The baby and toddler food segment may soon explode into another booming frenzy if researchers are to be believed. While the market has been relatively flat for several years, it's inching up, according to Euromonitor, which reports that baby food (excluding formula) saw flat volume growth and current value growth of 3 percent in both 2014 and 2015. But the latest research from Mintel states that following five years of slower annual sales growth, an increase in the birthrate is causing the market for baby/toddler food and drinks to grow almost as steadily as the tots grow themselves.
Sales are pegged at nearly $30 billion U.S. dollars as of 2015, according to Neilsen's 2015 Global Baby Care Survey. Some 46 percent of baby food sales come from North America and Europe, but developing markets are growing fastest.
"For baby care manufacturers, the battle for baby bucks comes with a fair share of challenges," Nielsen adds. Numerous branded and store-brand products compete for mom’s attention and the timeframe. What's more, the timeframe for purchasing all of these foods is relatively short.
Sales of commercially prepared baby food were falling, mainly because busy millennial parents make their own baby foods using less or no sugar, sodium, artificial ingredients and high-temperature processing techniques. But that may soon change.
Nearly 4 million babies are born every year in the U.S., and demographers forecast births to reach levels higher than those at the peak of the Baby Boom. Why? Two major factors:
- A large wave of Gen Y women is entering the child-bearing years.
- The Hispanic population in the U.S. is growing at a fast clip. Add to that the fact that, on average, Hispanics have more children than other demographic groups.
If the predictions about a "big growth spurt" come true, processors will be ready with new deliveries, as they're now developing more better-for-you products to accommodate the healthy food movement in convenient packaging, with clean labels − perhaps more important for babies and toddlers than for any other segment of the food market.
Peas of Mind, San Francisco, focuses on packing as many vegetables as possible into its kids' products. Its new Veggie Tots, launched in May, look like traditional frozen potato tots but are more than 50 percent non-potato veggies, such as carrots, cauliflower and broccoli, so they're nutritious. Jill Litwin, founder and CEO (Litwin is also one of Food Processing's 2016 Kick-Ass Women in Food) says her products "reinvent the classics," taking often unhealthy dishes kids love and creating nutritious versions.
"We focus on the vegetable portion of the plate and foods kids love, like pizza," she says. "As a working mom, I know how tough it is to carve out time to cook and think about what to make." Litwin's products answer the call for health-conscious, easy nutritional foods kids actually like to eat. The company already makes frozen veggie fries, pizza and veggie nuggets, so tots was a natural line extension.
HappyFamily, a mom-founded, organic food company out of New York City, which is now owned by Danone, makes assorted age- and stage-specific, bite-sized foods and snacks made with fruit, whole grains and yogurt. It's new Happy Baby Clearly Crafted premium organic baby foods are packaged similarly to the rest of the products − in easy-to-eat-from, spouted squeeze pouches. But the new film packs are transparent, showing off the foods' full serving of organic superfruits and veggie ingredients. (It's Founder and CEO, Shazi Visram, is also a Food Processing 2016 Kick-Ass Women in Food).
HappyFamily claims the line is the first of its kind in transparent standup pouches. Unveiled in March, the 12 varieties include Pears, Kale & Spinach, Apples, Pumpkin & Carrots, Apples, Guava & Beets and Apples, Kale & Avocados. The company's dry cereals, optimized with probiotics and docosahexaenoic acid (DHA), come in easy-open canisters. It also makes organic shakes and baked organic cheese and veggie snacks.
Founder and CEO Shazi Visram (also one of our 2016 Kick-Ass Women in Food) says parents want openness and honesty from the companies from which they buy products, especially for their babies. "We want to share every aspect of the product story, from the farms where we grow the ingredients to the recipes. Parents can feel confident feeding their children, by knowing and seeing exactly what's inside the pouch."
The company partners with organic farms and suppliers to find the highest quality and best regions in which to source exceptional fruits and vegetables. "As moms, we have first-hand experience with how challenging — and sometimes stressful — it can be to make sure your child is getting the balanced nutrition he or she needs," says Visram.