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The Baby Food Market in Hong Kong, 2017

The Baby Food Market in Hong Kong, 2017

Summary

“The Baby Food Market in Hong Kong, 2017” is an analytical report by GlobalData which provides extensive and highly detailed current and future market trends in the Hong Kong market.

Hong Kong stands out as an extremely well developed baby food market. Total sales of baby food were 60% higher in 2016 than in 2010 in terms of volume. In value terms, sales more than doubled over the same period. Total sales in Hong Kong still include a large proportion of sales destined for mainland China. The domestic market has shown much slower growth than the overall market, with volume sales rising by only 16.5%, although retail value has increased by 62%, or 28% at constant 2010 prices. The lower growth is attributable to the fact that the milks sector in the domestic market is approaching saturation level. Hong Kong is primarily a trading center. It has virtually no natural resources and is therefore dependent on imports of raw materials, food, and fuel. The economy is generally strong, built on a sound banking system, the strength of its stock exchange. The country performed well up to 2015. However, 2016 saw slower annual growth, estimated at 1.6%, as trade in goods and services has declined.

What else does this report offer?

  • 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.
Scope
  • Hong Kong's Baby food market is unique in that it is distorted by a huge parallel trade in infant formula with China, which is roughly twice the size of domestic consumption in Hong Kong itself. Total sales of baby food were 60% higher in 2016 than in 2010 in terms of volume.
  • Milks are by far the most important sector in the Hong Kong baby food market, accounting for 96.3% of overall value in 2016 and 93.4% of volume.
  • Four multinationals — Mead Johnson, Nestlé, Abbott, and FrieslandCampina — hold a combined 84% of value. Danone is now in fifth place, and is recovering from the Fonterra incident
  • Hong Kong’s packaged food sales are dominated by hypermarkets, supermarkets and hard discount outlets, which accounted for 59% of sales in 2015, up from 57% in 2009.
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
    • Definitions: This report provides two sets of data
  • Background to the Market
    • Births - Live Birth Rates: Until recently, the number of births was distorted by mainland women having their babies in Hong Kong to exploit residence rights
      • Table Live Births & Population Trends, 2006-2016
    • Births - Live Birth Rates: In 2016, a total of just under 60,000 babies are expected to be born to women resident in Hong Kong
    • Births - Live Birth Rates: The proportion of births to non resident women has dropped to less than 10%
      • Table Birth Trends by Mother's Place of Residence, 2006-2015
    • The Consumer: Although Hong Kong has one of the highest standards of living in the world, there is significant income inequality
    • Socio-demographic Trends - Family Structure: Not only do women marry later now, but they also tend to postpone the birth of their first child
      • Table Trends in Marriages & Divorces, 2009-2015
    • Socio-demographic Trends -Number of Women of Child Bearing Age: The number of women in the peak childbearing years (25-39) has increased
      • Table Number of Women of Childbearing Age of Mother, 2010 & 2015
    • Socio-demographic Trends - Births by Age of Mother: Women aged 25-39 account for the bulk of births, at 87% in 2015
      • Table Live Births by Age of Mother, %, 2010-2015
    • Working Women - Female Employment : Employment rates among women of childbearing age are high, at over 80%
      • Table Employment Rates by Age Group, %, 2014 & 2015
    • Working Women - Legislation: Maternity leave duration is short and there is no legislation regarding breastfeeding breaks
    • Breastfeeding Trends - Promotion: Although Hong Kong's Government is clearly pro breastfeeding, there is as yet no legislation in this area
    • Breastfeeding Trends - Prevalence: The breastfeeding initiation rate has been growing in the past two decades, reaching a high of 88% in 2015
      • Table Breastfeeding Rates on Discharge, 1992-2015
    • Breastfeeding Trends - Duration : A 2015 Ministry of Health survey revealed that only 27% of babies were being breastfed at four months
    • Regulations: Although the government has been considering restrictions on the marketing of breast milk substitutes, there is currently no legislation
