Global Baby Food Market is Estimated to Garner A Revenue of $72.7 Billion by 2020

Date: 2015-11-08

Global Baby food market is estimated to garner a revenue of $72.7 billion by 2020, registering a CAGR of 6.4 % during 2015 – 2020. Milk formula stands out as the largest segment, primarily fueled by the growing awareness towards baby nutrition and a decrease in breast feeding among the working women population. Prepared baby food is identified as the most promising product segment in this market. Presently, supermarkets account for the largest sales channel in the market, however, over the forecast period, the segment of small grocery retailers is estimated to register the fastest growth rate.  Asia Pacific is the highest revenue generating region in the global baby food market; and is estimated to register highest CAGR of 7.7% during 2015 – 2020. Types of baby foods include Dried Baby Food, Milk Formula, Prepared Baby Food and Other Baby food such as baby snacks and beverages. Among these food products, the Milk formula segment alone contributes to nearly 2/3rd of the market, in terms of value. Dominance of this product category in the market is primarily supplemented by the global demand for milk formula, growing urbanization, increasing disposable incomes and the changing lifestyles.  Further, a significant increase in the count of working women population is a key factor driving the market growth, especially in developing Asian countries. Cow milk based formulas are gaining large adoption in emerging economies. 

Prepared baby food is the second largest market globally and is expected to grow the fastest CAGR during the forecast period. Growing time constraints among parents are the key factors propelling the increased adoption of prepared baby food. Presently, the demand for prepared baby food is largely limited to developed countries, however, over the forecast period, a considerable adoption would be witnessed in developing countries. Presently, demand for dried baby foods is moderate and would gain a steady pace over the forecast period. Increasing consumption of dried food with nutritionally balanced content is a key factor driving the demand for dried baby food products market. 

Supermarkets, hypermarkets, small grocery retails, and health & beauty retailers are the key distribution channels operating in the baby food industry. Supermarkets are the primarily preferred distribution channel followed by health and beauty retailers. However, in developing countries like India, small grocery retailers and health and beauty retailers are among the mostly preferred sales channels. Presently, small grocery retailers hold a comparatively smaller share in the global market; however, this segment is expected to witness the fastest growth during the forecast period. Other sales channels in this market include discounters, non-grocery retailers, and non-store retailing. 

Asia-Pacific leads the global baby food market, followed by Europe, North America and LAMEA. Asia Pacific is the largest market for milk formula, occupying more than half of the overall global market share. This growth is majorly supplemented by improving economies and changing lifestyles of individuals in this region. Huge demand for prepared baby food in North American market is due to the presence of multi nutrition with balanced quantity of required nutrition in one pack. Growing concerns regarding the use of pesticides in food products, results in a larger demand for organic and premium baby food. Demand for baby food is expected to grow in the regions such as Middle East and African countries, due to the progressive awareness about the healthy baby food among the parents. 

The growth of the world baby food market is largely supplemented by the growing awareness for nutrition, rise in organized retail marketing, urbanization and a considerable increase in the count of working women population  
The segment of milk formula would go on to occupy the largest market share followed by the product segment of prepared foods 
China, India and Indonesia are the most promising markets and would grow significantly over the forecast period
The Asia Pacific region would register the highest CAGR of 7.7% during 2015 – 2020 
Key players operating in this market are primarily focusing on acquisition as a key strategy to strengthen their market presence. Acquisition is one of the key strategies followed by companies operating in this market. In 2007, Nestle acquired Gerber to expand its business segment in baby food. Also, in the step to make its foot hold in Asia, Danone acquired Wockhardt Nutrition India. Companies like Nestle and Abbott Laboratories are adopting groundbreaking marketing and branding strategies with an aim to strengthening their customer base. “

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