Just like the little people who eat baby food, sales of the products can be fussy, surging or declining depending on uncontrollable factors such as birth rates and unemployment. Given today’s tenuous economic climate, this category could use a pacifier.
Statistics from the Centers for Disease Control and Prevention show that births declined 4 percent between 2007 and 2009 and through the first half of 2010.
Similarly, sales of baby food (including baby formula) dropped 5.6 percent to $5.5 billion in 2010, according to Mintel. The Chicago-based market research firm expects the category to continue its decline through 2012.
But before you shed a tear, the news isn’t all bad. Baby formula makes up the biggest chunk of this category and is the leading factor in sales declines. Meanwhile, baby food and snack products (the second-largest segment) are growing. This subcategory increased 3.4 percentage points in 2010 to grab 25 percent of total market share and $1.4 billion in sales in 2010, Mintel reports. The firm predicts baby food and snack sales will continue to grow by as much as 4 percent through 2012.
Because parents of young children often don’t have the time to shop at several stores, natural products retailers are wise to invest in a diversified baby food section so customers can pick up smashed sweet potatoes for Junior along with produce and pasta for themselves. But you may have only one shot to impress potential new customers seeking healthful foods for their babies (and themselves). After all, if they can’t find everything they need in your store, they might head to the supermarket. Mintel reports that conventional supermarkets have maintained an overwhelming share of baby food and drink sales at 81.1 percent in 2009—only a 0.8 percent drop from the year before.
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