Table of Contents
Scope and Themes
-
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
-
- Market at a glance
- Category sales concentrated among a few major players
- Breastfeeding advocacy defines competitive context for baby formula
- USDA’s WIC program provides substantial support to baby formula
- In baby food, the competition expands rapidly with the age of the child
- Supermarkets continue to lead despite inroads by other channels
- Subtle demographic shifts will affect market for baby food and drink
- Three brands control baby formula segment
- Gerber continues to dominate baby food and drink
- Heavy new product activity in key segments
- Formula advertisers use a variety of tactics to connect directly to moms
- Usage, attitudes and motivations
- Consumers spend only a short time in the market
- First babies more likely to be breastfed, fuel information overload
- Despite higher prices, majority of moms use toddler foods at least some of the time
- Nutrition tops convenience as reason for using toddler-specific foods
- Moms seek –free foods
- Moms appear open to more store brand options
- More attention needs to be drawn to frozen products
Insights and Opportunities
-
- Less is the new more
-
- Figure 1: Attributes of importance when choosing baby/toddler foods, by whether child under three is first child, October 2008
- Opportunity exists for a value proposition
- Growing with toddlers
- Reimagining the baby food shopping experience
Fast Forward Trends
-
- Simplify and purify
- What it means for baby food and drink
- Trading down (but a little trading up too)
- What it means for baby food and drink
Market Size and Forecast
-
- Key points
- Category faces considerable challenges to growth at every age and stage
- Yet pockets of opportunity still exist
-
- Figure 2: FDMx sales of baby food and drinks, at current prices, 2003-13
- Figure 3: FDMx sales of baby food and drinks, at inflation-adjusted prices, 2003-13
- Wal-Mart sales
Competitive Context
-
- Category sales concentrated among a few major players
- Advocacy of breastfeeding defines the competitive context of baby formula marketing
- USDA’s WIC program provides substantial support to baby formula
- The competition expands rapidly with the age of the child in the baby food and snack segment
- A natural market for mompreneurs
Segment Performance
-
- Key points
- Formula dominates category
- Broader array of alternatives holds other segments in check
-
- Figure 4: FDMx sales of baby food and drinks, by segment, 2006 and 2008
Segment Performance—Baby Formula
-
- Key points
- Macro factors may curb further growth
- Baby formula marketers strive to match breast milk
-
- Figure 5: FDMx sales and forecast of baby formula, at current prices, 2003-13
Segment Performance—Baby Food & Snacks
-
- Key points
- Product improvements and organic haven’t lifted category
- Beyond basic nutrition
- Organic growth
- Toddler-specific foods may have greater potential
-
- Figure 6: FDMx sales and forecast of baby food and snacks, at current prices, 2003-13
Segment Performance—Baby Electrolytes
-
- Key points
- Segment lacks new products to regenerate interest
-
- Figure 7: FDMx sales and forecast of baby electrolytes, at current prices, 2003-13
Segment Performance—Baby Juice
-
- Key points
- Sales declines expected to continue
-
- Figure 8: FDMx sales and forecast of baby juice, at current prices, 2003-13
Retail Channels
-
- Key points
- Supermarkets continue to lead despite inroads by other channels
-
- Figure 9: FDMx sales of baby food and drinks, by retail channel, 2006 and 2008
- Sales of baby food and drink in natural food stores
-
- Figure 10: Natural product supermarket retail sales of baby food and drink, at current prices, three years ending November 4, 2008
Retail Channels—Supermarkets
-
- Key points
- Supermarkets have lost share to channels offering value and convenience
- Organic plus private label could be a formula for success for supermarkets
-
- Figure 11: Supermarket sales of baby food and drinks, 2003-08
Retail Channels—Drug and Mass
-
- Key point
- Mass merchandisers well positioned to increase category sales
- Drugstores win share with convenience
-
- Figure 12: Drug stores and mass merchandisers’* sales of baby food and drinks, 2003-08
Market Drivers
-
- Key points
- Population growth of kids under three, already expected to slow, may decline further with a weakening economy
-
