2022
9
UK Baby Food and Drink Market Report 2022
2022-04-09T04:06:05+01:00
OX1104997
2195
150419
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Report
en_GB
“Pressure on household incomes in 2022 will erode sales of baby food, drink and milk by boosting scratch cooking and further reducing birth rates. Parent/toddler cooking kits and frozen baby/toddler…

UK Baby Food and Drink Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Baby Food and Drink market report identifies consumer attitudes towards volume sales, baby food channels, and advice on feeding babies and toddlers in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Baby Food and Drink Industry in the UK.

Current Market Landscape

Parents’ high level of environmental concern around baby food and drink offers a call to action, especially in light of their increased eco-consciousness as a result of the pandemic. With recycling claims widespread in the category but holding little sway on purchase, brands need to take a more proactive approach to sustainability, also spelling out to consumers the tangible benefits of buying ‘greener’ products.

  • 66% of parents of 0-4s report concern about the environmental impact of baby food and drink packaging.
  • 66% of parents of 0-4s give their children homemade food at least once a day.

Pressure on household incomes in 2022 will erode sales of baby food, drink and milk by boosting scratch cooking and further reducing birth rates. The fairly low level of brand loyalty in both baby food and milk also raises the possibility of shoppers switching to cheaper options within the category, such as own-label. However, many parents’ greater willingness to pay more for products intended for their children then for themselves should support sales to some extent.

Future Market Trends in Baby Food and Drink

The continuing decline in birth rates, accelerated by the pandemic, plus the trend for delayed motherhood, will impede sales of baby food, drink and milk over 2022-26 by reducing the pool of available users. These trends do, however, offer potential to grow value sales by facilitating trading up, older mothers tending to be better off financially.

Cooking kits designed for parents and toddlers to use together are a promising area for brands to explore. These products have the potential to appeal during the income squeeze as a fun and relatively inexpensive activity for parents and children to do together while also teaching children valuable life skills.

Read on to discover more details or take a look at all of our UK Food and Foodservice market research

Quickly understand

  • The expected impact of the income squeeze on value and volume sales of baby food, drink and milk.
  • The continuing effects of shifts in consumer behaviour arising from the COVID-19 pandemic on the baby food, drink and milk category.
  • Leading factors influencing purchase in the baby food and baby milk sectors.
  • Channels for buying baby food and milk.
  • Parents’ key sources of advice on feeding babies/toddlers.
  • Trends in launch activity for baby food, drink and milk, and opportunities for further innovation.
  •  Parents of 0-4s’ attitudes towards the environment, and the implications of these for the baby food, drink and milk category.

Covered in this report

Brands: Danone (Aptamil, Cow & Gate, Alpro), Nestlé (SMA), Kendal Nutricare (Kendamil), Hain Celestial (Ella’s Kitchen), Kraft Heinz (Heinz, Farleys), Ebro Foods (Tilda), Hero Group (Organix), Lotus Bakeries (Kiddylicious, Bear), HiPP, Nannycare, Little Dish, Annabel Karmel Group, Piccolo, Little Inca, Oliver’s Cupboard, ASDA, Holle, The Kids Food Co, Similac, Morrisons, Babease.

Expert analysis from a specialist in the field

This report, written by Alice Baker, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Pressure on household incomes in 2022 will erode sales of baby food, drink and milk by boosting scratch cooking and further reducing birth rates. Parent/toddler cooking kits and frozen baby/toddler food products warrant attention, given strong consumer interest and limited availability. The former’s appeal as a fun and relatively inexpensive family activity and the latter benefiting from frozen foods’ strong image as offering good value makes these timely.

