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Baby Food and Drink - UK - March 2019

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Value and volume sales decline in 2018
Figure 1: Forecast of UK value sales of baby food, drink and milk, 2013-23
Milk continues to dominate market, wet and dry food sales fall
Figure 2: Retail value sales of baby food, drink and milk, by segment, 2016-18
Fall in birth rate accelerates, age of mothers climbs
Government publishes new guidance on feeding babies
Companies and brands
Aptamil leads in milk, despite decline in sales
Ella’s Kitchen sees sales slow in baby food, own-label leaping ahead
Figure 3: Leading brands’ shares in the UK wet and dry baby food market, by value, 2018*
Kiddylicious and Ella’s Kitchen chase Organix in finger foods and snacks market
Own-label launch activity picks up in 2018
Snacks are a key focus of NPD
NPD taps into on-trend flavours and superfoods and grains
Adspend bounces back in 2018
The consumer
Homemade food remains the most popular
Figure 4: Usage of baby food and drink, by type, December 2018
Sugar is the top factor considered by parents when buying food and snacks
Figure 5: Factors influencing choice of baby food and snacks, December 2018
Added benefits is the most popular factor when buying baby milk
Figure 6: Factors influencing choice of baby/toddler milk, December 2018
Parents want elements of control
Figure 7: Attitudes towards baby food and drink, December 2018
Homemade food scores well on being healthy, tasty and inexpensive
Figure 8: Correspondence Analysis, December 2018
What we think
ISSUES AND INSIGHTS
Parents are concerned about the environmental impact of packaging
The facts
The implications
Strong interest from parents in guidance on calories
The facts
The implications
Calls for greater choice at foodservice venues
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Value and volume sales decline in 2018
Rising growth will fuel value growth ahead, with volumes falling
Milk continues to dominate market, wet and dry food sales fall
Fall in birth rate accelerates, age of mothers climbs
Government publishes new guidance on feeding babies
MARKET SIZE AND FORECAST
Value sales decline in 2018
Further decline in volumes in 2018
Figure 9: UK retail sales of baby food, drink and milk, by value and volume, 2013-23
The future
Price rises will fuel value growth
Decline in birth rate will dampen volumes
Popularity of homemade baby food dents demand
Figure 10: Forecast of UK value sales of baby food, drink and milk, 2013-23
Forecast methodology
MARKET SEGMENTATION
Milk continues to dominate market, despite fall in sales
Figure 11: Retail value and volume sales of baby food, drink and milk, by segment, 2016-18
Food suffers worst decline
Finger foods buck market trend seeing sales rise
Drinks see ongoing decline
MARKET DRIVERS
Fall in birth rate accelerates
Figure 12: Live births in England and Wales, 2013-17
Figure 13: Live births in England and Wales, by area of residence of mother, 2017
Decline in 0-4s could adversely impact the market
Figure 14: Change in age structure of the UK population, 2013-18 and 2018-23
Breastfeeding rates fall
Government publishes new guidance on feeding babies
Real incomes are rising
Figure 15: Annual percentage change in CPI and AWE (regular pay), by month, January 2012-November 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Aptamil leads in milk, despite decline in sales
Ella’s Kitchen sees sales slow in baby food, own-label leaping ahead
Kiddylicious and Ella’s Kitchen chase Organix in finger foods and snacks market
Own-label launch activity picks up in 2018
Snacks are a key focus of NPD
NPD taps into on-trend flavours and superfoods and grains
Adspend bounces back in 2018
MARKET SHARE
Aptamil leads in milk, despite decline in sales
Hipp and Alpro grow sales
Own-label options could grow
Figure 16: Leading brands’ sales and shares in the UK baby milk market, by value and volume, 2015/16-2017/18
Ella’s Kitchen sees sales slow year-on-year in baby food
Heinz and Hipp struggle
Little Dish and Annabel Karmel perform well
Own-label sees impressive growth
Figure 17: Leading brands’ sales and shares in the UK wet and dry baby food market, by value and volume, 2015/16-2017/18
Kiddylicious and Ella’s Kitchen chase Organix in finger foods and snacks market
Figure 18: Leading brands’ sales and shares in the UK baby finger foods and snacks market, by value and volume, 2015/16-2017/18
Heinz remains the leading brand in the suffering baby drinks market
Figure 19: Leading brands’ sales and shares in the UK baby drinks market, by value and volume, 2015/16-2017/18
START-UPS AND DISRUPTORS – CASE STUDY – BELLOTA BABY
Company overview
What is it?