- Figure 13: U.S. population estimates and projections of children age three and under, 2003, 2008, and 2013
- Hispanics continue to grow in importance to the baby food and drink market
-
- Figure 14: U.S. population estimates and projections of children age three and under, by race/Hispanic origin, 2003, 2008, 2013
- Breastfeeding’s slow but steady gains reduce market potential for formula
-
- Figure 15: Breastfeeding rates for U.S. children, based on interviews conducted from July 2001 through December 2007 among caregivers of 19-35 month old children born from 1999-2005
Leading Companies
-
- Key points
- Nestlé looks to leverage synergies between formula and baby food
- Bristol-Myers Squibb plans to spin off Mead Johnson
- Abbott Labs demonstrates commitment to nutrition
- Most private label formula produced by a single company
-
- Figure 16: FDMx sales of baby food and drinks, by leading manufacturers, 2007 and 2008
Brand Share—Baby Formula
-
- Key points
- New WIC contracts propel Similac share gain in 2008
- Private label rises as economy sinks
-
- Figure 17: FDMx brand sales of baby formula in the U.S., 2007 and 2008
Brand Share—Baby Food and Snacks
-
- Key points
- Gerber leverages awareness and size to maintain share lead…
- …but faces competitive challenges on several fronts
- Private label
- Organic
- Toddler
-
- Figure 18: FDMx brand sales of baby food and snacks in the U.S., 2007 and 2008
Brand Share—Baby Electrolytes
-
- Key points
- Pedialyte competes more broadly for rehydration
-
- Figure 19: FDMx brand sales of baby electrolytes in the U.S., 2007 and 2008
Brand Share—Baby Juice
-
- Key point
- Gerber and baby juice segment are one and the same
-
- Figure 20: FDMx brand sales of baby juice in the U.S., 2007 and 2008
Brand Qualities
-
- Gerber anchored by long-term focus on baby and mom
- Product breakthrough a key survival strategy for Beech-Nut
- Earth’s Best, an organic pioneer, continues to expand
Innovation and Innovators
-
- Overview
- What’s been added
- What’s been taken out
- Snack time
- Introducing all new tastes
- The big chill
Advertising and Promotion
-
- Key points
- Formula makers reach out …carefully…directly to moms
- Gerber sets the bar
- Partnerships with doctors, hospitals key marketing practice
- Marketers walk a fine line
- Brand focus: Nestlé Good Start
-
- Figure 21: Nestlé Good Start Supreme/Guarantee TV ad, 2008
- Brand focus: Gerber
- Gerber baby food
-
- Figure 22: Gerber baby food with DHA TV ad, 2008
- Gerber Graduates
-
- Figure 23: Gerber Graduates Lil’ Entrees TV ad, 2007
- Figure 24: Gerber Graduates Mini Fruits TV ad, 2007
-
- Figure 25: Gerber Graduates Variety TV ad, 2007
Web Marketing
-
- Brand websites reach out to information-seeking moms
- Information sources abound
- StrongMoms (Similac) strives for independence and community
- Enfamil keeps it simple with basic information and subtle advocacy for formula-feeding
- Start Healthy Stay Healthy Resource Center leverages the combined strength of Gerber and Nestlé
- Earth’s Best tells organic brand story
Usage of Baby Food and Drinks
-
- Age of child most significant factor in determining household penetration
-
- Figure 26: Household incidence of using baby formula, by age of children in household, April 2007-June 2008
- Younger parents more likely to use formula and baby food
-
- Figure 27: Household incidence of using baby formula, by age, April 2007-June 2008
- Category use higher in lower income households
-
- Figure 28: Household incidence of using baby formula, by household income, April 2007-June 2008
- Incidence of using formula significantly higher in Asian households
-
- Figure 29: Household incidence of using baby formula, by race/Hispanic origin, April 2007-June 2008
- While most moms use formula, exclusive use increases after first child
-
- Figure 30: How babies/toddlers are fed, by whether child under 3 is first child, October 2008
- Lower-income moms more likely to use formula exclusively
-
- Figure 31: How babies/toddlers are fed, by household income, October 2008
Brand Preferences
-
- Key points
- Enfamil retains lead in formula usage
-
- Figure 32: Brands of formula used, April 2007-June 2008
- Use of Gerber baby food nearly universal
-
- Figure 33: Brands of baby food used, April 2007-June 2008
Attitudes and Motivations
-
- Key points
- New moms look to a broad array of information sources
-
