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Baby Supplementary Food - China - October 2017

OVERVIEW
What you need to know
Products covered in this Report
Definition
Figure 1: Mintel’s definition of different income groups, China
EXECUTIVE SUMMARY
The market
Value growth driven by consumers trading up
Figure 2: Retail market value and volume of baby supplementary food, China, 2013-17
Figure 3: Best- and worst-case forecast of retail baby supplementary food market, by value, China, 2012-22
A more diverse category, along with more sophisticated consumers
Key players
Online channels help foreign brands gain reputation
Figure 4: Leading companies’ share of retail baby supplementary food market, China, 2015 and 2016
Naturalness is preferred
Spicing up the category with a note on adultness
The consumer
Opportunity for baby biscuits and rusks
Figure 5: Penetration of baby food, China, 2015 and 2017
Sophisticated consumers put off the starting point of baby food compared to the majority
Figure 6: Starting point of baby food usage, China, June 2017
Packaged meat/fish dishes see greater potential
Figure 7: Penetration of different types of homemade baby food, China, June 2017
Natural ingredients as the top priority
Figure 8: Valued product information, China, June 2017
Parents are open to various information sources
Figure 9: Purchase influencers, China, June 2017
What we think
ISSUES AND INSIGHTS
Opportunity for baby’s drinking water
The facts
The implications
Figure 10: Introduction of Nongfu Spring’s baby drinking water, China, 2017
Figure 11: Nongfu Spring’s list of trace element content, China, 2017
Figure 12: Baby drinking water brands with L/N/R sodium claims, Slovakia, Italy and France, 2016-17
Figure 13: Baby drinking water using emotional communication, China, 2017
Figure 14: Flavoured water for babies, Poland and Czech Republic, 2017
Convince parents with higher educational level
The facts
The implications
Figure 15: Beech-Nut’s commercial, US, 2017
Figure 16: Products with ingredients that can be associated with certain benefits, US, Hong Kong and Vietnam, 2016-17
How can packaged baby foods fill the gaps where homemade foods do not fit in?
The facts
The implications
Figure 17: Innovative baby snack forms that are less seen in the Chinese market, US, Japan and Austria, 2017
Figure 18: Baby food products that are both easy to use and positioned as on the go, Japan, US and Switzerland, 2017
Figure 19: Pigeon salmon and corn porridge, China, 2017
THE MARKET – WHAT YOU NEED TO KNOW
Baby supplementary food market driven by trading up
Deeper understanding of the category requiring more sophisticated marketing approaches
MARKET SIZE AND FORECAST
Value growth triggered by trading up
Figure 20: Retail market value and volume of baby supplementary food, China, 2013-17
Figure 21: Best- and worst-case forecast of retail baby supplementary food market, by value, China, 2012-22
The second-child policy will further boost the category
Figure 22: Best- and worst-case forecast of retail baby supplementary food market, by volume, China, 2012-22
MARKET SEGMENTATION
Looking into a more diverse category
Figure 23: Volume share of baby supplementary food segments, China, 2016
Figure 24: New launches of baby supplementary food, by segment, China, Japan, South Korea, US and UK, 2016
Figure 25: Baby food products with a touch on localness, Japan, 2016-17
Biscuits or rusks as entry products
Figure 26: Biscuits claiming to help babies learn certain skills, UK and South Korea, 2017
Purée – Convenience and authenticity
Figure 27: Select package types of baby supplementary food, China, 2014-16
Figure 28: Plum Organics “Eat Your Colors”, US, 2016
MARKET FACTORS
National Dietary Guideline has detailed instruction for baby food
Figure 29: Vitamin D supplement for baby, China, 2016
Extended parental leave enables parents to spend more time researching
Imported volume and value will see great growth in 2017
Figure 30: Imported volume of baby supplementary food in the Chinese market, by country, H1 2016 and H1 2017
More from high income groups are considering having a second child
Figure 31: Willingness of having a second child, by city, China, June 2017
Figure 32: Females’ intention of having a second child, by household income levels, China, January and June 2017
More nuclear families among those with a higher educational level
Figure 33: Family structure, by gender, age and educational level, China, June 2017
KEY PLAYERS – WHAT YOU NEED TO KNOW
Foreign brands are booming via online channels
There are new angles of communication
MARKET SHARE
Heinz maintains competitive edge
Figure 34: Leading companies’ share of retail baby supplementary food market, China, 2015 and 2016
Foreign brands gaining reputation through online channels
Figure 35: Select claims of baby supplementary food, by import status, 2014-17(Aug)
Local manufacturers taking the market by diversified offerings
Figure 36: New launches of baby supplementary food, by brand, China, 2014-16
COMPETITIVE STRATEGIES
Using ingredients that are usually found in infant milk formula
Figure 37: Gerber’s cereal with DHA and probiotics, China, 2017
Communicating freshness from new angles
Figure 38: Brands communicating freshness through packaging and delivery, China, 2017
Figure 39: Born Pure introducing high-pressure processing technology, Australia, 2016
Figure 40: Bebecook rice ball, which can be used to create various types of dishes, South Korea, 2015
Gaining consumers’ attention from prenatal stage
Figure 41: Eastwes “My Lucky Baby”, China, 2017
Figure 42: Beverages designed for pregnant women, India, Norway and Japan, 2016-17
WHO’S INNOVATING?
