baby food brand upon hearing negative comments on the brand from the media, May 2012
                  • Foreign brands dominate the market due to safety perceptions
                    • Figure 12: Agreement with the statement I trust baby food made overseas more than locally produced products, May 2012
                    • Figure 13: Baby food market share, by value, 2010-11
                    • Figure 14: Brands of baby food bought in the last 12 months, May 2012
                  • Consumers heading overseas to get their milk powder
                    • Figure 15: Agreement with statement ‘I believe imported baby food products contain more nutritional ingredients’, by income, May 2012
                  • Some are turning to online sources
                    • Figure 16: Buying baby food through online retailers from overseas, by income, May 2012
                    • Figure 17: Agreement with statement ‘I would be interested in purchasing baby food from websites overseas’, by income, May 2012
                  • Domestic manufacturers emphasising foreign origin to improve quality image
                    • Figure 18: Imports of preparations for infant use, put up for retail sale (HS Code: 19011000), by volume and value, 2009 – first half 2012
                    • Figure 19: Percentage share of volume imports of preparations for infant use, put up for retail sale (HS Code: 19011000)*, by country, 2009 – first half 2012
                  • Local firms can thrive through better marketing
                    • Figure 20: Sales of Biostime International Holdings, by segment, 2007-11 and first half 2011-12
                    • Figure 21: Prices of stage 1 infant formula, 27 August 2012
                    • Figure 22: Biostime Mama 100 members and spending, 2007-11
                    • Figure 23: Biostime distribution channels, first half 2010 and 2010-11
                    • Figure 24: Locations of buying baby food, by income, May 2012
                  • What does it mean?
                  • Searching for Alternatives Amidst Quality Scares

                    • Issues at a glance
                      • Organic milk becomes an alternative following the melamine scandal
                          • Figure 25: Top six considerations when purchasing packaged baby food, May 2012
                        • Variety and usage stifled by premium positioning
                          • Figure 26: Organic food/beverage category bought in the last 12 months, March 2012
                          • Figure 27: New launches of organic liquid white milk and organic milk powder, 2009 to first half of 2012
                          • Figure 28: Prices of stage one infant formula of Abbott Laboratories and Ausnutria Dairy, August 2012
                          • Figure 29: Prices of stage one organic infant formula, August 2012
                          • Figure 30: Organic infant formula/milk powder bought in the last 12 months, March 2012
                          • Figure 31: Attitudes towards paying more for organic foods, May 2012
                        • Goat’s milk benefiting from growing interest among consumers
                          • Figure 32: Frequency of use of baby/children’s milk, May 2012
                        • Growing availability provides support for growth
                          • Figure 33: Percentage share of goat’s milk powder in new milk powder launches*, 2009 to first half 2012
                          • Figure 34: Percentage share of new launches of goat’s milk powder by company*, 2009 to first half 2012
                          • Figure 35: China’s milk output, 2006-10
                        • Goat’s milk powder targets niche market
                            • Figure 36: Leading considerations when purchasing packaged baby food, May 2012
                          • Rising public scrutiny over goat’s milk claims
                            • Improved positioning can enhance acceptance
                              • Figure 37: Top 11 claims of goat’s milk powder in new launches, 2009 to first half 2012
                            • What does it mean?
                            • Localisation and Convenience to Drive Consumption of Non-Formula Packaged Baby Food

                              • Issues at a glance
                                • Non-formula packaged baby food maintains market presence
                                  • Figure 38: Baby food segment share, by volume, 2008-12
                                  • Figure 39: New launches of packaged baby food excluding formula milk, 2009 – first half 2012
                                  • Figure 40: Consumption frequency of baby/children’s food and snacks by at least once-a-day, by age, May 2012
                                • Convenience/good-for-you spurring demand for non-formula packaged baby food
                                  • Figure 41: Top three reasons for purchasing packaged baby/toddler food, May 2012
                                  • Figure 42: Female workforce, by age, 2010
                                  • Figure 43: Top 10 baby food and baby cereals claims*, 2009 – first half 2012
                                • Localising of flavours can improve consumer engagement
                                  • Figure 44: Brands of baby food bought in the last 12 months, by monthly household income, May 2012
                                  • Figure 45: New baby cereal launches*, by flavour, 2009 to first half 2012
                                • On-the go trend can enhance baby’s snacking frequency
                                  • Figure 46: Consumption frequency of baby/kid’s food and snacks by at least once a week, by age, May 2012
                                  • Figure 47: Attitudes towards snacking, May 2012
                                • What does it mean?
                                • Net-Savvy Mothers Offer Engagement Opportunities

