The Baby Food Market in Italy 2017

The Baby Food Market in Italy 2017

Summary

In 2016, provisional statistics indicate only 474,000 births, 15.4% fewer than in 2006. Although a relatively wealthy country, ranked 29th in the world in 2015, it has struggled in recent years to maintain the standard of living it achieved in the 1990s. The highest standards of living remain in the North of Italy, although the centre is now not far behind. Italians place great emphasis on the quality of food and it is this that influences their purchases, rather than price alone.

Market has been contracting for the past six years and by 2016 stood at 60,989 tons, with value falling to €621 million (current prices), down by 10.6% since 2010. This was due to enforced price decreases in the milks sector and lower prices in real terms in all other sectors of the market, a result of competition between the leading brands, and manufacturers' efforts to stimulate sales. In real terms, value sales have fallen by 17.2% since 2010. Per capita consumption is high at 128.7kg, largely due to the unusually high volumes of wet meals and finger foods consumed.

Unusually, wet meals are the largest category in both volume and value terms, accounting for 49% of consumption and 41.5% of retail sales. Its share has increased, primarily at the expense of dry products and traditional products within the finger food sector. Milks accounted for 29% of retail sales in 2016, up from 28% in 2010. Consumption remains low, due to high prices and an increase in breastfeeding rates. Finger foods claimed 17% of retail sales and 23% of consumption, with rusks often used crumbled as a weaning food. Cereals, dry food, pasta, and drinks together accounted for only 12% of retail sales.

Grocery stores account for the majority of value sales, at 84% in 2016, a share that has been steadily rising since 2010, largely due to the convenience and lower prices often offered by the grocery sector. Distribution trends vary, however, according to product, with first-stage and special dietary baby milks continuing to do relatively well through pharmacy outlets, sanitarie and outlets specializing in children's products, although even here pharmacies are losing ground. Grocery stores are more successful in the sale of post-weaning foods, such as third-stage milks, wet meals, drinks, and finger foods.

Market is dominated by the multinationals Heinz and Danone with a combined 79.5% of value sales and 84% of volume sales in 2016. The only other player of significance, Nestlé, is well behind the leaders, with just 7%. Heinz continues to lead the market, mainly with its Plasmon brand, although it has come under increasing pressure from Danone. Heinz leads in the meals, drinks, and finger foods sectors, while Danone leads in milks and cereals. Other multinationals active on the market include Humana and Hipp, while local brands include the Neolatte milk brand, distributed by Unifarm.

Demand is expected to continue to fall, largely due to the forecast decline in the number of births, and slow economic progress. Between 2016 and 2022 consumption is predicted to decline by 7%, to 56,743 tons, with value growth of 6%, raising retail sales to €655 million in 2022. Per capita consumption is forecast to expand by only 2.3%, to 131.7kg, with the meals & others sector accounting for the majority of intake per baby. Consumption of baby milks, which remains notoriously low in Italy, is expected to continue to increase, to 15.9kg per capita. Meals will achieve the highest increase.

The report The Baby Food Market in Italy 2017 provides extensive and highly detailed current and future market trends in the Italian market.

In particular, this report provides the following analysis -

• 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: Heinz Italia SpA, Danone, Nestlé Italia SpA, Humana Italia SpA, Unifarm SpA, Hipp Italia srl, A Menarini Industrie Farmaceutiche Riunite srl, Granarolo SpA.

Scope

• Italy's baby population (aged 0-3 years) has declined steadily since a recent peak of just over million babies in 2009. By 2016, the total had dropped to million, a fall of 12.8% compared with 2006.
• The market for baby food stood at tons in 2016, representing a 12.8% decrease over 2010 adversely affected by the fall in the number of births, as well as by the poor economic situation.
• Wet meals are the largest category in both volume and value terms, accounting for 49% of consumption and 41.5% of retail sales.
• All of the leading market players are involved in the local production of baby food. The market is dominated by the multinationals Heinz and Danone with a combined 79.5% of value sales and 83.8% of volume sales in 2016.
• Vegetable-based and sweet meals account for the vast majority of exports, with milks & cereals accounting for just 5% in 2015.
• Grocery stores account for the majority of value sales, at 84% in 2016, a share that has been steadily rising since 2010, largely due to the convenience and lower prices often offered by the grocery sector.

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.