    • Regulations: In 2014, the Legislative Council introduced rules on the labeling and composition of infant milks and baby food
  • Market Overview
    • Market Overview: Although sales of products destined for the mainland have fallen back in recent years, they still account for over half of the total
    • Market Overview: Total sales in Hong Kong still include a large proportion of sales destined for mainland China
      • Table Total Baby Food Market Size, 2016 & Growth Rates, 2010-2016
    • Market Overview: In the domestic market, milks dominate, accounting for 85% of volume, but consumption levels are approaching saturation level
      • Table Domestic Baby Food Market Size, 2016 & Growth Rates, 2010-2016
    • Manufacturer Shares: The market is the preserve of multinationals, with the top four accounting for over 84% of value sales
      • Table Baby Food: Manufacturer Shares, Value, %, 2014-2016
    • Manufacturer Shares: Despite the dominance of the milks suppliers, several other players have a strong presence in individual sectors
      • Table Baby Food: Manufacturer Shares by Sector, %, 2016
    • The Future: The parallel trade will decline but remain significant, while the dominance of milks will see the volume of the market as a whole shrink
      • Table Total Baby Food Projected Market Size, 2022, &Growth Rates, 2016-2022
    • The Future: Total local consumption is forecast to reach 9,166 tons by 2022, a 13.7% increase over 2016
      • Table Domestic Baby Food Projected Market Size, 2022 & Growth Rates, 2016-2022
  • Sector Analysis
    • Definitions: Baby Milks
    • Milks Sector Trends: Demand from mainland China - the main factor in the growth in infant formula up to 2014 - has now abated a little
    • Milks Sector Total Trends: Measures to address local shortages and changes in conditions in mainland China have begun to slow sales
    • Milks Domestic Sector Trends: In contrast with the total market, consumption within Hong Kong has remained fairly stable
    • Milks Domestic Per Capita Trends: Even excluding the parallel trade, local consumption of infant formulae is high, at 114kg per baby born in 2016
    • Milks Segmentation: The market for growing-up milks is well developed in Hong Kong
    • Milks Segmentation: Prices of baby milks are generally high in Hong Kong
      • Table Baby Milks: Brand Price Positioning Analysis, 2016
    • Milks Segmentation: A significant proportion of baby milks are mid-priced products, retailing at HK$290 to HK$360
      • Table Baby Milks: Brand Price Positioning Analysis, 2016
    • Milks Segmentation: 900g products account for two-thirds of facings; cans and tubs are the most prevalent pack types
      • Table Baby Milks: Facings Allocation by Pack Type, 2016
      • Table Baby Milks: Facings Allocation by Pack Size, 2016
    • Milks Manufacturer Shares: The market is almost entirely in the hands of the multinationals, with the top five accounting for 94% of value
      • Table Baby Milks: Manufacturer Shares, 2010-2016
    • Baby Milks Manufacturer Shares: Mead Johnson continues to lead the baby formula market from Nestlé, Abbott, and FrieslandCampina
    • Baby Milks Brands: Mead Johnson's Enfa range leads, with Nestlé's S-26 stable and Abbott's Similac also significant
    • Baby Milks Brands: There are many minor brands on the market, mostly from European and Asian/Australasian suppliers
    • Definitions: Cereals & dry Meals
    • Cereals & Dry Meals Sector Trends: The baby cereals & dry meals sector is small at 385 tons in 2016, but has grown by over 50% since 2010
    • Cereals & Dry Meals Per Capita Trends: Per capita consumption is high in comparison with many markets in the region, at 6.4kg in 2016
    • Cereals & Dry Meals Segmentation: A significant proportion of products are marketed as organic cereals
      • Table Baby Cereals & Dry Meals: Price Positioning, 2016
    • Cereals & Dry Meals Segmentation: Prices range from HK$190 to HK$480 per kilogram
      • Table Baby Cereals & Dry Meals: Price Positioning, 2016
    • Cereals & Dry Meals Segmentation: The majority of products are packaged in boxes, with 250g the most prevalent pack size
      • Table Baby Cereals & Dry Meals: Facings Allocation by Pack Type, 2016
      • Table Baby Cereals & Dry Meals: Facings Allocation by Pack Size, 2016
    • Cereals & Dry Meals Manufacturers Shares: The market is dominated by three players: Nestlé, Heinz, and Hipp with a combined 75.5% of value sales
      • Table Baby Cereals : Manufacturer Shares, Value & Volume, %, 2014-2016
    • Cereals & Dry Meals Brands: Nestlé and Heinz are losing share to organic brands
    • Definitions: Wet Baby Meals
