Baby Food and Drink - US - October 2006

SCOPE AND THEMES
Definition
EXECUTIVE SUMMARY
Bottom line
Sales are down in a $3.5 billion (FDM channel) market
Toddler foods performing well
“All natural” strikes a chord among moms
Grocery sales sliding and Wal-Mart sales estimated to be $1.25 billion
Mixed segment by segment sales performance in FDM channels
Market led by pharmaceutical suppliers
Still, a lot of room for toddler foods to grow
Most babies have formula at some time
The future of the baby food and drink market
MARKET DRIVERS
Baby food and drink sales confined by number of users
Figure 1: Number of children three and under in the U.S., 2001, 2006 and 2011
Innovation targeting toddlers attempting to retain consumers
Figure 2: Reasons to use toddler foods, July 2006
Interest in organic and all natural products
Figure 3: Numbers of new product launches with natural and organic positioning, 2004 and 2005
Figure 4: Cost comparison of organic & conventional baby foods reviewed, September 2006
Figure 5: Attributes deemed “very important” when choosing food/drinks for child under 3, July 2006
Breastfeeding trends
Growing number of Hispanic children and marketing to their parents
Figure 6: Hispanic origin, of any race, both sexes, 2001-11
MARKET SIZE AND TRENDS
 MARKET SIZE
FDM
Figure 7: U.S. retail FDM sales of baby food and drink, at current and constant prices, 2001-06
Natural food stores
Figure 8: U.S. retail sales of baby food and drink in natural food stores, at current and constant prices, 2003-06*
Wal-Mart estimate
 MARKET TRENDS
Figure 9: New product releases of baby food and drink, 2000-06
MARKET SEGMENTATION
Introduction
FDM sales of baby food and drink
Figure 10: FDM sales of baby food and drink, segmented by type of product, 2004 and 2006
Baby formula
Figure 11: FDM sales of baby formula, at current and constant prices, 2001-06
Powder baby formula
Figure 12: FDM sales of powder baby formula, at current and constant prices, 2001-06
Liquid concentrate baby formula
Figure 13: FDM sales of liquid concentrate baby formula, at current and constant prices, 2001-06
RTD baby formula
Figure 14: FDM sales of RTD baby formula, at current and constant prices, 2001-06
Baby food/snacks
Figure 15: FDM sales of baby food/snacks, at current and constant prices, 2001-06
Baby electrolytes
Figure 16: FDM sales of baby electrolytes, at current and constant prices, 2001-06
Baby juice
Figure 17: FDM sales of baby juice, at current and constant prices, 2001-06
SUPPLY STRUCTURE
 COMPANIES AND BRAND SALES
Overview
Figure 18: Manufacturer FDM sales of baby food and drink in the U.S., 2004 and 2006*
Powdered baby formula brand sales
Figure 19: Manufacturer FDM brand sales of powder baby formula in the U.S., 2004 and 2006*
Liquid concentrate brand sales
Figure 20: Manufacturer FDM brand sales of liquid concentrate baby formula in the U.S., 2004 and 2006*
RTD baby formula brand sales
Figure 21: Manufacturer FDM brand sales of RTD baby formula in the U.S., 2004 and 2006*
Baby food/snack brand sales
Figure 22: Manufacturer FDM brand sales of baby food/snacks in the U.S., 2004 and 2006*
Baby electrolyte brand sales
Figure 23: Manufacturer FDM brand sales of baby electrolytes in the U.S., 2004 and 2006*
Baby juice brand sales
Figure 24: Manufacturer FDM brand sales of baby juice in the U.S., 2004 and 2006*
 MAJOR MANUFACTURER PROFILES
Mead Johnson Nutrition (Bristol-Myers Squibb)
Ross Products Division (Abbott Laboratories)
Gerber Products Co. (Novartis)
Nestlé USA
ADVERTISING AND PROMOTION
Introduction
Mead Johnson Nutrition
Ross Labs
Gerber Products
Figure 25: Ad for Gerber, 300 millionth American, 2006
Figure 26: Ad for Gerber, “No one babies their food like Gerber,” 2006
Figure 27: Ad for Gerber, “Do you know where your baby food is from?” 2006
Nestlé USA
Figure 28: Ad for Nestlé Good Start, Holiday time, 2006
Figure 29: Ad for Nestlé Good Start, Mother’s Day, 2006
RETAIL DISTRIBUTION
Overview
Figure 30: U.S. FDM sales of baby food and drink, by channel, 2004 and 2006*
Supermarkets
