FACTORS INFLUENCING THE GLOBAL INFANT FORMULA AND BABY FOOD MARKETPosted by Clive Cooper on October 30th, 2018 An infant formula refers to a nutritional replacement for breast milk which is made according to the needs of an infant under the age of one. Infant formulas are widely available in different forms like powered, concentrated into liquids or the consumer-friendly ready to use packets. In today’s fast-paced world, infant formulas are essential in many households as they develop a baby’s mental and physical health. Baby food is a term given to products which are intended for the consumption of children below the age of four. They are soft, easily chewable and have the correct nutritional balance. Baby food is also available in different forms such as soup, cereal, snacks or drinks. The main aim of the manufacturers is to make the product easily consumable. In order to appeal the target audience of most toddlers and young parents, baby food and infant formula makers use various forms of innovative packaging that helps to market their products. These different products may vary in their flavor, taste and nutritional value. The global market for baby food and infant formula is currently on the rise owing to factors such as growing urbanization and increase in the working population. The market is expected to have an annual growth rate of 14.85% by the end of 2026. The baby food and infant formula market is segmented on the basis of the products, packaging, health benefits, ingredients and the distribution channels that are used. According to forecasts, the market is dominated by milk-based infant formulas as they account for the highest share in terms of revenue. Although infant formulas are considered to be an alternative for breast milk, they sometimes end up being a singular source of nutrition for children. The main drivers for the global infant formula and baby food market are:
The growth of the infant formula and baby food market is not limited to developed regions. The Asia Pacific region, which is mostly made up of developing economies such as India and China is also witnessing a change in the buying habits of consumers and therefore, a subsequent rise in demand. This rise is backed by the increased disposable income of people and the rapid urbanization in the Asia Pacific region. Also, with the emergence of organic baby food these untapped regional markets are expected to witness significant growth as in many developing economies especially China, Japan and India, parents are skeptical about feeding factory manufactured products to their kids. The organic tag acts as a great marketing tool in removing these doubts, and they are also healthier as they are free from all kinds of pesticides and preservatives. Furthermore, a new trend has been emerging where e-commerce is set to take over the market operations. The baby food market, which has always been acclaimed for its tangibility, i.e. the ability of the buyer to touch, smell or sample is seeing a change in the consumer’s preferences. Multiple options while choosing products, the convenience of home-delivery and access to a pool of online information is motivating buyers to shift to e-commerce platforms. The major players of the infant formula and baby food are, therefore, re-entering the market with a set of new rules and ideas. Despite this, there are a few factors that are restraining the global infant formula and baby food market. One of the main factors is the rise in women empowerment and lower fertility rates. Studies have shown a very directly proportional relationship between women empowerment and lower fertility rates. The reason attributed to this is that educated women tend to have their first child at a later stage in their life and as a result, have fewer children. With their increased participation in the corporate world, the average age for marriage has increased in women. Hence, it is quite evident that educated women tend to have fewer children than illiterate women. Another factor restraining the baby food market is the health risks it possesses. Consumers are kept under the impression that these products are a necessity, but most of the times they are falsely advertised with exaggerated claims. In 2008, an incident in China claimed the lives of six babies and left around 54000 babies hospitalized. Later, the authorities found out that chemicals had been added to their milk in order portray it as containing protein-rich content. Due to these incidents, safety concerns are on the rise worldwide, and organizations such as The International Baby Food Action Network (IBFAN) are protesting against the baby food culture saying that it is dangerously affecting breastfeeding and causing people to rely on it rather than more nutritious homemade food. Most consumers while purchasing baby food products give preference to the availability of varied products and brand value. They also prefer cost-effective products which give them the required benefits at a competitive price. Reputed companies like Nestle, Danone and the Kraft Heinz Company are preferred more by the consumers. Other major market players include Beech-Nut Nutrition Corporation, Hipp, Beingmate Group Co Ltd, Morinaga Milk Industry Co Ltd, Mead Johnson Nutrition Company, Abbott Nutrition, Hero Ag, The Hain Celestial Group Inc., Baby Gourmet Foods Inc, Plum Pbc (Plum Organics) and Perrigo Company Plc Like it? Share it! |