- Figure 34: Sources of information on baby nutrition, by whether child under three is first child, October 2008
- Lower income moms more likely to rely on family for feeding advice
-
- Figure 35: Sources of information on baby nutrition, by household income, October 2008
- Doctors’ orders drive incidence of prenatal vitamins, but not breastfeeding supplements
-
- Figure 36: Incidence of taking prenatal vitamins and supplements, October 2008
- A majority of moms use toddler foods at least occasionally
-
- Figure 37: How toddlers are fed, October 2008
- Moms value a mix of nutrition and convenience in toddler foods…
-
- Figure 38: Why toddler foods are used, by whether child under 3 is first child, October 2008
- …but economic pressures may reshape the value proposition
-
- Figure 39: Why toddler foods are used, by household income, October 2008
- What’s most important about baby food is what’s not in it
-
- Figure 40: Attributes of importance when choosing baby/toddler foods, by whether child under 3 is first child, October 2008
- Household income influences what moms look for in baby food
-
- Figure 41: Attributes of importance when choosing baby/toddler foods, by household income, October 2008
- Opportunity for store brands is large as recession forces moms to economize
-
- Figure 42: Opinions and behaviors regarding baby/toddler foods, October 2008
- Experienced moms more likely to economize when shopping for baby food and drink
-
- Figure 43: Opinions and behaviors regarding baby/toddler foods, by whether child under 3 is first child, October 2008
- Lower income moms’ behaviors and beliefs favor economizing
-
- Figure 44: Opinions and behaviors regarding baby/toddler foods, by household income, October 2008
- Awareness of frozen baby food remains low
-
- Figure 45: Interest in frozen baby food, October 2008
Custom Consumer Groups
-
- Mother’s employment status: working vs. non-working
- Working moms more likely to combine breast and bottle
-
- Figure 46: How babies/toddlers are fed, by employment status, October 2008
- More similarities than differences in importance of key attributes
-
- Figure 47: Attributes of importance when choosing baby/toddler foods, by employment status, October 2008
- Working moms more practical, less brand loyal
-
- Figure 48: Opinions and behaviors regarding baby/toddler foods, by employment status, October 2008
Cluster Analysis
-
- Introduction
- Brand Buyers
- Who they are
- Opportunity
- Brand Bargainers
- Who they are
- Opportunity
- Store Branders
- Who they are
- Opportunity
- Cluster characteristics
-
- Figure 49: Baby food clusters, October 2008
- Figure 50: How baby/toddler is fed, by baby food clusters, October 2008
-
- Figure 51: Sources of nutrition information, by baby food clusters, October 2008
- Figure 52: Incidence of taking prenatal vitamins and supplements, by baby food clusters, October 2008
-
- Figure 53: How toddlers will be fed, by baby food clusters, October 2008
- Figure 54: Attributes of importance when choosing food and drinks, by baby food clusters, October 2008
-
- Figure 55: Opinions and behaviors regarding baby/toddler foods, by baby food clusters, October 2008
- Figure 56: Interest in frozen baby food, by baby food clusters, October 2008
- Cluster demographics
-
- Figure 57: Baby food clusters, by income group, October 2008
- Figure 58: Baby food clusters, by employment status, October 2008
- Figure 59: Baby food clusters, by marital status, October 2008
- Cluster methodology
IRI/Builders Panel Data—Key Household Purchase Measures
-
- Consumer insights—baby food and drinks
- Household purchase activity
- Brand map
-
- Figure 60: Brand map, selected brands of baby food/snacks, by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
-
- Figure 61: Key purchase measures for the top brands of baby food/snacks, by household penetration, 2008*
Appendix: IRI/Builders Panel Data Definitions
-
- IRI Consumer Network Metrics
Appendix: Other Useful Consumer Tables
-
- Brands of formula used
-
- Figure 62: Brands of formula used, by household income, April 2007-June 2008
- Incidence of taking prenatal vitamins and supplements
-
- Figure 63: Incidence of taking prenatal vitamins and supplements, by household income, October 2008
- How toddlers are fed
-
- Figure 64: How toddlers are fed, by household income, October 2008
-
- Figure 65: How toddlers are fed, by whether child under 3 is first child, October 2008
Appendix: Trade Associations
Back to top