Alice Baker
Senior Food & Drink Research Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for baby food, drink and milk
      • Figure 1: Category outlook, 2022-27
    • The market
    • Falling birth rates see category decline over 2016-21
    • Income squeeze to drive down volume and value sales in 2022, despite rising prices
    • Further inflation and volume sales decline expected for 2023-26
      • Figure 2: Market forecast for retail value sales of baby food, drink and milk, 2021-26
    • Ongoing decline in the dominant milk segment brings down the entire market in 2021
    • Falling birth rates pose a challenge for the market
    • Higher breastfeeding rates drive decline in formula milk sales
      • Figure 3: Aggregate breastfeeding rate at 6-8 weeks for England, 2016-21
    • Companies and brands
    • Sustainability-focused brands perform well over 2021-22
      • Figure 4: Leading brands’ sales in the UK retail baby milk market, by value, 2020/21-2021/22
    • Own-label’s sales gain ups the competition for brands
    • Baby food brands look to tap into the scratch cooking and plant-based trends in their 2021 launches
    • Formula milk brands highlight functional benefits and explore alternative milks
    • Advertising spend plunges by 70% in 2021
    • Various brands focus on sustainability and look to make vegetables fun in their 2021 advertising
    • The consumer
    • Homemade food remains the most popular, but usage frequency has fallen
      • Figure 5: Usage of baby food and drink, by type, 2021
    • Online buying of baby food and milk is high, with supermarkets leading the way for in-store and online
      • Figure 6: Channels for buying baby/toddler food and milk, by type, 2021
    • Five-a-day claims attract strong consumer interest, but lack of official approval poses a barrier
      • Figure 7: Buying factors for baby/toddler food, 2021
    • Brand loyalty is low in baby food
    • Essential for formula milk brands to spell out functional benefits
      • Figure 8: Buying factors for baby milk, 2021
    • Lack of differentiation in formula milk underpins low brand loyalty
    • Friends/family are the leading source of advice
      • Figure 9: Sources of information on feeding babies and toddlers, 2021
    • Scope for further NPD in parent/child cooking kits and chilled and frozen products
      • Figure 10: Behaviours relating to baby food and drink, 2021
    • Many parents are concerned about the environment, but not all act on it
  3. Issues and Insights

    • Innovate with parent/child cooking kits and frozen products to grow sales during the income squeeze
    • Find ways to make fruit/vegetable content tangible for parents
    • Spell out environmental credentials to tap into parents’ increased eco-consciousness
  4. Market Size and Performance

    • Falling birth rates see category decline over 2016-21
      • Figure 11: Retail value and volume sales of baby food, drink and milk, 2016-21
    • Rising prices see value sales grow despite falling volume sales
  5. Market Forecast

    • Further inflation with declining volumes anticipated for 2022-26
      • Figure 12: Category outlook, 2022-27
    • Various external factors to drive up prices in 2022
    • Income squeeze and ageing population to impede volume sales over 2022-26
      • Figure 13: Market forecast for retail value sales of baby food, drink and milk, 2021-26
      • Figure 14: Market forecast for retail volume sales of baby food, drink and milk, 2021-26
    • Market drivers and assumptions
      • Figure 15: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast methodology
  6. Market Segmentation

    • Ongoing decline in the dominant milk segment brings down the entire market in 2021
      • Figure 16: Retail value and volume sales of baby food, drink and milk, by segment,
    • Baby food recovers sales somewhat in 2021
  7. Market Drivers

    • Decline in birth rates poses a challenge for the market
    • Live births in 2020 reach their lowest level since 200
      • Figure 17: Live births in England and Wales, 2015-20
    • Total Fertility Rate in 2020 falls to lowest level since records began
      • Figure 18: Total fertility rate for England and Wales, 2015-20
    • More women are delaying childbearing…
      • Figure 19: Mean age of mothers at first childbirth in England and Wales, 2015-20
    • …or not having children at all
    • Decline in birth rates continues into 2021 as ‘lockdown baby boom’ fails to materialise
    • Birth rates are likely to decline further over 2022-23 amid income squeeze
    • Ageing population will decrease birth rates over 2022-26
    • Higher breastfeeding rates drive decline in formula milk sales
      • Figure 20: Aggregate breastfeeding rate at 6-8 weeks for England, 2016-21
    • WHO report criticises formula milk advertising
    • The conflict in Ukraine will hurt the UK economy
    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID-19 bounceback will be followed by a period of slower growth
    • Employment has held up better than expected
    • Employment levels are important for baby food and drink sales
      • Figure 21: Usage of ready-made baby food products and formula milk, by employment status, 2021
    • Increased home-working to impede category sales over 2022-26
    • Inflation is the key concern for 2022 for consumers, brands and the economy
    • Consumers’ financial wellbeing has slipped from its recent high point…
      • Figure 22: Household financial wellbeing index, 2016-2022
    • …and concerns over inflation are coming to the fore
      • Figure 23: Consumer concerns about household finances, 2021-22
    • Pressure on household incomes will impede sales of ready-made baby food, and possibly milk
      • Figure 24: Selected issues consumers have faced in the last two months, by parents of under-12s and non-parents, 2022
    • Baby food’s small share of household budgets should insulate it to some extent
    • Own-label products could benefit from consumer switching
    • Heightened public focus on the environment puts pressure on brands
    • Plastic packaging tax looms
    • Consumers’ increased eco-consciousness adds to the pressure on brands to be proactive on the environment
    • On-pack health claims on baby food come under further scrutiny
    • WHO calls for further regulation on health claims in the baby food market
    • Brands criticised for ‘misleading’ health claims on high-sugar snacks
  8. Market Share

