Organic Baby Food – Market Insights
Infant milk formula is used as a complete or partial substitute for breast milk. The milk powder is infused with nutrients that aid the overall development of a baby.
Modern farming techniques utilize a large amount of chemical fertilizers and pesticides to achieve a good yield. Presence of such chemicals in food causes many short term and long term consequences on human health. For instance, the preservative nitrite is converted into carcinogenic compound nitrosamines by the human body. Demand for organic techniques used for food farming is rising significantly since chemicals such as potassium chloride, heavy metals, and ammonium nitrate are not used in this technique. In addition, the demand for organic baby food is on the rise on account of rising awareness about harmful chemicals and the adverse effects they pose on infants.
Online organic baby food sales is witnessing a surge due to convenience and ease of payment. Rapid advancements in the field of internet services and the influx of services such as 4G and 5G coupled with the augmented use of smartphones in developing countries of Asia Pacific such as India and China are some of the major factors driving the growth of the organic baby food market through online sales. Further, rising consumer inclination toward online purchases, emergence of several e-commerce companies, and channel expansion strategies adopted by the leading players operating in the market for organic baby food are also fuelling the growth of the online segment.
Asia Pacific is the fastest growing market for organic baby food. This region comprise countries with the highest population and birth rates in the world such as India and China. This region held nearly half of the world’s infant population at 311 million in 2016. Increasing awareness about infant nutrition and health has augmented organic baby food market growth in Asia Pacific. Further, owing to the lucrative growth opportunities prevailing in this region, several market players are looking to penetrate into this region for expanding their businesses.
North America and Europe dominated the organic baby food market in 2016, with North America holding the prominent position. The organic baby food market in North America was valued at US$ 2,092.9 Mn in 2016. Stringent government regulations pertaining to the quality of baby food coupled with high consumer awareness regarding the harmful effects of chemicals on infant development has boosted the growth of the organic baby food market in this region. According to a report published by the Food and Drug Administration (FDA) of United States, 6 out of 10 U.S. citizens believe that organic food is better for their health. Stringent regulatory scenario in the U.S. ensures that the quality of the product is at par with the required standards. According to Title 21 of the Code of Federal Regulations (CFR), “the manufacture or distribution of infant formula that will be introduced to the interstate commerce in the United States must comply with the requirements of the Federal Food, Drug, and Cosmetic Act (the act), 21 USC 321 et seq., and FDA's regulations implementing the act”. These factors are highly responsible for the growth of the organic baby food market in North America.
The organic baby food market in Latin America is highly consolidated with companies such as The Kraft Heinz Company and Nestle S.A. possessing dominant market shares. Demand for organic baby food is projected to increase significantly due to the transition in lifestyle of consumers in terms of their feeding habits and rising purchasing power of the consumers, among others. The major players are projected to retain their dominance in this region due to the popularity of their products and the trust gained through the same. However, local players find it hard to secure a favorable position mainly due to lack of investments as a result of the sluggish economic growth in the region. However, as major countries such as Brazil, Argentina, and Colombia are expected to achieve economic and political stability in near future, the market scenario will, in turn, change accordingly.
Consumers residing in countries such as the U.A.E., Qatar, and Saudi Arabia exhibit a high purchasing power due to which they can afford premium quality products such as organic baby food. Further, the demand for the same is also rising on account of increasing awareness on the need for good health and wellbeing. Further, consumers in these countries are aware of the repercussions of inadequate infant nutrition as well.
The global organic baby food market was valued at US$ 6,516.0 Mn in 2016 and is expected to expand at a CAGR of 10.8%, in terms of revenue, during 2017 – 2025.
Figure 1. Global Organic Baby Food Market Share (2016), By Region
North America dominated the global organic baby food market in 2016 and is expected to retain its dominance throughout the forecast period. However, Asia Pacific is expected to project the fastest growth during the forecast period. Rapid adoption of organic baby food products among the consumers is one of the prime factors fuelling the growth of the market in Asia Pacific.
Major Players in the Global Organic Baby Food Market
The major players in the organic baby food market are Abbott Laboratories, Groupe Danone, Nestlé S.A., Kraft Heinz, Company Hero Group, Amara Organics, Baby Gourmet Foods Inc., Bellamy's Australia, Green Monkey, Healthy Sprouts Foods, HiPP, Initiative Foods, Little Duck Organics, North Castle Partners, Olli Organic, One Earth Farms, Tastybaby, and Vitagermine, among others.
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