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The Baby Food Market in Canada 2017

The Baby Food Market in Canada 2017

Summary

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.

Specifically, this report provides the following -

  • Consumption data based upon a unique combination of industry research, fieldwork, market sizing work and our in-house expertise to offer extensive data about the trends and dynamics affecting the industry.
  • Detailed profile of the companies operating and new companies considering entry in the industry along with their key focus product sectors.
  • Market profile of the various product sectors with the key features & developments, segmentation, per capita trends and the various manufacturers & brands.
  • Overview of baby food retailing with a mention of the major retailers in the country along with the distribution channel.
  • Future projections considering various trends which are likely to affect the industry.
Companies mentioned in this report: Mead Johnson Nutrition Company, Abbott Nutrition, Nestlé Canada Inc., Heinz Canada, Danone, Baby Gourmet, Love Child Organics.

Scope
  • The market for baby food stood at tons in 2016, representing a 4.2% decrease over 2010 adversely affected by the rise in the proportion of mothers breastfeeding and the duration of breastfeeding.
  • 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%).
  • At present, Canada does not produce infant formula, but several companies have plans to begin local manufacturing.
  • A high proportion of volume (90%) and value (96%) consisted of cereals and milks, imported predominantly from the US in 2016.
  • Grocers have increased their share of baby food sales in recent years, while the proportion sold via drugstores and pharmacies has declined sharply.
  • GlobalData estimates that the market will begin to expand again, and will increase by 5.3% in volume between 2016 and 2022.
Reasons to buy
  • Evaluate important changes in consumer behavior and identify profitable markets and areas for product innovation.
  • Analyse current and forecast behavior trends in each category to identify the best opportunities to exploit.
  • Detailed understanding of consumption by individual product categories in order to align your sales and marketing efforts with the latest trends in the market.
  • Investigates which categories are performing the best and how this is changing market dynamics.