    • Wet Meals Sector Trends: This is now the second largest sector of the baby food market in terms of volume
    • Wet Meals Per Capita Trends: At 11kg, per capita consumption is well above the levels seen in the region as a whole, and on a par with Singapore
    • Wet Meals Segmentation: Sweet meals dominate, and organic products account for a large share of the market
      • Table Wet Meals: Price Positioning, 2016
    • Wet Meals Segmentation: Products packaged in pouches (many of which are also organic) retail at a premium to products in jars
      • Table Wet Meals: Price Positioning, 2016
    • Wet Meals Segmentation: Most baby meals are packaged in glass jars, although the pouch sector is significant
      • Table Wet Meals: Facings by Pack Type, 2016
    • Baby Meals Manufacturers & Brands: Hain Celestial, Hipp, and Heinz dominate the category, accounting for two-thirds of sector volume in 2016
      • Table Wet Meals: Manufacturer Shares, Value & Volume %, 2014 & 2016
    • Definitions: Drinks
    • Baby Drinks Sector Trends: Volume sales are low and have shown no growth over the past five years
    • Baby Drinks Per Capita Trends: Per capita consumption of drinks was 1.3 liters in 2016, a 5% increase from 2010
    • Baby Drinks Segmentation: The sector consists mainly of ready-to-drink fruit juices, but a few baby waters are also on sale
      • Table Baby Drinks: Price Positioning, 2016
    • Baby Drinks Segmentation: Most drinks are sold in cartons, with 150ml the dominant pack size
      • Table Baby Drinks: Facings Allocation by Pack Size
      • Table Baby Drinks: Facings Allocation by Pack Type
    • Baby Drinks Manufacturers & Brands : Heinz, Nestlé, and Hipp dominate sales, with a combined value share of 88%
      • Table Baby Drinks: Manufacturer Shares, Value & Volume, 2014 & 2016
    • Definitions: Finger Foods
    • Finger Foods Sector Trends: The swing towards more modern snacks fueled 78% growth between 2010 and 2016
    • Finger Foods Per Capita Trends: Per capita consumption of finger food was 1.6kg in 2016, a 17% increase over 2010
    • Finger Foods Segmentation: The variety of finger foods is broadening from teething rusks to biscuits, puffs, rice cakes, and other snacks
    • Finger Foods Segmentation: Rusks and biscuits retail at a lower price than the more modern snacks and puffs
      • Table Finger Foods: Price Positioning, 2016
    • Finger Foods Segmentation: Pack materials and types vary according to the finger food type
      • Table Finger Foods: Facings Allocation by Pack Size
      • Table Finger Foods: Facings Allocation by Pack Type
    • Finger Foods Manufacturers & Brands: There are a number of specialized companies active in the finger foods sector, but the multinationals dominate
      • Table Finger Foods: Manufacturer Shares, Value & Volume, 2014 & 2016
  • Production and Trade
    • Production: Hong Kong is entirely dependent on imports
    • Imports: Imports have risen sharply as demand from mainland Chinese parents purchasing infant formula in Hong Kong has boomed
    • Exports: In the absence of any domestic production, official exports are low at 882 tons in 2015
  • Company Profiles
    • Company Profiles: Four multinationals - Mead Johnson, Nestlé, Abbott and FrieslandCampina - hold a combined 84% of value and 81% of volume
    • Company Profiles: Mead Johnson Nutrition
      • Table Market shares, 2016:
      • Table Mead Johnson: Sales in China & Hong Kong, 2009-2015
    • Company Profiles: Nestlé Hong Kong Limited
      • Table Market shares, 2016:
    • Company Profiles: Abbott Laboratories Limited
      • Table Market shares, 2016:
    • Company Profiles: FrieslandCampina (Hong Kong) Limited
      • Table Market shares, 2016:
    • Company Profiles: Danone Nutricia
      • Table Market shares, 2016:
    • Company Profiles: Heinz Hong Kong Limited
      • Table Market shares, 2016:
  • Distribution
    • Retail Structure: Hong Kong's packaged food sales are dominated by hypermarkets, supermarkets and hard discount outlets
      • Table Packaged Food Sales by Channel, HK$ bn, 2009-2015
    • Baby Food Retailing: Modern retail chains and pharmacies/drugstores are the main outlets, while online purchasing is also becoming significant
      • Table Baby Food Sales by Channel, % Value, 2010-2016
  • Economic Background
    • Economic Background: Attempts to alter the democratic institutions of the SAR have resulted in prolonged outbreaks of civil unrest
      • Table Key Macro-Economic Indicators, 2010-2017
    • Key Macroeconomic Forecasts: The economy is generally strong, and although GDP growth slowed in 2016, it is subsequently expected to rally