    • Supply issues hit Aptamil and Cow & Gate as decline in baby milk continues
      • Figure 25: Leading brands’ sales and shares in the UK retail baby milk market, by value and volume, 2019/20-2021/22
    • Increased distribution boosts Kendamil
    • Ella’s Kitchen outperforms the baby food segment in 2021
      • Figure 26: Leading brands’ sales and shares in the UK retail wet and dry baby food^ market, by value and volume, 2019/20-2021/22
    • HiPP gains from the growth in organic
    • Parents’ stockpiling tendencies boost Little Dish
    • Heinz gains as its NPD aligns with consumer trends
    • Cow & Gate reduces its range
    • NPD activity and value proposition boosts own-label
    • Organix grows sales but faces increased competition
      • Figure 27: Leading brands’ sales and shares in the UK retail baby finger foods/snacks market, by value and volume, 2019/20-2021/22
    • Heinz remains the only major brand as decline in baby drinks continues
      • Figure 28: Leading brands’ sales and shares in the UK retail baby drinks market, by value and volume, 2019/20-2021/22
  9. Launch Activity and Innovation: Overview

    • Baby food and milk/drinks differ on what aspects of health they focus on
      • Figure 29: Share of launches in the UK baby food^ and drink market, by claim category, 2018-21
    • Ethical claims are more common in milk/drinks than in food
  10. Launch Activity and Innovation: Baby Food

    • Heinz looks to tap the plant-based trend with new meals range
      • Figure 30: Example of Heinz by Nature’s range of plant-based meals, 2021
    • Baby food and milk brands extend into new areas
    • SMA launches a range of snacks
      • Figure 31: Examples of SMA’s Little Steps snacks range, 2021
    • Kiddylicious targets the ‘untapped’ pre-school market with new snacks
      • Figure 32: Example of Kiddylicious’ range of snacks for pre-school children, 2021
    • Brands and retailers continue to explore international flavours
      • Figure 33: Examples of baby food launches with international flavours, 2021
    • Brands continue in their efforts to target home cooking
    • Piccolo expands its range…
      • Figure 34: Examples of new product launches by Piccolo, 2021
    • …but faces increased competition
      • Figure 35: Examples of HiPP’s Little Mealmakers range, 2021
    • Little Dish looks to tap into parents’ stockpiling mentality with new variety pack
    • A few brands take action on sustainable packaging
    • Ella’s Kitchen unveils new cap made with recycled plastic
    • Heinz redesigns its pouches to allow for kerbside recycling
  11. Launch Activity and Innovation: Milk and Drinks

    • Brain and immune health are the leading functional claims
      • Figure 36: Share of product launches in the UK baby/toddler milk and drinks market, by functional health claims, 2018-21
    • Nestlé’s switch to bio-plastics is a rare example of packaging innovation
      • Figure 37: Product in the SMA range referencing its use of plant-based plastic on front-of-pack, 2021
    • Various brands reformulate to remove palm oil
      • Figure 38: Example of IMF launch making a palm oil free claim, 2021
    • Aptamil’s ‘starter pack’ takes convenience a stage further
      • Figure 39: New ‘starter pack’ format for Aptamil, 2021
    • More brands explore alternatives to standard cow’s milk
      • Figure 40: Examples of IMF launches made with alternatives to standard cow’s milk, 2021
  12. Advertising and Marketing Activity

    • Advertising spend plunges by 70% in 2021
      • Figure 41: Total above-the-line, online display and direct mail advertising expenditure on baby food and drink, 2019-21
    • Danone Nutricia continues to lead on advertising
    • Cow & Gate continues its focus on happiness, but with a stronger emphasis on digestive health
    • “Love Don’t Judge” campaign offers mental health support
    • Cow & Gate promotes its RTF formulas for Christmas travelling
    • Aptamil continues its focus on small achievements leading to future greatness
    • Heinz focuses on ‘finding joy in chaos’…
    • ….and looks to associate itself with the ‘grow your own’ trend
    • Baby food brands continue their efforts to make vegetables fun
    • Ella’s Kitchen focuses on sensory play
    • Organix links up with nurseries to promote ‘Explore the rainbow’ message
      • Figure 42: Instagram post by Organix in the “Good for me, good for the planet” campaign, 2021
    • Various brands highlight their environmental credentials
    • Nielsen Ad Intel coverage
  13. Usage of Baby Food and Drink

