Baby Food in the US
For a number of years, the US fertility rate has seen a consistent overall downwards trajectory, recently reaching an unprecedented low rate, according to the Centers for Disease Control. The CDC’s most recent study on births nationally, which analyses 2016 figures, notes that the US general fertility rate declined to 62 births per 1,000 women aged 15-44 in 2016; a figure which was down 1% from 2015, and down 11% from 2007. Whilst the US population has continued to grow at a steady pace annually, two significant factors nonetheless combined to help suppress the birth rate to historic lows: declining rates of teen pregnancy and delayed marriage and motherhood. The CDC’s report attributes much of the decline in the birth rate to these factors. The report points out that the birth rate for teenagers between the ages of 15 and 19 declined by 9% in 2016 to 20.3 births per 1,000 women; a drastic decline of 51% since 2007.
Accounting for a combined 55% share of value sales in baby food in the US in 2017, Abbott Laboratories and Mead Johnson Nutrition continued to lead baby food, maintaining their grip on the top two spots, which these companies have consistently held for many years. With a portfolio that includes well-known brands Similac, PediaSure, Alimentum and Isomil, Abbott witnessed current value growth of 2% in 2017, helping the company to grow its leading share of baby food from 29% in 2016 to 30% in 2017. Mead Johnson Nutrition, the owner of Enfamil and Enfagrow, posted current value growth of 1% in 2017, and the company held onto its second place within baby food with a value share of 25%. The primary brands from both of these companies, Abbott’s Similac and Mead Johnson’s Enfamil, remained the top two baby food brands, with strong competition between the two. Similac held onto the top spot it regained in 2016, seeing 3% value growth in 2017 to achieve a 22% value share, whilst Enfamil, just behind, held onto a 21% value share.
Over the forecast period, baby food is projected to continue to face challenges and obstacles to growth, with many companies struggling to achieve significant sales gains and largely experiencing continued stagnant or declining growth for their brands. The category is projected to record a negligible value CAGR at constant 2017 prices over the forecast period, in line with the review period performance. Sales of USD7.1 billion are expected in 2022; a marginal improvement over the value sales of USD7.0 billion in 2017. Volume sales are expected to continue declining. As is currently the case, where future growth does occur, it is likely to stem primarily from premium speciality products, whose higher price points will create value growth opportunities despite volume challenges. Including comparatively more expensive products such as baby rusks and teething biscuits, other baby food is expected to embody this dynamic, with a projected value CAGR of 3% over the forecast period at constant 2017 prices.
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