Founded
Company mission statement
Founder’s story
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 20: Bellota Baby, 2019
Media profile
Social media metrics
Figure 21: Social media metrics for Bellota Baby as of February 2019
The brand’s view
Revenue in the last year (as of 1st December 2018)
Sources of funding and support
Target audience
What consumer needs does the range meet?
Product stockists
Looking to the future
START-UPS AND DISRUPTORS – CASE STUDY – LITTLE TUMMY 
Company overview
What is it?
Founded
Company mission statement
Founders’ story
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 22: Little Tummy, February 2019
Media profile
Social media metrics
Figure 23: Social media metrics for Little Tummy as of February 2019
The brand’s view
Sources of funding and support
Target audience
What consumer needs does the range meet?
Product stockists
Looking to the future
START-UPS AND DISRUPTORS CASE STUDY – RATATOUIE
Company overview
What is it?
Founded
Company mission statement
Founders story
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Media profile
Social media metrics
Figure 24: Social media metrics for Ratatouie as of March 2019
The brand’s view
Sources of funding and support
Target audience
What consumer needs does the range meet?
Product stockists
Looking to the future
LAUNCH ACTIVITY AND INNOVATION
2018 sees a rise in launch activity, with savoury meals leading the way
Heinz launches tubs
Figure 25: Heinz moves into cartons within meals, 2018
Little Bistro extends range
Figure 26: Little Bistro expands range, 2018
Hipp launches new brand positioning
Figure 27: Hipp repackages pouches, 2018
Cow & Gate launches microwaveable meals to be eaten straight from the bowl
Danone leads NPD with milk ranges
Figure 28: Share of new product launches within the UK baby food, drink and milk market, by company, 2014-18
Figure 29: Aptamil unveils new look packaging in 2018
Arla brings organic formula milk brand Baby & Me to the UK
Global milk brands reference lack of palm oil as an ingredient
Figure 30: Global baby milk brands reference absence of palm oil as an ingredient, 2018-19
Ella’s enters frozen category targeting big kids
Figure 31: Ella’s Kitchen targets older children with Big Kids launch, 2018
Kiddylicious launches RTE porridge range
Figure 32: Kiddylicious introduces RTE porridge, 2018
Figure 33: Perception map of attribute performance of Kiddylicious Oaty Porridge with Blueberries in comparison to baby cereals among UK consumers, January 2017-Februiary 2019
Snacks are a key focus of NPD
Kiddylicious looks to on-trend ingredients
Figure 34: Kiddylicious looks to on-trend ingredients in snacking, 2018
Organix explores new pack sizes
Figure 35: Organix unveils NPD, 2018
Organix launches first ambient dairy snack
Piccolo launches Mighty Squeeze snacks in pouches …
Figure 36: Piccolo launches Mighty Squeeze snack range in pouches, 2018
Figure 37: Perception map of attribute performance of Piccolo mighty squeeze snack in comparison to baby fruit pouches, desserts and yogurts among UK consumers, January 2017-Februiary 2019
… and branches into teething
Figure 38: Piccolo launches teething wafers, 2018
Rise in own-label product launches
Figure 39: Share of new product launches within the UK baby food, drink and milk market, by brands vs own-label, 2014-18
Figure 40: Own-label product launches in baby food, 2018
Figure 41: Tesco own-label products sit alongside brands in baby food aisle, Tesco, UK, 2019
Own-label seen to be of similar quality to branded, on average
Figure 42: Perception map of attribute performance of private-label baby food/milk in comparison to branded baby food/milk among UK consumers, January 2017-Februiary 2019
Tapping into on-trend flavours
Figure 43: Sainsbury's Little Big Ones Chicken Katsu Curry with Rice, 2018
Superfoods and grains as ingredients
Little Freddie focuses on provenance …
… and ethics
Figure 44: Little Freddie references use of free-range chicken, 2018
ADVERTISING AND MARKETING ACTIVITY
Adspend bounces back in 2018
Figure 45: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, 2015-18
Figure 46: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, by category, 2015-18
Danone is the leading advertiser
Cow & Gate continues happiness theme
Aptamil focuses on reassurance
Figure 47: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, by advertiser (sorted by 2018), 2015-18
Hipp increases support in 2018 with more planned in 2019
