The Baby Food Market in Canada 2017
Despite the growth in the number of live births, expansion in the milks sector, which accounts for the bulk of retail sales, has been held back by the increase in breastfeeding rates. Sales in other sectors have been negatively affected by challenges to the popularity of baby meals, due to adverse publicity, a move towards home preparation of meals and, for some of the period, a more difficult economy. The market increased by just 13% in value to C$506 Million (US$381 Million) in 2016, while sales in volume terms declined by 4% to 27,902 tons.
Baby milks account for 63.5% of value sales of baby food, well ahead of wet meals (24.5%) and cereals & finger foods (11.3%). Milks have seen their share of sales decline since 2010, mainly as a result of rapid rises in the price of wet meals following the introduction of pouches from 2011/12 onwards. In volume terms, meals account for 48%, compared with milks on 39%. Cereals & finger foods have outperformed the market in both volume and value terms, due to the growing availability and popularity of a widening range of finger foods. Sales of drinks are low and have fallen back significantly.
At present, Canada does not produce infant formula, but several companies have plans to begin local manufacture. A few small players produce other baby food. Imports of baby food have been fluctuating between 23,000 and 28,000 tons per year. In 2016, 90% of volume and 96% of value consisted of cereals and milks, imported predominantly from the US. Exports plummeted in 2012 and, despite a small rally in 2014, have remained at a low level. In 2016, just 2,137 tons, worth US$5.8 Million, were exported. Cereals and milks accounted for 61% of value exports, destined mainly for Mexico and China.
By 2022, the market is forecast to achieve sales of C$677 Million, an increase of 34% compared with 2016, helped by a gradually increasing number of births and a relatively good economy. Value growth will be highest in cereals & finger foods (+43%), due to the continuing growth in finger foods. Milks value should be boosted by the trend towards premium products, resulting in a 35% increase. Wet meals will benefit from the higher popularity of pouches and regular innovation in product flavors and types. Volume growth is likely to be restricted to 5%, bringing total consumption to 29,378 tons.
Mead Johnson now leads the total market, based on its expanding share of the milks sector. In 2016, it had a share of 24% in value, three percentage points ahead of its nearest rival, Abbott, which held 21%. Nestlé has seen its share of milks and wet meals fall significantly, although its share of cereals has held up. As a result, it now lies in third place. Heinz has also come under increasing pressure in the wet meals sector, due to the growing popularity of products from newer entrants, including Baby Gourmet and Love Child Organics. Own label products have also made a growing impact.
The report The Baby Food Market in Canada 2017 provides extensive and highly detailed current and future market trends in Canadian market.
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