    • Homemade food is the most popular, used by 85% of parents
      • Figure 43: Usage of baby food and drink, by type, 2021
    • Most parents use both homemade and ready-made foods
    • Usage frequency for homemade foods returns to its pre-pandemic levels
      • Figure 44: Frequency of feeding of different types of baby food and drink, 2021
    • One in five parents give their children snacks twice a day or more
  14. Channels for Buying Baby Food and Milk

    • Baby food and milk have high levels of online purchasing
      • Figure 45: In-store and online buying of baby food and milk, 2021
    • Supermarkets lead both on in-store and online buying
      • Figure 46: Channels for buying baby/toddler food and milk, by type, 2021
    • Many parents buy from a variety of channels
    • More people buy baby/toddler food than milk from discount supermarkets
  15. Buying Factors for Baby Food

    • Five-a-day claims attract strong consumer interest, but lack of official approval poses a barrier
      • Figure 47: Buying factors for baby/toddler food, 2021
    • Communicate products’ fruit/vegetable content more tangibly for shoppers
    • Associate your brand with healthy eating messages
      • Figure 48: Instagram post by Annabel Karmel, 2021
    • The ‘eat the rainbow’ concept is valued by many parents
    • Explore layered products as a means to showcase colour
      • Figure 49: Examples of baby food products designated by colour, 2021
    • Interest in colour provides opportunities for brands to reassess glass packaging
    • Low brand loyalty in baby food raises the possibility of switching during the income squeeze
    • Innovative flavours and ethical attributes can help to appeal to those who are not influenced by brand
  16. Buying Factors for Baby Milk

    • Brands must spell out immune health and brain development functional benefits
      • Figure 50: Buying factors for baby milk, 2021
    • Lack of differentiation underpins the low brand loyalty in baby milk
    • Functional health claims and recyclable packaging are among means to appeal to people who are not influenced by brand
    • Formula made using cow’s milk alternatives appeals to a quarter
    • Opportunities for dairy alternatives brands to extend into formula milk
      • Figure 51: International example of an IMF launch using oat milk, 2021
  17. Sources of Information on Feeding Babies and Toddlers

    • Friends/family are the leading source of advice
      • Figure 52: Sources of information on feeding babies and toddlers, 2021
    • Offer discounts and foster a sense of community to harness the power of peer recommendations
    • Gain endorsements from online parenting groups
      • Figure 53: Example of children’s food product with ‘Mumsnet Rated’ logo on front-of-pack, 2021
    • Parents’ trust in medical professionals raises the possibility of backlash
  18. Behaviours Relating to Baby Food and Drink

    • Parent/child cooking kits warrant further attention
      • Figure 54: Behaviours relating to baby food and drink, 2021
    • Link up with recipe box delivery services
    • Encourage parents to share photos on social media to further drive buying
    • Scope for further NPD in chilled and frozen baby food
    • Chilled products can appeal as a premium option
    • Frozen products are well-placed to succeed
    • Explore toddler-suitable versions of food products popular with older children
      • Figure 55: International examples of processed meat products designed for pre-school children, 2020-22
    • Use in-store displays to attract parents’ attention to frozen products
    • Many parents are concerned about the environment, but few act on this
    • Highlight environmental credentials for further differentiation and to drive purchase
    • Tap the feel-good factor through marketing messages to drive buying
    • Use on-pack features to make the environmental benefits more tangible
  19. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  20. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 56: Market forecast and prediction intervals for retail value sales of baby food, drink and milk, 2016-26
      • Figure 57: Market forecast and prediction intervals for retail volume sales of baby food, drink and milk, 2016-26
    • Market drivers and assumptions
    • Forecast methodology
  21. Appendix: Market Share

      • Figure 58: Leading brand owners’ sales and shares in the UK retail baby milk market, by value and volume, 2019/20-2021/22
      • Figure 59: Leading brand owners’ sales and shares in the UK retail wet and dry baby food^ market, by value and volume, 2019/20-2021/22
      • Figure 60: Leading brand owners’ sales and shares in the UK retail baby finger foods/snacks market, by value and volume, 2019/20-2021/22
      • Figure 61: Leading brand owners’ sales and shares in the UK retail baby drinks market, by value and volume, 2019/20-2021/22

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