                                  • Issues at a glance
                                    • Mothers have the say when it comes to baby food
                                      • Figure 48: Purchaser of baby food, by age, May 2012
                                    • Friends/family and internet also have strong influence
                                      • Figure 49: Attitudes towards checking baby food ratings and reviews on the internet and buying brands recommended by friends or family, May 2012
                                      • Figure 50: Internet penetration, by age, December 2011 and June 2012
                                      • Figure 51: Marriage registration, by age, 2005-11
                                    • Parental concerns about nutrition
                                      • Figure 52: Attitudes towards showing concern about child’s nutrition, May 2012
                                    • Digital engagement can establish credibility among target consumers
                                        • Figure 53: Top ten baby and parenting sites in China, August 2012
                                        • Figure 54: Top ten baby and parenting sites in China, by Weibo followers, August 2012
                                        • Figure 55: Internet penetration and number of internet and mobile internet users in China, 2008-first half 2012
                                      • Online product sampling encourages experimenting
                                        • Figure 56: Attitudes towards letting their children trying out different food products, May 2012
                                        • Figure 57: Attitudes towards sticking to the same brand of baby food if it suits the child’s need, May 2012
                                      • What does it mean?
                                      • The Future of the Market

                                          • Figure 58: Fan chart forecast for baby food, at best-, worst-, and central-case scenario, by value, 2007-17
                                          • Figure 59: Fan chart forecast for ice cream, at best-, worst-, and central-case scenario, by volume, 2007-17
                                          • Figure 60: China’s baby food market, actual and forecast by volume and value, 2007-17
                                        • Methodology
                                        • Market Size, Segmentation and Share

                                            • Figure 61: Baby food sales, by volume and value, 2007-12
                                            • Figure 62: Baby food market segmentation, by volume and value, 2008-12
                                            • Figure 63: Baby food market share, by value, 2010-11
                                        • Baby Food Consumption by Frequency

                                            • Figure 64: Baby food consumption, by most popular frequency of eating, May 2012
                                            • Figure 65: Baby food consumption, by next most popular frequency of eating, May 2012
                                            • Figure 66: Most popular frequency of consuming baby formula milk powder, by demographics, May 2012
                                            • Figure 67: Next most popular frequency of consuming baby formula milk powder, by demographics, May 2012
                                            • Figure 68: Most popular frequency of consuming goat’s milk powder, by demographics, May 2012
                                            • Figure 69: Next most popular frequency of consuming goat’s milk powder, by demographics, May 2012
                                            • Figure 70: Most popular frequency of consuming special formula milk powder, by demographics, May 2012
                                            • Figure 71: Next most popular frequency of consuming special formula milk powder, by demographics, May 2012
                                            • Figure 72: Most popular frequency of consuming kids’ ready-to-drink milk, by demographics, May 2012
                                            • Figure 73: Next most popular frequency of consuming kids ready-to-drink milk, by demographics, May 2012
                                            • Figure 74: Most popular frequency of consuming baby cereals, by demographics, May 2012
                                            • Figure 75: Next most popular frequency of consuming baby cereals, by demographics, May 2012
                                            • Figure 76: Most popular frequency of consuming baby fruit/vegetable/meat purees, by demographics, May 2012
                                            • Figure 77: Next most popular frequency of consuming baby fruit/vegetable/meat purees, by demographics, May 2012
                                            • Figure 78: Most popular frequency of consuming baby noodles/porridge, by demographics, May 2012
                                            • Figure 79: Next most popular frequency of consuming baby noodles/porridge, by demographics, May 2012
                                            • Figure 80: Most popular frequency of consuming baby finger food – teething food/biscuits/fruit snacks/meat floss/crisps, by demographics, May 2012
                                            • Figure 81: Next most popular frequency of consuming baby cereals, by demographics, May 2012
                                            • Figure 82: Most popular frequency of consuming baby fruit juice, by demographics, May 2012
                                            • Figure 83: Next most popular frequency of consuming baby fruit juice, by demographics, May 2012
                                            • Figure 84: Most popular frequency of consuming baby cheese drink/yogurt/probiotic milk drinks, by demographics, May 2012
                                            • Figure 85: Next most popular frequency of consuming baby cheese drink/yogurt/probiotic milk drinks, by demographics, May 2012
                                            • Figure 86: Most popular frequency of consuming baby colostrum milk powder, tablets, liquid, gel tablets, by demographics, May 2012
                                            • Figure 87: Next most popular frequency of consuming baby colostrum milk powder, tablets, liquid, gel tablets, by demographics, May 2012
                                            • Figure 88: Most popular frequency of consuming baby multinutrient (DHA/fish oil/algal oil/vitamins) gel tablets, liquid, tablets, by demographics, May 2012
                                            • Figure 89: Next most popular frequency of consuming baby multinutrient (DHA/fish oil/algal oil/vitamins) gel tablets, liquid, tablets, by demographics, May 2012
                                            • Figure 90: Most popular frequency of consuming baby probiotic powder, liquid, powder sachets, by demographics, May 2012
                                            • Figure 91: Next most popular frequency of consuming baby probiotic powder, liquid, powder sachets, by demographics, May 2012
                                            • Figure 92: Most popular frequency of consuming baby glucose, by demographics, May 2012
                                            • Figure 93: Next most popular frequency of consuming baby glucose, by demographics, May 2012
                                            • Figure 94: Frequency of consuming other baby food, by demographics, May 2012
                                        • Who Purchases Baby Food?