  • Introduction
    • Executive Summary
    • Definitions: Market Sectors
    • Definitions: Terminology
  • Background to the Market
    • Births — Live Birth Rates: The number of births has been rising over the last decade, to reach 395,100 babies in 2016
      • Table Live Births & Population Trends, 2006–2016
    • Births — Live Births by Region: Two provinces, Quebec and Ontario, account for the majority of births, 59.4% in 2016
      • Table Live Births by Province, 2012–2016
    • The Consumer: The vast majority of Canadian families can afford commercially prepared baby food and they are increasingly opting for ethical products
    • The Consumer: Young parents are also extremely concerned about health, but also appreciate products that are convenient and time-saving
      • Table Age at which Allergens are Introduced to Babies' Diets
    • Socio-demographic Trends — Family Structure: Married couples remained the predominant family structure in 2011 but their share has decreased over time
      • Table Family Structure, 2001–2011
    • Socio-demographic Trends — Births by Age of Mother: The majority of births occur to mothers aged between 25 and 34, accounting for 64% of births in 2013
      • Table Breakdown of Live Births by Age of Mothers, 2011 & 2013
    • Working Women — Female Employment: Over four-fifths of women in the 25-44 year age group are in paid employment
      • Table Working Women, 2010–2016
    • Working Women — Legislation: The government has announced changes to parental leave as part of the March 2017 Federal Budget
    • Regulations: Although Canada has signed the WHO code regulations on infant formula, promotion and free distribution of infant formula remains widespread
    • Breastfeeding Trends — Promotion: The Breastfeeding Committee for Canada is made up of a large number of public health bodies throughout the country
    • Breastfeeding Trends — Prevalence: Breastfeeding rates have been rising, but exclusive breastfeeding rates at six months stood at just 26% in 2011/12
      • Table Exclusive Breastfeeding Rates, 2003 and 2011/12
    • Breastfeeding Trends — Prevalence: Quebec had Canada's first provincial-level breastfeeding policy
      • Table Breastfeeding Rates in Quebec by Age of Baby, 2005/06
    • Breastfeeding Trends — Prevalence: Data for 2012 indicated that for the first time, breastfeeding initiation broke the 90% mark
      • Table Breastfeeding Initiation Trends, by Age & Province, 2008–2013
  • Market Overview
    • Market Overview: In 2016, the Canadian baby food market was worth C$506 million (US$381 million), having increased by 12.9% between 2010 and 2016
    • Market Overview: Overall consumption of baby food fell by 4.2% between 2010 and 2016 to stand at 27,902 tons in 2016
      • Table Market Size, 2016, &Growth Rates, 2010–2016
    • Manufacturer Shares: The Canadian market has become significantly less concentrated over the past three years
      • Table Baby Food: Trends in Manufacturer Shares, 2010–2016
    • Manufacturer Shares: The market is led by two milks specialists — Mead Johnson and Abbott — while Nestlé and Heinz have a broader presence
      • Table Baby Food: Manufacturer Shares by Sector, % Value & Volume, 2016
    • The Future: Boosted by an increasing number of births and rising GDP, the market is expected to see 34% value growth
      • Table Projected Market Size, 2022, &Growth Rates, 2016–2022
  • Sector Analysis
    • Sector Analysis: Baby Milks
    • Baby Milks Sector Trends: Since 2010 consumption has declined gradually, although 2016 saw a slight increase, due to higher birth numbers and an improved economy
    • Baby Milks Per Capita Trends: Although growth in consumption by older babies has partially offset the rising rate of breastfeeding per capita consumption has fallen
    • Baby Milks Segmentation: The increase in breastfeeding has led to a decline in the share of sales accounted for by first-stage milks, but these continue to dominate
    • Baby Milks Segmentation: The latest development is the appearance of non-GMO formulas
    • Baby Milks Segmentation: Premium powdered infant formula products retail at over US$32 per kg
      • Table Powdered Baby Milks: Brand Price Positioning Analysis, 2017
    • Baby Milks Segmentation: Mid-price formula costs US22-US$32 per kg, while the cheapest products in the low-priced sector are own labels costing less than US$13 per kg
      • Table Powdered Baby Milks: Brand Price Positioning Analysis, 2017
    • Baby Milks Segmentation: There is a wide variation in the prices of liquid and concentrated infant formulae
      • Table Liquid & Concentrated Baby Milks: Brand Price Positioning Analysis, 2017
    • Baby Milks Segmentation: There is a wide variation in the types of pack used for infant formula, with manufacturers using this as a means to differentiate their products
    • Baby Milks Manufacturer Shares: Mead Johnson now leads from its closest rival, Abbott, by five percentage points; Abbott is now 12 percentage points ahead of Nestlé
      • Table Baby Milks: Manufacturer Shares by % Value & Volume, Trends, 2010–2016
    • Baby Milks Brands: The Enfa range from Mead Johnson leads, followed by Abbott's Similac and the Good Start brand from Nestlé
    • Sector Analysis: Baby Cereals
