| Worldwide Baby Food Market | | | | food companies loose control over the manufacture |
| The baby food market has been growing consistently, | | | | of their products. And companies must make very |
| however it has been experiencing phenomenal growth | | | | large investments in advertising so customers know to |
| since 2003. In 2005 the worldwide baby food market | | | | look for them in the frozen food section of their local |
| was worth $21 billion (US), up from 9.5 billion in 2003. | | | | grocery store. |
| The North American accounts for 25% of the market, | | | | Customer Problem |
| Europe 27%, and Asia-Pacific accounts for 25% of | | | | All parents want what is best for their new babies. US |
| the global market value.(1) | | | | spending on babies is a $28 billion industry. Families |
| US Baby Food Market | | | | spend over $11,000 during the first year of a baby's life |
| The nature of the baby food market in the US has | | | | on baby products alone.(6) This desire extends beyond |
| changed over the last few years. Historically, a few big | | | | cute clothes and fun toys and reaches into the kitchen |
| players dominated the market but a few companies | | | | and baby's first foods. |
| have emerged to target specific niche markets for | | | | Numerous studies have shown that eating patterns |
| more fresh' and organic alternatives. | | | | and food preferences are established early in life.(7) |
| Due to the increase in the number of competitors and | | | | Dissatisfied with the preservative and sugar-filled baby |
| fact that the baby food product usage cycle is | | | | food options available in grocery stores, parents are |
| relatively short, manufacturers are creating new | | | | looking for new feeding alternatives. |
| customer segments such as "toddler cuisine". Industry | | | | A growing number of parents are turning to organic |
| analysts believe that baby/toddler foods and drinks | | | | foods not only for personal health reasons but for |
| that are able to capitalize on convenience as well as | | | | environmental reasons as well. The organic baby food |
| offer premium quality and ingredients will perform well, | | | | market grew nearly 18 percent in 2004, double the |
| as parents often want to buy want is best for their | | | | overall growth of organic food sales. (8) According to |
| child and are willing to pay a high price for specially | | | | AC Neilsen, over the past five years, the organic baby |
| formulated products to ensure complete nutrition and a | | | | food market has grown by more than 60 percent, |
| healthy balance.(2) | | | | generating more than $100 million in sales in 2005. This |
| Market Growth Drivers | | | | growth is driven by concerns that parents have about |
| There are many factors that are driving the growth of | | | | the level of pesticides and hormones in their baby's |
| the baby food market. They are: family planning | | | | food. |
| methods, financial planning before the birth of a child, | | | | In recent years many parents have also started to at |
| late pregnancy options exercised by women, the | | | | least have the intention of making their own baby food. |
| increase in the number of working women, and an | | | | But working parents and active, busy families don't |
| increased willingness of consumers to pay for | | | | have time to shop, peel, steam, puree, strain, and |
| premium quality, organic products.(3) | | | | freeze homemade baby food themselves--it is just too |
| Parents, moms in particular, believe that "organic" and | | | | time consuming. According to a recent work/life |
| "all natural" labels are "very important" when making | | | | balance study conducted by CareerBuilder.com, |
| food decisions for their baby.(4) It is often the case | | | | one-in-four working moms said they are dissatisfied |
| that baby foods/drinks are the first types of organic | | | | with their work/life balance and are actively seeking |
| products to be brought into a household.(5) | | | | ways to obtain more flexibility, and some will do it at |
| Although there are a number of jarred organic baby | | | | any cost. Fifty-two percent of working moms say |
| food brands, such as Earth's Best and Tender Harvest | | | | they would even be willing take a pay cut to spend |
| available in stores today parents who are committed | | | | more time with their children, a significant jump from 38 |
| to offering their children the best, healthiest choices | | | | percent last year. |
| know that commercial organic baby foods are not | | | | New Baby Food Companies |
| fresh and, in order to have a longer shelf-life, they are | | | | Over the past few years a number of new baby food |
| cooked at temperatures that destroy many of the | | | | companies have popped up all over the world to help |
| vitamins and nutrients. | | | | meet the market need for quality baby food products. |
| Because good quality organic baby food is not | | | | Some are attempting to go head-to-head against the |
| available in stores many parents are choosing to make | | | | baby food giants in chain grocery stores. Some are |
| homemade baby food. At the same time, dozens of | | | | opening "baby food boutiques". While a few others are |
| homemade baby food websites have popped up. | | | | focusing on baby food catering services. |
| Emerging trend: Frozen organic baby foods | | | | (1) Baby Food Industry (2006), Datamonitor/RNCOS. |
| In response to the short comings of jarred baby food, | | | | (2) Ibid. |
| a new alternative locally made, frozen organic baby | | | | (3) Baby Food Market Organic and Inorganic: A |
| food - is starting to emerge in trend-leading cities such | | | | Market Study, Datamonitor/RNCOS |
| as New York, Los Angeles, and San Francisco. Each | | | | (4) Baby Food Market An Outlook, March 2005, |
| of these companies has taken a significant step | | | | Datamonitor/RNCOS |
| forward. | | | | (5) Baby Food and Drink, October 2006, Datamonitor |
| For these companies market introduction has a | | | | RNCOS |
| number of challenges. To effectively sell products | | | | (6) Health and Human Services Department, 2004. US |
| through grocery stores they must pay distributors and | | | | Department of Commerce. |
| store placement fees. To maintain profitability they | | | | (7) Helping Children Develop Health Eating Habits, |
| must reduce production costs by using co-packers to | | | | University of Maryland School of Medicine, June 11, |
| make their food. Co-packers require large monthly | | | | 2003. |
| production minimums, cold storage fees, and the baby | | | | |