Baby Food and Drink - UK - April 2017

Baby Food and Drink - UK - April 2017

Apr 2017 Mintel Baby FoodN/A Price :
$ 2479

Seeds of change – which could revolutionise the baby food and drink retail landscape – have been planted by the discounters. 2016 saw Aldi extend its offering dramatically and Lidl make its first venture into this category. If this evolving presence is well-received by parents this could curb future price inflation and put brands under real pressure from private label for the first time.

Table of Content

OVERVIEW
What you need to know
Products covered in this report

EXECUTIVE SUMMARY
The market
After years of strong growth, value sales slip in 2016
Figure 1: Best- and worst-case forecast of total UK retail value sales of baby food, drink and milk, 2011-21
Companies and brands
Ella’s Kitchen pulls away from the pack
Figure 2: Leading brands’ shares of sales in the UK wet and dry baby food market, by value, 2016*
Strong performances in snacks from Organix, Kiddylicious and Bear
Aptamil steals share from Cow & Gate in baby milk despite sales losses
Driven by baby milk, 2016 sees a rise in launch activity
Premiumisation, exciting flavours and positive nutrition emerge as key trends
Adspend slumps to five-year low
The consumer
Homemade is preferred, but most parents use manufactured baby meals
Figure 3: Frequency of usage of baby food and drink, by type, February 2017
Supermarkets are the favoured channel
Figure 4: Retailers from which baby/toddler food and drink is purchased, February 2017
Contributing to babies’ five-a-day holds strong appeal
Figure 5: Factors which would make parents pick one baby/toddler food and drink product over another, February 2017
On-the-go snacking presents opportunities
Figure 6: Interest in products and in-store solutions, February 2017
Vegetable-based weaning is seen in a very positive light
A third of parents prefer vegetarian baby/toddler meals
Figure 7: Attitudes towards baby food and drink, February 2017
What we think

ISSUES AND INSIGHTS
Targeting the on-the-go market can build on growth in baby snacks
The facts
The implications
The health halo of plant proteins is igniting demand for these ingredients in baby food
The facts
The implications
Could the discounters change the retail landscape in baby food and drink as they have done in babycare?
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
After years of strong growth, value sales slip in 2016
Volume sales expected to benefit from rising birth rates
Baby milk responsible for decline in 2016
Value growth in baby food and snacks
Birth rate edges up in 2015
Sugar remains in the spotlight

MARKET SIZE AND FORECAST
After years of strong growth, value sales slip in 2016
Figure 8: Total UK retail volume and value sales of baby food, drink and milk, 2011-21
The future
Figure 9: Best- and worst-case forecast of total UK retail volume sales of baby food, drink and milk, 2011-21
Figure 10: Best- and worst-case forecast of total UK retail value sales of baby food, drink and milk, 2011-21
Forecast methodology

MARKET SEGMENTATION
Baby milk falls into decline in 2016
Value sales of baby food up 3% year on year
Figure 11: UK retail value and volume sales of baby food, drink and milk, by segment, 2013-16
Booming sales of baby snacks
No end to the decline in baby drinks

MARKET DRIVERS
Birth rate edges up in 2015
Figure 12: Live births in England and Wales, 2010-15
Figure 13: Live births in England and Wales, by area of residence of mother, 2015
Decline predicted in number of 0-4s over 2016-21 poses a challenge
Figure 14: Trends in the age structure of the UK population, 2011-21
Breastfeeding rates appear to be falling
Figure 15: Percentage of mothers initiating breastfeeding, 2008/09-2015/16
Rise in working mothers bodes well for the market
Health remains a focus for parents
Sugar remains in the spotlight
Positive nutrition appeals to parents
Household budgets to come under pressure
NPD looks to appeal to savvy shoppers

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Ella’s Kitchen pulls away from the pack …
Own-label gains share, but still plays a minority role
Strong performances in snacks from Organix, Kiddylicious and Bear
Aptamil steals share from Cow & Gate despite sales losses
Driven by baby milk, 2016 sees a rise in launch activity
Premiumisation and positive nutrition emerge as key trends
Adspend slumps to five-year low

MARKET SHARE
Ella’s Kitchen pulls away from the pack
Trading up also benefited Little Dish
Smaller brands made progress in 2016
Mid-priced ranges are squeezed …
while own-label gains share, but still plays a minority role
Figure 16: Leading brands’ sales and shares in the UK wet and dry baby food market, by value and volume, 2014-16
Figure 17: Leading manufacturers’ sales and shares in the UK wet and dry baby food market, by value and volume, 2014-16
Strong performances from Organix, Kiddylicious and Bear
Farley’s rusks fall out of favour
Figure 18: Leading brands’ sales and shares in the UK baby snacks market, by value and volume, 2014-16
Figure 19: Leading manufacturers’ sales and shares in the UK baby snacks market, by value and volume, 2014-16
Aptamil steals share from Cow & Gate despite sales losses
Figure 20: Leading brands’ sales and shares in the UK baby milk market, by value and volume, 2014-16
Figure 21: Leading manufacturers’ sales and shares in the UK baby milk market, by value and volume, 2014-16
Sales of Heinz baby drinks continue to tumble
Figure 22: Leading brands’ sales and shares in the UK baby milk market, by value and volume, 2014-16

