Baby Food, Drinks and Milk - UK - April 2009

Since Mintel last reported on the baby food, drink and milk market in 2007, sales have continued to see dynamic growth, fuelled by rising birth rates and wider usage, largely on the back of NPD.

Sales value is estimated to have increased by at least 14% in 2008, to reach £456 million. Sales in the main product segment, milk, have been boosted by the Healthy Start scheme launched in late 2006, with rapid value growth in 2008 partly driven by global dairy price inflation.

While lower food and milk price inflation will dampen growth in current terms, an increase of 8% is expected in 2009, to take market value to £491 million. While PDI is expected to fall in the economic crisis, most parents seem reluctant to cut back on their baby’s food.

Seen as closely related to the baby’s health and wellbeing, Mintel expects the market to be better insulated from the effects of the downturn than most. However, some parents are still put off by ready-made baby food because they perceive the brands to fall too far behind the purity of home-cooked food.

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Issues in the Market
- Key themes
- Definition
- Abbreviations
Future Opportunities
- Cross-referencing to adult foods
- A break from perfect parenting?
- Trend from Inspire: Hyper-parenting
- Natural ingredients
- Trend from Inspire: Purity
Market in Brief
- Slower but robust growth continues
- Milks and finger foods strong
- In a concentrated market, Nutricia extends its lead
- Smaller brands rule the roost in NPD
- Grocers gain in downturn
- Consumers more knowledgeable – and demanding
Internal Market Environment
- Key points
- Recommendations dominate
- - Figure 1: Initial breast feeding rates in England and Wales, 1980-2005
  - Figure 2: UK Breastfeeding rates, by age of child, 1990-2005
- - Figure 3: Age at introduction of solid food, 1995-2005
- Health awareness rising
Broader Market Environment
- Key points
- A mini baby boom
  - Figure 4: Number of live births and total fertility rate in England and Wales, 1997-2007
- - Figure 5: Average age of women at childbirth, UK, 1997-2007
  - Figure 6: Births by age of mother at childbirth, UK, 2007 and change in share, 1997-2007
- Growth in PDI expected to halt
- - Figure 7: PDI at current prices and annual % growth, 1998-2008
- Most women work
- - Figure 8: Number of weeks of maternity leave taken, 2007
Competitive Context
- Key points
- The domestic substitutes
- Tough competition with cereals
  - Figure 9: UK retail volume sales of hot cereals, 2002-07
- Baby drinks lack edge
- - Figure 10: UK retail sales of juice drinks, by target age group, 2003-08
- The baby market is big business
- - Figure 11: Sales of other baby care products, by type, 2003-07
Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
Who’s Innovating?
- Key points
- Smaller brands lead NPD
  - Figure 12: Leading innovators in baby foods, 2008
- Tubs and pots still growing
  - Figure 13: Innovation in baby foods, by type of packaging, 2008
- Treats, top-ups, taste-experiences – desserts
  - Figure 14: Innovation in baby foods, by product category, 2008
- Functional foods
- Natural and convenient – expected, not achieved?
- - Figure 15: Innovation in baby foods, by product category claim, 2004 and 2008
  - Figure 16: Innovation in baby foods, by product claim, 2008
Market Size and Forecast
- Key points
  - Figure 17: UK retail value sales of baby food, milk and drinks, index of growth, 2004-14
- - Figure 18: UK retail value sales of baby food, milk and drinks, at current and constant prices, 2004-14
- No nasties
- Almost home-made
- External interest
- Milk robust till birth rates slow
- - Figure 19: UK retail value sales of baby milk, at current and constant prices, 2004-14
- Meals partly insulated from PDI
- - Figure 20: UK retail value sales of baby meals, at current and constant prices, 2004-14
- NPD a major factor for finger food
- - Figure 21: UK retail value sales of finger foods, ar current and constant prices, 2004-14
- Drinks remain lacklustre
  - Figure 22: UK retail value sales of baby drinks, at current and constant prices, 2004-14
- Factors used in the forecast
Segment Performance
- Key points
- Milk gains in total baby market
  - Figure 23: UK retail value sales of baby food, milk and drink, by sector, 2004-09
  - Figure 24: UK retail value sales of baby food, milk and drink, by sector, 2004-09
- Dynamic growth in organics
  - Figure 25: UK retail value sales of organic baby food, milk and infant formula, 2004-09
- Baby meals
- Healthy growth in baby meals
  - Figure 26: UK retail value sales of baby meals, by type, 2004-09
  - Figure 27: UK retail value sales of baby meals, by type, 2004-09
- NPD and segmentation drive wet meals
- Halal meals still niche
- Pots and trays replace jars and cans
  - Figure 28: UK retail value sales of wet baby meals, by packaging type, 2004-09
- Frozen aim for almost home-made
- Breakfast dominates dry segment
- Puff snacks boost finger food
- - Figure 29: UK retail value sales of baby finger foods, by type, 2004-09
- Baby milks and drinks
- Healthy start and inflation boost milks
