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Baby Food and Babycare Supplies: U.S. Market Trends

United States babycare market: $6 billion industry in 2012


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2014-03-12 16:47:01 - Baby Food and Babycare Supplies: U.S. Market Trends - a new market research report on companiesandmarkets.com

The last place parents cut spending is on their kids, but economic troubles, resulting birth rate declines, and other factors have caused sales of baby food and babycare supplies to decline over the last five years. The two categories represent a combined $11.5 billion retail market, with sales equally split between the two.Retail sales of the baby food category, including both infant formula and prepared baby food, were $5.7 billion in 2012, declining by a CAGR of 2.5% since 2008. Sales were hammered by the recession and continued to suffer as lingering economic difficulties resulted in declining birth rates and reduced spending by consumers. Further depressing sales has been an increase in breastfeeding, as well as feeding infants and toddlers

 

 

what the family eats. Other factors contributing to the sales decline include health and safety concerns over formula in particular, which accounts for over 70% of category sales.Retail sales of the babycare supplies category, consisting of the diapers, wipes, and baby personal care segments, were $5.8 billion in 2012. The category declined by a CAGR of 1.3% between 2008 and 2012. Eroding sales of diapers, over 60% of the category, drove overall sales declines, due to the same economic factors affecting baby food. Wipes and baby personal care products, much less expensive for consumers than diapers, actually experienced sales growth during the period, but at sluggish rates.The baby food and babycare supplies market is highly concentrated with the majority of sales coming from a few marketers. Nestle/Gerber, Abbott Laboratories and Mead Johnson Nutrition control nearly 90% of the baby food category. Gerber is dominant in prepared baby food, while Abbott and Mead are dominant in infant formula. Kimberly-Clark and Procter & Gamble control 65% of the babycare supplies category dollar sales due to their strength in diapers and wipes. Johnson & Johnson controls half of the smaller baby personal care segment.The overall market presents huge challenges and opportunities for both marketers and retailers. Parents of infants must buy certain baby products, but they increasingly are buying less, and looking for the best deals on high ticket diapers and infant formula. Larger marketers are entrenched in the market, making it challenging for smaller marketers to compete and succeed. Yet many have done so by innovating and targeting product and marketing efforts. Times will continue to be tough for the largest segments of the baby market. Infant formula and diapers will continue to struggle and decline since they are highly dependent on birth rates, and represent a large household expenditure for struggling families. Sales of prepared baby food, wipes and baby personal care are expected to grow at slow rates. Premium-priced products will help drive growth for prepared baby food and baby personal care, while wipes will benefit from their germ-fighting properties.

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