LAUNCH ACTIVITY AND INNOVATION
Driven by baby milk, 2016 sees a rise in launch activity
Launch activity in baby meals stabilises
Premiumisation, exciting flavours and positive nutrition emerge as key trends
Figure 23: Share of new product launches within the UK baby food, drink and milk market, by sub-category, 2012-16
Little Dish storms up the NPD ranks
Piccolo looks to NPD to build on its early success
Annabel Karmel ventures into the frozen aisle
Aldi branches out into baby food, drink and milk
Figure 24: Share of new product launches within the UK baby food, drink and milk market, by brands vs own-label, 2013-16
Figure 25: Share of new product launches within the UK baby food, drink and milk market, by company, 2012-16
Superfood ingredients are a focus of NPD in snacks
Kiddylicious and Little Dish look to plant proteins
Heinz makes its first foray into biscuits
Jump in L/N/R innovation in 2016
Figure 26: Share of new product launches within the UK baby food market, by selected nutritional claims, 2012-17*
A big rise in the five-a-day claim in 2016
Figure 27: Share of new product launches within the UK baby food market which contribute to at least one portion of babies’ recommended five-a-day, by sub-category, 2012-16
Launches of baby formula/milk products rocket in 2016
Kendamil brings newness to the baby milk category
Hipp Organic launches first specialist milk

ADVERTISING AND MARKETING ACTIVITY
Adspend slumps to five-year low
Figure 28: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, 2012-16
Figure 29: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, by category, 2012-16
Danone grows its share of adspend
Cow & Gate supports visibility of its Baby Club
Aptamil pushes follow-on milk and Profutura range
Figure 30: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, by advertiser, (sorted by total in 2016), 2012-16
Ella’s Kitchen promotes weaning with veg
Petits Filous uses social media to crowdsource new flavour ideas
Nielsen Ad Intel coverage

THE CONSUMER – WHAT YOU NEED TO KNOW
Homemade is preferred, but most parents use manufactured baby meals
Supermarkets are the favoured channel
Contributing to babies’ five-a-day holds strong appeal
On-the-go snacking presents opportunities
Vegetable-based weaning is seen in a very positive light
A third of parents prefer vegetarian baby/toddler meals

USAGE OF BABY FOOD AND DRINK
Homemade baby food is a daily staple for the majority …
 yet still over half of parents use manufactured baby food
Young and wealthy parents are key users of bought baby food
Figure 31: Usage of baby food and drink, by type, December 2015 and February 2017
Growing user base for baby snacks
Figure 32: Frequency of usage of baby food and drink, by type, February 2017
Usage of baby milk geared towards men and young parents
Figure 33: Repertoire of different types of baby food and drink used, February 2017

WHERE BABY FOOD AND DRINK IS PURCHASED
Supermarkets remain the favoured channel …
but baby food and drink ranges may be squeezed
A third of parents buy baby food/drink from discounters
Aldi and Lidl develop their private label offering
Figure 34: Retailers from which baby/toddler food and drink is purchased, February 2017
Figure 35: Retailers from which baby/toddler food and drink is purchased, by product type, February 2017
Purchasing at convenience stores peaks at 43% of Londoners
The convenience channel offers growth potential

CHOICE FACTORS
Contributing to babies’ five-a-day holds strong appeal
Strong interest from parents…
Figure 36: Factors which would make parents pick one baby/toddler food and drink product over another, February 2017
and from brands
Untapped opportunities in snacks
Cold-pressed can give differentiation
Providing help in achieving the five-a-day
Non-digital solutions can appeal
Superfoods hold most sway among young parents and ABs
Overall interest in superfoods fuels interest in baby food
Superfoods must cut through the hype
Scope to put the focus on good fats
Being approved by nutritionists provides a mark that elicits trust

INTEREST IN PRODUCTS AND IN-STORE SOLUTIONS
On-the-go snacking presents opportunities
Grab-and-go sections
Single-portion packs
Figure 37: Interest in products and in-store solutions, February 2017
Snacks for older children appeal to a third of parents
Image of toddler snacks as healthy fuels interest
‘Green’ products are a good fit for baby food/drink
Debate over pouches
Offsetting environmental impact

ATTITUDES TOWARDS BABY FOOD AND DRINK
Vegetable-based weaning is seen in a very positive light …
Lifestyle positioning can build trust
Figure 38: Attitudes towards baby food and drink, February 2017
as are savoury snacks
A third of parents prefer vegetarian baby/toddler meals
Plant protein can leverage green, safe and health credentials in baby food
A third of savoury baby meals feature vegetarian claim
The perceived benefits of spices are two-fold
‘Foodie’ trend drives interest in adventurous baby food
Herbs and spices have a place in sweet as well as savoury dishes
Brands can build loyalty by supporting flavour exploration
Consumers are switched onto the health-boosting potential of spices

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
Forecast Methodology

APPENDIX – MARKET SIZE AND FORECAST
Figure 39: Best- and worst-case forecast of total UK retail value sales of baby food, drink and milk, 2016-21
Figure 40: Best- and worst-case forecast of total UK retail volume sales of baby food, drink and milk, 2016-21

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