  - Figure 30: UK retail value sales of baby milks, by type, 2004-09
  - Figure 31: UK retail value sales of baby milks, by type, 2004-09
- First- and second-stage powders dominate
- Baby drinks stagnate
  - Figure 32: UK retail value sales of baby drinks, by type, 2004-09
Market Share
- Key points
- Leading manufacturers still dominate
  - Figure 33: Estimated manufacturer/brand shares in UK value sales of baby food, milk and drinks 2004-08
- Troubled Heinz
- Nutricia steams ahead
- Smaller brands make their mark
- Hot competition in meals
  - Figure 34: Estimated manufacturer/brand shares in UK retail value sales of baby food, milk and drinks, 2008
- HiPP rules organic roost
  - Figure 35: Estimated manufacturer/brand shares in UK retail value sales of organic baby food, milk and drinks, 2004-08
Companies and Products
- Key points
- Manufacturers and brands
  - Figure 36: Leading companies in the baby food market and their brands, 2009
- Major players
- Babylicious
- Ella’s Kitchen
- Heinz
- HiPP Organic
- Nutricia
- Organix
- Plum Baby
- SMA Nutrition
Brand Communication and Promotion
- Key points
- Advertising restrictions tighten further
- Explosive growth in main media spend
  - Figure 37: Main monitored media advertising spend on baby food, 2004-08
- TV the media of choice
  - Figure 38: Main monitored media advertising spend on baby food, by media, 2004-08
- Three manufacturers dominate adspend
- - Figure 39: Percentage share of main monitored media advertising expenditure on baby food and drink, by top-spending manufacturers, 2004-08
- Milk brands lead
  - Figure 40: Main monitored media advertising expenditure on baby food and drink, by top-spending products, 2007-08
- Emotion, information, both?
- Science vs. emotion
- Current trends – all natural
- New channels gain importance
- Bounty still strong
Channels to Market
- Key points
- Grocery multiples lead
- Chemists lose ground
- A boost to smaller retailers
- Potential for direct selling?
- - Figure 41: UK retail value sales of baby food and drink, by outlet type, 2004-08
The Consumer – Usage
- Key points
- Follow-up milk drives usage growth
  - Figure 42: Trends in use of baby milk, 2004-08
- Younger mums choose bottle over breast
- Older and affluent parents are light users
- - Figure 43: Most valuable consumers for baby milk and baby food, by socio-economic group, 2008
- Ready-meals continue to gain ground
  - Figure 44: Trends in use of baby or junior foods, 2004-08
- - Figure 45: Trends in packaging of baby or junior food used, 2006-08
The Consumer – Attitudes
- Key points
- Parents of young children against junk food, keen on new products
- - Figure 46: Agreement with statements about food, by guardians of children aged up to three, 2008
- Frozen foods win favour, children's autonomy being questioned more
- - Figure 47: Trends in agreement with statements about food, 2004-08
Target Groups – 0-2-year-olds
- Key points
  - Figure 48: Target groups by attitudes, parents/guardians of children aged 0-2, 2008
- Price-led (34%)
- Convenience-driven (37%)
- All-aware (29%)
- - Figure 49: Target groups, by agreement with additional lifestyle statements, parents/guardians of children aged 0-2, 2008
  - Figure 50: Target groups, by agreement with statements about food, parents/guardians of children aged 0-2, 2008
Target Groups – 3-5-year-olds
- Key points
  - Figure 51: Target groups by attitudes, parents/guardians of children aged 3-5, 2008
- Price is all (36%)
- Smart shoppers (28%)
- Easy living (36%)
- - Figure 52: Target groups, by agreement with statements about food, parents/guardians of children aged 3-5, 2008
Appendix
- Consumer research
- ACORN
- Advertising data
Appendix – The Consumer – Usage
- - Figure 53: Frequency of using baby milk, by detailed demographics, 2008
- - Figure 54: Frequency of using baby or junior food, by detailed demographics, 2008
Appendix – The Consumer – Attitudes
- - Figure 55: Agreement with statements about food and shopping, by detailed demographics, 2008
- - Figure 56: Agreement with statements about food and shopping, by detailed demographics, 2008 (Contd…)
Appendix – The Consumer: Target Groups 0-2-year-olds
- - Figure 57: Target groups, by demographics, parents/guardians of children aged 0-2, 2008
- - Figure 58: Target groups, by frequency of using baby milk, parents/guardians of children aged 0-2, 2008
- - Figure 59: Target groups, by frequency of using baby food, parents/guardians of children aged 0-2, 2008
- - Figure 60: Target groups, by agreement with additional lifestyle statements, parents/guardians of children aged 0-2, 2008
- - Figure 61: Target groups, by time spent caring for children on an average weekday, parents/guardians of children aged 0-2, 2008
Appendix – The Consumer: Target Groups 3-5-year-olds
- - Figure 62: Target groups, by detailed demographics, parents/guardians of children aged 3-5, 2008
- - Figure 63: Target groups, by agreement with additional lifestyle statements, parents/guardians of children aged 3-5, 2008
- - Figure 64: Target groups, by frequency of using baby food, parents/guardians of children aged 3-5, 2008
- - Figure 65: Target groups, by frequency of using baby milk, parents/guardians of children aged 3-5, 2008