Ella’s Kitchen cuts spend on 2017 …
… but supports its Big Kids range launch
Figure 48: Ella’s Kitchen supports Big Kids range with sponsored posts, 2019
Organix launches ‘Fuel their Wonder’ campaign
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Homemade food remains the most popular
Sugar is the top factor considered by parents when buying food and snacks
Added benefits is the most popular factor when buying baby milk
Parents want elements of control
Calls for greater choice at foodservice venues
Homemade food scores well on being healthy, tasty and inexpensive
Manufactured food leads on convenience
USAGE OF BABY FOOD AND DRINK 
Homemade food remains the most popular
Figure 49: Usage of baby food and drink, by type, December 2018
82% buy any manufactured baby food/drink/milk
Figure 50: Usage of manufactured baby food, drink or milk, by age of child, December 2018
Milk is the product given to babies most frequently
Figure 51: Usage frequency of baby food and drink, by type, December 2018
37% use all types of baby food
Figure 52: Repertoire of usage of baby food and drink, by type, December 2018
FACTORS INFLUENCING CHOICE 
Sugar is the top factor considered by parents when buying food and snacks
Figure 53: Factors influencing choice of baby food and snacks, December 2018
A low price is more important than a promotion
Figure 54: Ella’s Kitchen, Heinz and Cow & Gate use promotions in-store, 2019
Added benefits is the most popular factor when buying baby milk
Figure 55: Factors influencing choice of baby/toddler milk, December 2018
10% look for milk suitable for babies with an intolerance
British origin appeals to 14%
Figure 56: Sainsbury’s references UK production and use of British whole milk, 2018
ATTITUDES TOWARDS BABY FOOD AND DRINK 
Parents want elements of control
Figure 57: Attitudes towards baby food and drink, December 2018
Strong interest from parents in guidance on calories
Calorie labelling and tracking can speak to this interest
Calls for greater choice at foodservice venues
Opportunities for up-ageing through brand extensions
Ella’s Kitchen and Morrisons target older children with ready meals
Rising threat of own-label underlines need for new revenue streams
Multiple in-store locations could drive sales
Environmental impact of packaging worries 49%
Pouches come under the spotlight
Upcycling and recycling programmes explored for solutions
US brands explore recyclable cups
Figure 58: American brands launch cup-style packaging, 2017-18
ASSOCIATIONS WITH BABY FOOD 
Homemade food scores well on being healthy, tasty and inexpensive
Manufactured food leads on convenience
Jars do not score well on environmentally-friendly or cost credentials
Figure 59: Correspondence Analysis, December 2018
Figure 60: Qualities associated with different types of baby food, December 2018
Methodology
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 61: UK value sales of baby food, drink and milk, best- and worst-case forecast, 2018-23
Figure 62: UK volume sales of baby food, drink and milk, best- and worst-case forecast, 2018-23
Figure 63: Forecast of UK volume sales of baby food, drink and milk, 2013-23
APPENDIX – MARKET DRIVERS 
Figure 64: Mean age of mother at childbirth in England and Wales, 2013-17
Figure 65: Live births in England and Wales, by age of mother, 2013-17
Figure 66: Live births to non-UK born mothers, by percentage of total births, 2013-17
APPENDIX – MARKET SHARE 
Figure 67: Leading brand owners’ sales and shares in the UK wet and dry baby food market, by value and volume, 2015/16-2017/18
Figure 68: Leading brand owners’ sales and shares in the UK baby finger food and snacks market, by value and volume, 2015/16-2017/18
Figure 69: Leading brand owners’ sales and shares in the UK baby milk market, by value and volume, 2015/16-2017/18
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 70: Share of new product launches within the UK baby milk market, by company, 2014-18
Figure 71: Share of new product launches within the UK baby food, drink and milk market, by claim category, 2014-18
Figure 72: Share of new product launches within the UK baby food, drink and milk market, by package type, 2014-18
APPENDIX – ADVERTISING AND MARKETING ACTIVITY
Figure 73: Total above-the line, online display and direct mail advertising expenditure on baby food and drink, by category, by brand (sorted by 2018), 2015-18

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