More about being natural rather than functional benefits
Figure 43: Select claims of baby supplementary food, China, 2014-16
Figure 44: Select claims of baby supplementary food, China and US, 2016
Figure 45: Baby food with “ease to use” claim, China, 2017
Sauce and seasonings for homemade baby supplementary food
Figure 46: Oil and sauce for babies, Vietnam, 2016-17
Figure 47: Pea pasta and pasta sauce, China, 2017
Figure 48: Salt claiming to be suitable for pregnant women, China, 2017
More possibilities in drink segment
Figure 49: Jelly juice for babies, UK, 2017
Figure 50: Tea products targeting babies, Germany and South Korea, 2017
Avoid clichés in the category
Figure 51: Baby supplementary food with a diverse selection of vegetables, China, 2017
Figure 52: Baby supplementary food featuring a touch on adults’ dishes, Spain and Japan, 2017
THE CONSUMER – WHAT YOU NEED TO KNOW
Packaged and homemade baby food are not exclusive
Parents moving forward the starting point of packaged baby food
Naturalness as the top priority
Parents love going to professionals for advice on baby food
USAGE OF BABY FOOD
Homemade food advocators are also using packaged products
Figure 53: Penetration of baby food, China, June 2017
Biscuits and rusks are more likely to be daily treats
Figure 54: Penetration of packaged baby supplementary food, China, 2015 and 2017
Figure 55: Frequency of packaged baby supplementary food consumption, China, June 2017
Preference for baby supplementary food across different regions
Figure 56: Penetration of packaged baby supplementary food, by city, China, June 2017
STARTING POINT OF BABY FOOD USAGE
Baby food comes at an earlier stage in high-income families
Figure 57: Starting point of baby food usage, China, June 2017
Chengdu consumers give supplementary food to kids earlier
Figure 58: Starting point of using baby supplementary food, by city, China, June 2017
HOMEMADE BABY FOOD
Staple food is the most common type of homemade supplementary food
Figure 59: Penetration of different types of homemade baby food, China, June 2017
Figure 60: Weighted average types of baby supplementary food consumed, by baby’s age, China, June 2017
Different preference across tier one cities
Figure 61: Penetration of different types of homemade baby food, by city, China, June 2017
Homemade food users have concerns on additives and salt intake
Figure 62: Penetration of different types of homemade baby food, by consumers who value safety-related product features, China, June 2017
Figure 63: Penetration of different types of homemade baby food, China, June 2017
VALUED PRODUCT INFORMATION
Naturalness gains more attention while “imported” claim has lost its halo
Figure 64: Valued product information, China, June 2017
Educational benefits are welcomed
Figure 65: The lid of Heinz product serving as toy, China, 2017
L/N/R sugar/salt claims are niche
Figure 66: Valued information – TURF analysis, June 2017
Clean label is favoured by the elder ones
Figure 67: Valued product information, by age, China, June 2017
PURCHASE INFLUENCERS
Parents are open to various information sources
Figure 68: Purchase influencers, China, June 2017
Consumers in Chengdu are in great need of category knowledge
Figure 69: Information sources that will affect purchase decision, by city, China, June 2017
Consumers with a higher educational level are less likely to be tricked
Figure 70: Purchase influencers, by educational level, China, June 2017
MEET THE MINTROPOLITANS
Feed baby with packaged food at a later age
Figure 71: Starting point of baby food usage, by consumer classification, China, June 2017
Figure 72: Homemade baby food, by consumer classification, China, June 2017
MinTs have higher requirements on packaged baby food
Figure 73: Valued product information, by consumer classification, China, June 2017
On-pack label or instructions are more important to MinTs
Figure 74: Purchase influencers, by consumer classification, China, June 2017
APPENDIX – MARKET SIZE AND FORECAST
Figure 75: Value sales of China’s baby supplementary food retail market, 2012-22
Figure 76: Volume sales of China’s baby supplementary food retail market, 2012-22
APPENDIX – METHODOLOGY, DEFINITION, AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations

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