    • Baby Cereals Sector Trends: Sales of cereals & finger foods have been boosted by the development of organic and fortified products and innovation in the snacks segment
    • Baby Cereals Per Capita Trends: In 2015, per capita consumption of cereals & snacks amounted to 7.64kg, representing a 2.2% increase on the 2010 level
    • Baby Cereals Segmentation: Biscuits and snacks were estimated to account for over a quarter of sector value in 2016
      • Table Cereals & Dry Meals: Price Positioning, 2016
    • Baby Cereals Segmentation: Biscuits, rusks, and cereal bars are the lowest priced finger foods, while more modern snacks can command prices of over US$100 per kilogram
      • Table Finger Foods: Price Positioning, 2017
    • Baby Cereals Manufacturers: Heinz has faced growing competition in recent years from Nestlé, which has now drawn almost level with it
      • Table Baby Cereals: Manufacturer Shares by Value & Volume, Trends, 2010–2016
    • Baby Cereals Brands: Heinz leads with its eponymous brand in the cereals segment, while its Farley's brand is the leader in finger foods
    • Sector Analysis: Baby Wet Meals
    • Baby Wet Meals Sector Trends: Consumption was in decline until 2015, but in 2016, attractive ranges — particularly in the pouches segment — stimulated sales
    • Baby Wet Meals Per Capita Trends: In 2016, per capita consumption of wet meals stood at 33.8kg, a fall of 10% over 2010
    • Baby Wet Meals Segmentation: Organic products now account for approaching 50% of value sales of baby food
    • Baby Wet Meals Segmentation: The price of pouches is significantly above that of meals in jars
      • Table Wet Meals: Price Positioning, 2017
    • Baby Wet Meals Segmentation: Pouches have been gaining ground at the expense of jars, while plastic tubs and tray meals also feature
    • Baby Wet Meals Manufacturer Shares: Heinz continues to lead, but has lost considerable ground to organic companies
      • Table Baby Meals: Market Shares by Value & Volume, Trends, 2010–2016
    • Baby Wet Meals Brands: Heinz currently offers by far the most extensive range of jarred meals as well as products in tubs and pouches
    • Sector Analysis: Baby Drinks
    • Baby Drinks Sector Trends: Sales of drinks and juices slumped to just C$3.5 million in 2016
    • Baby Drinks Per Capita Trends: Use of baby drinks is not widespread, with per capita consumption falling to just 1.4 liters in 2016
    • Baby Drinks Manufacturers & Brands: The withdrawal of most of its competitors has enabled Heinz to corner 95% of the market
      • Table Baby Drinks/Juices: Manufacturer Shares, % Value & Volume, Trends 2010–2016
  • Production and Trade
    • Production: There is currently very limited domestic production of baby food in Canada
    • Imports: A high proportion of volume (90%) and an even higher proportion of value (96%) consisted of cereals and milks, imported predominantly from the US in 2016
    • Exports: Exports plummeted in 2012, and despite a small rally in 2014, have remained at a low level
  • Company Profiles
    • Company Profiles: Increased competition in the non-milks sectors has seen Heinz and Nestlé cede the top spots to milks specialists Mead Johnson and Abbott
    • Company Profiles: Mead Johnson Nutrition Company
    • Company Profiles: Abbott Nutrition
    • Company Profiles: Nestlé Canada Inc.
    • Company Profiles: Heinz Canada
    • Company Profiles: Other Manufacturers
  • Distribution
    • Retail Structure: Large-scale grocery outlets have been taking share of packaged food sales from convenience stores & gas stations
      • Table Packaged Food Sales by Channel, C$ Billion, 2010–2016
    • Baby Food Retailing: Grocers have increased their share of baby food sales in recent years, while the proportion sold via drugstores and pharmacies has declined sharply
  • Economic Background
    • Political and Economic Background: Consumer spending has been relatively buoyant in recent months, with consumers benefiting from low interest rates and cheap fuel
      • Table Economic Indicators, 2010–2017
    • Key Macro-economic Forecasts: An improvement in GDP growth to 1.4% was seen in 2016, and 2017 is forecast to see an increase of 2.4%, based on a strengthening of exports
      • Table Key Macroeconomic Forecasts, 2016–2022
  • Prospects and Forecasts
    • Birth and Population Projections: Statistics Canada expects the increases in the number of live births to continue, although at a steadily declining rate
      • Table Birth & Population Projections, 2006–2022
    • Forecast Overview: Sales will be boosted by the rise in the number of babies and growing demand for premium products
    • Future Trends: GlobalData forecasts that the baby food market will expand by an overall 33.8% in value between 2016 and 2022
  • Appendix
    • Appendix — The Baby Population: The number of babies aged 0–3 has risen steadily and is forecast to reach 1.2 million by 2022
      • Table Baby Population, Number of Babies, '000, 2006 –2022
    • Appendix — Market Value: Sales of baby food have risen every year to reach C$506 million in 2016, 13% higher than in 2010
      • Table Baby Food: Market Value, Current Prices, 2010–2016
    • Appendix — Market Value: In real terms, sales have risen only marginally
      • Table Baby Food: Market Value, Constant Prices, 2010–2016
    • Appendix — Market Value: The baby food market was valued at US$380.6 million in 2016, with milks accounting for 63.5% of this
