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.
In fact, national survey findings show moms are indeed reading food labels in search of nutritious, natural foods without synthetic colors or preservatives, according to commissioned research from the Natural Colors Div. of Chr. Hansen, Milwaukee. "Moms are sending a clear message to food manufacturers: She wants healthy and natural foods, she’s paying attention to ingredients and nutrition when making food purchases, and she's willing to pay more for foods she perceives as being healthier," the company's report states.
The survey involved more than 1,100 moms across the U.S., the majority of whom (71 percent) believe the foods they eat affect their quality of life. Nutritional content is extremely important to moms, the survey found, which was cited by 86 percent of respondents as the key purchase factor.
Plum Organics, Emeryville, Calif., is borrowing an idea from another Campbell Soup business, Pepperidge Farm, which manufactures Goldfish crackers. Plum is unveiling a new line of organic cheddar crackers for toddlers called Mighty Dinos. One of several new products Plum Organics highlighted at Natural Products Expo West, Mighty Dinos look like smaller Goldfish crackers, but easily dissolve in toddlers' mouths. This year, Plum Organics also will launch the GrowWell line of purees and add to its successful Mighty snacks line with new Mighty Veggies and Mighty Sticks for tots on the go.
Speaking of borrowing ideas, Annie's Homegrown, Berkeley, Calif., is rolling out organic whole-milk yogurt, presumably manufactured by General Mills sibling Yoplait. The four-packs come in Strawberry, Very Vanilla and Berry Patch as well as a grass-fed version. Free of artificial flavors, synthetic colors and preservatives, the products are Annie's first dairy offerings, made with milk from cows not treated with antibiotics, synthetic hormones or exposure to persistent pesticides. All are sweetened with organic fruit and cane sugar and like other Annie's products claim zero artificial flavors, preservatives or GMOs.
Aimed at kids, the yogurt should be well received, according to Annie's customer surveys, which have long requested the company to add yogurt to its lineup.
And Beech-Nut Nutrition, Amsterdam, N.Y., claims it's taking transparency to a new level with the spring launch of 100 percent "natural" food for babies. The new jars for the Naturals and Organics lines have no paper label. Instead, a small transparent film label emphasizes transparency and shows off the products' textures, color and ingredients. The products contain no artificial ingredients or preservatives.
"What we’re putting on the front, which is a key to who we are with this product, is 'Just Honey Crisp Apples.' When you flip over to the ingredients, it says Honey Crisp Apples," explains Andy Dahlen, vice president of marketing and sales. The products are processed using a method said to eliminate ascorbic acid and leave vegetables such as carrots bright orange and beets red. The foods are first pureed cold and are next deaerated, cooked using indirect heat and packed.
"To avoid losing any nutrients or flavor, we blend our food before cooking," Dahlen adds. "That’s why we call it a cold puree. The process also allows our fruits and veggies to retain their true color, flavor, aroma, texture and nutrients." The new line includes varieties such as mango, chicken, curry & rice, corn & potato chowder and prunes.
Beech-Nut says it realized moms were preparing more baby food in their own kitchens and wanted to address that segment with a line inspired by the creativity of millennial moms.
Gerber, the No. 1-selling baby food brand in the U.S. from Nestle Infant Nutrition, Florham Park, N.J. expanded its organic 3rd Foods group of products late last year with its Lil’ Bits Recipes dinners. The toddler-sized, soft pieces of fruits and vegetables have a texture that helps tots learn to chew. Lil' Bits also are made via what Gerber calls a "unique and revolutionary cooking method" that allows the chewy bits to be soft enough for the transition to table food but not too soft.
Introducing pureed foods with soft pieces at this time allows children to explore multiple textures before transitioning fully to solid, table foods, according to the company's research. The foods come in handy plastic tubs and a variety of flavors, including seven fruits and three vegetables.
Nielsen polled respondents in 60 countries to understand what's driving product choices in the baby/toddler segment and found in developing countries a rising middle class and more working moms. Buchanan says more than a third of those surveyed specified good nutrition and safe ingredients/processing as most critical when deciding what to purchase. "Consumers are increasingly health conscious and looking for natural, minimally processed foods, and the stakes are even higher when it comes to their babies," she says. "More parents are seeking foods that set their children up for a healthy life -- even if it comes at a premium. This segment will continue to grow as more parents can afford to trade up."