Figure 31: U.S. supermarket sales of baby food and drink, at current and constant prices, 2001-06
Mass merchandisers
Figure 32: U.S. mass merchandiser sales of baby food and drink, at current and constant prices, 2001-06
Drug stores
Figure 33: U.S. drug store sales of baby food and drink, at current and constant prices, 2001-06
THE CONSUMER
Introduction
Summary
Household penetration of baby food and drink
Figure 34: Incidence of baby food and drink usage in baby and toddler households, January 2005-September 2005
Household penetration by brand
Figure 35: Brands of baby food and drink used, January-September 2005
Figure 36: Brands of baby food and drink used, by age of children in HH, January-September 2005
Feeding habits—breastfeeding versus formula
Figure 37: Feeding habits, breastmilk and/or formula, July 2006
Figure 38: Feeding habits, breastmilk and/or formula, by household income, July 2006
Figure 39: Feeding habits, breastmilk and/or formula, by employment, July 2006
Moms name their most influential sources for information on feeding
Figure 40: Sources of information about baby nutrition, July 2006
Figure 41: Sources of information about baby nutrition, by age, July 2006
Figure 42: Sources of information about baby nutrition, by employment, July 2006
Mom’s personal nutrition habits during pregnancy and breastfeeding
Figure 43: Mom’s personal nutrition habits while pregnant or nursing, July 2006
Figure 44: Mom’s personal nutrition habits while pregnant or nursing, by employment, July 2006
Toddler nutrition
Types of foods toddlers are fed
Figure 45: How toddlers are/will be fed, “toddler foods” and/or “adult foods,” July 2006
Figure 46: How toddlers are/will be fed, “toddler foods” and/or “adult foods,” by age, July 2006
Why moms buy toddler foods
Figure 47: Reasons toddler foods are used, July 2006
Attributes moms value in nutrition for their children
Figure 48: Attributes moms believe are important for toddler nutrition, July 2006
Figure 49: Attributes moms believe are important for toddler nutrition, by age of mom, July 2006
Figure 50: Important attributes of toddler nutrition, by employment, July 2006
Brand by brand analysis of baby market brands
Figure 51: Relationship between brands of baby formula, diapers and baby bath product, and brand of baby food used, January-September 2005
FUTURE AND FORECAST
 FUTURE TRENDS
Lack of growth in number of women in “prime” childbearing years
Figure 52: U.S. female population projections, by age, 2001-11
Market players to keep a close eye on organic baby food opportunity
Marketing to grandparents
Figure 53: Who looks after kids when parents are away, September 2005
Trend to address obesity epidemic earlier
 MARKET FORECAST
Baby food and drink
Figure 54: Forecast of U.S. FDM sales of baby food and drink, at current and constant prices, 2006-11
Baby formula
Figure 55: Forecast of U.S. FDM sales of baby formula, at current and constant prices, 2006-11
Powder baby formula
Figure 56: Forecast of U.S. FDM sales of powder baby formula, at current and constant prices, 2006-11
Liquid concentrate baby formula
Figure 57: Forecast of U.S. FDM sales of liquid concentrate baby formula, at current and constant prices, 2006-11
RTD baby formula
Figure 58: Forecast of U.S. FDM sales of RTD baby formula, at current and constant prices, 2006-11
Baby food and snacks
Figure 59: Forecast of U.S. FDM sales of baby food and snacks, at current and constant prices, 2006-11
Baby electrolytes
Figure 60: Forecast of U.S. FDM sales of baby electrolytes, at current and constant prices, 2006-11
Baby juice
Figure 61: Forecast of U.S. FDM sales of baby juice, at current and constant prices, 2006-11
Forecast factors
APPENDIX: TRADE ASSOCIATIONS
APPENDIX: NEW PRODUCT BRIEFS
Gerber: Gerber Graduates Peach Puffs
Giant Eagle: Giant Eagle Nature’s Basket Organic Applesauce
Gerber: Graduates For Toddlers Lil’ Entrees
Ross Products: Similac Organic Infant Formula
Ross Products: Similac Advance Infant Formula Singles Powder Packets
Mead Johnson Nutritionals: Enfamil with Iron