      • Table Annual Retail Price & GDP Growth, 2010-2022
  • Prospects and Forecasts
    • Birth and Population Projections: By 2022, GlobalData expects the number of births to reach 65,153, representing an 8.9% increase over 2016
      • Table Birth & Population Projections, 2006-2022
    • Forecast Overview: The parallel trade with mainland China will shrink, but domestic consumption will continue to rise
    • Future Trends: Although demand will be boosted by the rise in the number of births, the parallel trade with China will remain the biggest influence
    • Future Trends: Although parallel sales of milks will decline, all sectors will expand in the domestic market up to 2022
  • Appendix
    • Appendix - The Baby Population: The baby population has grown significantly and is expected to continue to rise
      • Table Baby Population, Number of Babies , 2006-2022
    • Appendix - Women of Childbearing Age: The number of women in the peak childbearing years (25-39) is increasing
      • Table Number of Women of Childbearing Age by Age Group, 2010-2022
    • Appendix - Market Value: Strong growth in infant formula for consumption on the mainland boosted sales up to 2014, but this effect is now subsiding
      • Table Baby Food: Total Market Value, Current Prices, 2010-2016
    • Appendix - Market Value: Although the total milks sector is now declining, all other sectors are continuing to grow
      • Table Baby Food: Total Market Value, Constant Prices, 2010-2016
    • Appendix - Market Value: The total market (including sales to mainland consumers) stood at US$829 million in 2016
      • Table Baby Food: Total Market Value, US$ Million, 2010-2016
    • Appendix - Market Volume: Consumption including sales to the mainland peaked at 23,002 tons in 2014 but by 2016 had fallen back to 18,575 tons
      • Table Baby Food: Total Market Volume, Tons, 2010-2016
    • Appendix - Market Value: Sales of baby food for the local market have remained fairly stable in the last few years
      • Table Baby Food: Domestic Market Value, Current Prices, 2010-2016
    • Appendix - Market Value: Since 2014 the local market has fallen in constant price terms
      • Table Baby Food: Domestic Market Value, Constant Prices, 2010-2016
    • Appendix - Market Value: The domestic market was valued at US$426 million in 2016
      • Table Baby Food: Domestic Market Value, US$ Million, 2010-2016
    • Appendix - Market Volume: Infant formula dominates the local market, but other sectors are gradually gaining share
      • Table Baby Food: Domestic Market Volume, Tons, 2010-2016
    • Appendix - Per Capita Expenditure: Per capita expenditure on baby food rose by over 50% between 2010 and 2016, to HK$55,388
      • Table Baby Food: Per Capita Expenditure, Constant Prices, 2010-2016
    • Appendix - Per Capita Expenditure: In constant price terms, per capita expenditure has stagnated in the last five years
      • Table Baby Food: Domestic Per Capita Expenditure, US Dollars, 2010-2016
    • Appendix - Per Capita Expenditure: Expenditure per baby stood at US$7,119 in 2016
      • Table Baby Food: Domestic Per Capita Expenditure, US Dollars, 2010-2016
    • Appendix - Per Capita Consumption: Per capita consumption is continuing to creep upwards, despite its existing high level of almost 135kg
      • Table Baby Food: Domestic Per Capita Expenditure, Grams, 2010-2016
    • Appendix - Milks: Sales destined for mainland China outweigh domestic sales, and have grown much faster
      • Table Baby Milks: Sector Trends, Total Sales 2010-2016
    • Appendix - Milks: Growing-up milks are popular and steadily gaining share at the expense of first- and second-stage formulae
      • Table Baby Milks: Market Segmentation, % Value, HK$ Million, 2010-2016
      • Table Baby Milks: Market Segmentation, % Volume, Tons, 2010-2016
    • Appendix - Milks: Most infant formulae retail at HK$200-300 per kg
      • Table Baby Milks: Brand Price Analysis, 2016
    • Appendix - Milks: The leading manufacturers market their products in the premium price bracket
      • Table Baby Milks: Brand Price Analysis, 2016
    • Appendix - Cereals & Dry Meals: This sector has shown the fastest growth in the domestic market, with a 53% rise over the 2010-2016 period
      • Table Baby Cereals & Dry Meals: Sector Trends, Total Sales, 2010-2016
    • Appendix - Wet Meals: Sales value more than doubled between 2010 and2016
      • Table Baby Wet Meals: Sector Trends, Total Sales, 2010-2016
    • Appendix - Drinks: The baby drinks sector is tiny and showing only limited growth