      • Table Baby Food: Market Value, US$ Million, 2010–2016
    • Appendix — Market Volume: Consumption picked up slightly in 2016 after a gradual decline up to 2015
      • Table Baby Food: Market Volume, Tons, 2010–2016
    • Appendix — Per Capita Expenditure: Per capita expenditure rose by 7.8% between 2010 and 2016 to C$1,281
      • Table Baby Food: Per Capita Expenditure, Current Prices, 2010–2016
    • Appendix — Per Capita Expenditure: Slight increases have been recorded in real terms in all sectors except drinks
      • Table Baby Food: Per Capita Expenditure, Constant Prices, 2010–2016
    • Appendix — Per Capita Expenditure: Expenditure per baby born in 2016 stood at US$963
      • Table Baby Food: Per Capita Expenditure, US$ Dollars Prices, 2010–2016
    • Appendix — Per Capita Consumption: Per capita consumption has fallen by 8.5% since 2010 and stood at 70.6kg in 2016
      • Table Baby Food: Per Capita Consumption, Grams, 2010–2016
    • Appendix — Milks: There has been a gradual decline in the consumption of milks, as rising breastfeeding rates have counteracted increases in the number of births
      • Table Baby Milks: Sector Trends, 2010–2016
    • Appendix — Milks: The follow-on/growing-up milks segments are underdeveloped, but are steadily taking share from the dominant first-stage segment
      • Table Baby Milks: Market Segmentation, Value and Volume, 2010–2016
    • Appendix — Milks: Market leaders Mead Johnson and Abbott primarily market their products in the mid- and premium price segments
      • Table Baby Milks – Powdered Infant Formula, Brand Price Analysis, 2017
    • Appendix — Milks: Nestlé's products are mid-to-premium priced, while own labels occupy the low-priced segment
      • Table Baby Milks – Powdered Infant Formula, Brand Price Analysis, 2017
    • Appendix — Milks: In the liquid milks segment, own labels retail at half the price of branded goods
      • Table Baby Milks – Liquid Infant Formula, Brand Price Analysis, 2017
    • Appendix — Cereals: The cereals sector has performed well, with sales buoyed up by growth in snacks sales
      • Table Baby Cereals: Sector Trends, 2010–2016
    • Appendix — Wet Meals: After falling by over 5% between 2010 and 2013, consumption has since picked up as pouches have made their mark
      • Table Wet Meals : Sector Trends, 2010–2016
    • Appendix — Drinks: Consumption of drinks is declining, and had dropped by 20% between 2010 and 2016
      • Table Drinks : Sector Trends, 2010–2016
    • Appendix — Imports: Import value has risen by 56%, while in volume terms imports have stagnated at 25,000 tons per annum
      • Table Imports of Baby Food by Sector, Value, US$ `000, 2010–2016
      • Table Imports of Baby Food by Sector, Volume, Tons, 2010–2016
    • Appendix — Imports: Milks account for the majority of imports, accounting for 96% of the total in 2016
      • Table Imports of Baby Food by Country of Origin, Value, 2014–2016
    • Appendix — Imports: The vast majority of imports originate across the border in the US
      • Table Imports of Baby Food by Country of Origin, Volume, 2014–2016
    • Appendix — Exports: Exports are low and have shrunk significantly in recent years
      • Table Exports of Baby Food by Sector, Value, US$ '000, 2010–2016
      • Table Exports of Baby Food by Sector, Volume, Tons, 2010–2016
    • Appendix — Exports: Most exports comprise milks & cereals and vegetable meals
      • Table Exports of Baby Food by Country of Destination, Value, 2014–2016
    • Appendix — Exports: Exports are mostly destined for countries in Latin America and the Caribbean, as well as further afield to Southeast Asia
      • Table Exports of Baby Food by Country of Destination, Volume, 2014–2016
    • Appendix — Value Forecasts: The market is forecast to expand to C$677 million by 2022
      • Table Baby Food: Market Value Forecasts, Current Prices, 2016–2022
    • Appendix — Value Forecasts: In real terms, the market is forecast to increase by almost 20%, although sales of drinks will halve
      • Table Baby Food: Market Value Forecasts, Constant Prices, 2016–2022
    • Appendix — Value Forecasts: Between 2016 and 2022, the baby food market is expected to increase by almost 34%
      • Table Baby Food: Market Value Forecasts, US$ Million, 2016–2022
    • Appendix — Volume Forecasts: Consumption will increase by 5% to 29,378 tons by 2022, with growth in all sectors except drinks
      • Table Baby Food: Market Volume Forecasts, Tons, 2016–2022
    • Appendix — Per Capita Forecasts: Per capita expenditure will rise to C$1,647 by 2022
      • Table Baby Food: Per Capita Expenditure, Current Prices, 2016–2022
    • Appendix — Per Capita Forecasts: In real terms, per capita spending will rise by 15% by 2022
      • Table Baby Food: Per Capita Expenditure, Constant Prices, 2016–2022
    • Appendix — Per Capita Forecasts: Per capita expenditure will rise by 28.5%, with the strongest gains expected in milks and cereals/finger foods
      • Table Baby Food: Per Capita Expenditure, US$ Dollars, 2016–2022
    • Appendix — Per Capita Forecasts: There will be a marginal increase in per capita consumption, to 71.4 kg in 2022
      • Table Baby Food: Per Capita Consumption, Grams, 2016–2022
    • Summary Methodology

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