                                            • Figure 95: Purchaser of baby food, May 2012
                                            • Figure 96: Purchaser of baby food, by demographics, May 2012
                                        • Locations of Buying Baby Food

                                            • Figure 97: Locations of buying baby food, May 2012
                                            • Figure 98: Most popular locations of buying baby food, by demographics, May 2012
                                            • Figure 99: Next most popular locations of buying baby food, by demographics, May 2012
                                        • Reasons for Purchasing Packaged Baby/Toddler Food

                                            • Figure 100: Reasons for purchasing packaged baby/toddler food, May 2012
                                            • Figure 101: Most popular reasons for purchasing packaged baby/toddler food, by demographics, May 2012
                                            • Figure 102: Next most popular reasons for purchasing packaged baby/toddler food, by demographics, May 2012
                                        • Brands of Baby Food Bought

                                            • Figure 103: Brands of baby food bought in the last 12 months, May 2012
                                            • Figure 104: Most popular brands of baby food bought in the last 12 months, by demographics, May 2012
                                            • Figure 105: Next most popular brands of baby food bought in the last 12 months, by demographics, May 2012
                                            • Figure 106: Other brands of baby food bought in the last 12 months, by demographics, May 2012
                                            • Figure 107: Least popular brands of baby food bought in the last 12 months, by demographics, May 2012
                                        • Brands of Baby Food Bought Most Often

                                            • Figure 108: Brands of baby food bought most often in the last 12 months, May 2012
                                            • Figure 109: Brands of baby food bought most often in the last 12 months, by demographics, May 2012
                                        • Top Three Factors Considered Important When Purchasing Packaged Baby Food

                                            • Figure 110: Top three factors considered important when purchasing packaged baby food, May 2012
                                            • Figure 111: Top ranked consideration factors when purchasing packaged baby food, by demographics, May 2012
                                            • Figure 112: Second ranked consideration factors when purchasing packaged baby food, by demographics, May 2012
                                            • Figure 113: Third ranked consideration factors when purchasing packaged baby food, by demographics, May 2012
                                        • Attitudes Towards Baby Food

                                            • Figure 114: Attitudes towards baby food, May 2012
                                            • Figure 115: Agreement with the statements ‘I tend to read the nutrition labels of packaged baby/toddler food before buying them and ‘It’s worth paying more for organic foods’, by demographics, May 2012
                                            • Figure 116: Agreement with the statements ‘I tend to look out for promotions, coupons, and special offers for baby formula/food/drink’ and ‘I believe imported baby food products contain more nutritional ingredients’, by demographics, May 2012
                                            • Figure 117: Agreement with the statements ‘I trust baby food made overseas more than locally produced products’ and ‘I prefer to wait until my favourite brand of baby food goes on sale and then stock up’, by demographics, May 2012
                                            • Figure 118: Agreement with the statements ‘I would consider switching to domestic baby food brands in order to save money’ and ‘I tend to stick to the same brand of baby food if it suits my child’, by demographics, May 2012
                                            • Figure 119: Agreement with the statements ‘I would be interested in purchasing baby food from websites overseas’ and ‘I am always concerned about my child’s nutrition’, by demographics, May 2012
                                            • Figure 120: Agreement with the statements ‘I wouldn’t let my children eat snacks as I consider them junk food’ and ‘I like to let my children try out different food products’, by demographics, May 2012
                                            • Figure 121: Agreement with the statements ‘I don’t mind my child eating snacks while on the move rather than eating a proper meal’ and ‘I always check the baby foods ratings and reviews on the internet before I buy them’, by demographics, May 2012
                                            • Figure 122: Agreement with the statements ‘I will only buy those brands that are recommended by friends or family’ and ‘I will change my current brand of baby food if I have heard any negative comments on the brand from media’, by demographics, May 2012
                                        • Number of Brands of Packaged Baby Foods Purchased

                                            • Figure 123: Number of brands of baby food bought in the last 12 months, May 2012
                                            • Figure 124: Number of brands of baby food bought in the last 12 months, by demographics, May 2012

                                        Companies Covered

                                        To learn more about the companies covered in this report please contact us.

                                        The Baby Food Market - China - September 2012

                                        £2,681.27 (Excl.Tax)