      • Table Baby Drinks: Sector Trends, Total Sales, 2010-2016
    • Appendix - Finger Foods : Consumption has grown by a quarter since 2010, and prices are rising in real terms as snacks become more popular
      • Table Finger Foods: Sector Trends, Total Sales, 2010-2016
    • Appendix - Imports: Imports - dominated by milks - have flourished to fuel the growing demand from mainland China
      • Table Imports of Baby Food by Type, Volume (Tons), 2010-2015
      • Table Imports of Baby Food by Type, Value, US$ '000, 2010-2015
    • Appendix - Imports: Ireland has taken over from the US as the principal source of imports of milk & cereals
      • Table Imports of Baby Food by Country of Origin, Volume, 2013-2015
    • Appendix - Imports: Imports of other baby food come from a wide range of origins
      • Table Imports of Baby Food by Country of Origin, Volume, 2013-2015
    • Appendix - Imports: In value terms, Ireland is predominant in the export of milks & cereals to Hong Kong, supplying mainly premium products
      • Table Imports of Baby Food by Country of Origin, Value, 2013-2015
    • Appendix - Imports: The UK, the US, and Italy accounted for 62% of other baby food import value in 2015
      • Table Imports of Baby Food by Country of Origin, Value, 2013-2015
    • Appendix - Exports: Exports of baby food are low and composed primarily of milks & cereals
      • Table Exports of Baby Food by Type, Volume, Tons, 2010-2015
      • Table Exports of Baby Food by Type, Value, US$ '000, 2010-2015
    • Appendix - Exports: Most baby food exports are destined for China or Macao
      • Table Exports of Baby Food by Country of Destination, Volume, 2013-2015
    • Appendix - Exports: Macao takes high priced exports from Hong Kong and in 2015 received almost 80% of Hong Kong's milks & cereals exports
      • Table Exports of Baby Food by Country of Destination, Value, 2013-2015
    • Appendix - Value Forecasts: Total market value, including sales for consumption in mainland China, is forecast to rise to HK$7.3 billion by 2022
      • Table Baby Food: Total Market Value Forecasts, Current Prices, 2016-2022
    • Appendix - Value Forecasts: In real terms, the total market will fall by 3.4% between 2016 and 2022, as a result of declining cross-border sales
      • Table Baby Food: Total Market Value Forecasts, Constant Prices, 2016-2022
    • Appendix - Value Forecasts: Total market value is forecast to increase by only 12.5% between 2016 and 2022
      • Table Baby Food: Total Market Value Forecasts, US Dollars Million, 2016-2022
    • Appendix - Volume Forecasts: Total consumption will fall back by 7% due to the decline in sales of infant formulae destined for the Chinese mainland
      • Table Baby Food: Total Market Volume Forecasts, Tons, 2016-2022
    • Appendix - Value Forecasts: The domestic market will show growth in all sectors, with total sales rising to HK$4.4 billion
      • Table Baby Food: Domestic Market Value Forecasts, Current Prices, 2016-2022
    • Appendix - Value Forecasts: At constant prices, the domestic market will expand by 14% over the 2016-2022 period
      • Table Baby Food: Domestic Market Value Forecasts, Constant Prices, 2016-2022
    • Appendix - Value Forecasts: The domestic market will increase by 33% by 2022
      • Table Baby Food: Domestic Market Value Forecasts, US Dollars Million, 2016-2022
    • Appendix - Volume Forecasts: Domestic consumption will rise by almost 14% to 9,166 tons in 2022
      • Table Baby Food: Domestic Market Volume Forecasts, Tons, 2016-2022
    • Appendix - Per Capita Forecasts: Expenditure per baby will reach HK$67,497 in 2022
      • Table Baby Food: Domestic Per Capita Expenditure, Current Prices, 2016-2022
    • Appendix - Per Capita Forecasts: Even at constant prices, domestic per capita expenditure will be up by 5% between 2016 and 2022
      • Table Baby Food: Domestic Per Capita Expenditure, Constant Prices, 2016-2022
    • Appendix - Per Capita Forecasts: Per capita expenditure will see a 22% increase at US dollar prices
      • Table Baby Food: Domestic Per Capita Expenditure, US Dollars, 2016-2022
    • Appendix - Per Capita Forecasts: Apart from the very small drinks sector, per capita consumption will increase in all sectors, to a total of 140.7kg in 2022
      • Table Baby Food: Domestic Per Capita Expenditure, Grams, 2016-2022
    • Appendix - Storechecks: The largest proportion of facings, 39%, was accounted for by wet meals, followed by milks (26%)
      • Table Facings Allocation by Product Type
    • Summary Methodology

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