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The Baby Food Sector in Australia 2017

The Baby Food Sector in Australia 2017

Summary

The Baby Food Sector in Australia 2017, is an analytical report by GlobalData which provides extensive and highly detailed current and future market trends in the Australian market.

The number of births has fluctuated but increased in 2015 and 2016, while the number of women combining motherhood and work rose. Sales of baby food increased by more than 20% between 2010 and 2016, while consumption rose up to 2013 but has subsequently fallen back. Milks and cereals & finger foods experienced volume growth; finger foods in particular were dynamic. Milks represent the bulk of baby food sales but cereals & finger foods increased their share. The share held by wet meals declined, while sales of drinks slumped. Between 2016 and 2022 the Australian baby food market is expected to grow by over40% in value, whilst consumption is expected to rise thanks to the forecast increase in the number of births.

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
  • The number of births has fluctuated in recent years but increased in 2015 and 2016; there is a rise of 4.4% since 2010.
  • Milks represent the largest proportion of baby food sales, accounting for 57.4% of overall value and 46.1% of volume in 2016. Cereals & finger foods increased their share of the sector, ending the period with a 13.3% share of value sales, up from 9.7% in 2010.
  • Drinks have never been very popular and have lost further share over the past few years, with the result that in 2016 they claimed less than 1% of retail sales.
  • Production figures were skewed by demand for Australian-produced infant formula from China. Imports of milks have risen dramatically since 2013, largely due to demand for products purchased in Australia for export to China. Official exports are low.
  • Heinz is the largest baby food producer, but has been joined by a number of dairies producing infant formula almost exclusively for the Chinese market.
  • Per capita consumption of milks and cereals/finger foods is likely to continue to rise throughout the forecast period, but meals will see a small decline and drinks are likely to disappear from the market.
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
    • Births - Live Birth Rates: Live births reached a new peak of 311,100 in 2016
      • Table Birth & Population Trends, 2006-2016
    • Births - Birth Rates by Region: Three states (New South Wales, Victoria, and Queensland) account for over three-quarters of live births
      • Table Births by State, 2011-2015
    • The Consumer: Living standards are among the highest in the world, but there has been little real growth over the past five years
      • Table Income Levels by Income Quintiles, 2014
    • The Consumer: An "alarming" proportion of toddlers are being given an unhealthy diet
    • Socio-demographic Trends - Family Structure: Two-thirds of babies are born to married couples
      • Table Marriage & Divorce Trends, 2010-2016
    • Socio-demographic Trends -Births by Age of Mother: There is a trend towards women postponing the start of their families
      • Table Breakdown of Live Births by Age of Mothers, 2011-2015
    • Socio-demographic Trends - Women of Childbearing Age: The number of women of childbearing age increased by 7.3% between 2009 and 2015
      • Table Number of Women of Childbearing Age by Age Group, 2009-2015
    • Working Women - Female Employment: The number of women in employment rose by 8.2% between 2010 and 2016
      • Table Trends in Women in Employment, 2010-2016
      • Table Labor Force Status of Women with Children, 1996 & 2006
    • Working Women - Maternity Legislation: In 2010, a comprehensive paid parental leave (PPL) scheme was introduced
    • Breastfeeding Trends - Promotion: The government is currently developing a new national breastfeeding strategy for 2017 and beyond
    • Breastfeeding Trends - Prevalence: By the age of six months only 60% of babies in Australia were still being breastfed in 2010
      • Table Breastfeeding Trends by Age of Baby, 1995-2010
    • Breastfeeding Trends - Prevalence: Exclusive breastfeeding is high in the early months, but rapidly drops away
      • Table Exclusively Breastfed Infants by Age, % of Babies, 2010 & 2011/12
    • Breastfeeding Trends - Prevalence: By six to eight months, 76% of babies are receiving infant formula
      • Table Type of Milk Fed to Babies, % of Babies, 2015
    • Breastfeeding Trends - Prevalence: Parents are delaying the introduction of both infant formula and other non-breast milk, as well as solids
      • Table Consumption of Non-Breast Milk & Solids by Age of Infant, 2004 & 2010
    • Breastfeeding Trends - Prevalence: By six months, 43.2% of babies have stopped receiving breast milk
      • Table Consumption of Breast Milk & Solids by Age of Infant , 2011/12
    • Breastfeeding Trends - Prevalence: Mothers from lower socio-economic groups and certain ethnic groups are less likely to breastfeed
      • Table Breastfeeding by Economic Status of Mother & Age of Baby, 2010
    • Breastfeeding Trends - Duration: Non-indigenous, older, and better educated mothers are more likely than younger mothers to breastfeed, and for longer
      • Table Breastfeeding by Age & Educational Attainment of Mother & Age of Baby, 2010
    • Regulations: The International Code of Marketing of Breast-milk Substitutes is not enshrined in law, but a voluntary code is in place
    • Regulations: The government has published guidelines on infant feeding, and has introduced laws to protect the right to breastfeed
  • Overview
    • Overview: The value of the baby food sector stood at A$383 million in 2016, representing an increase of 21.6% since 2010
    • Overview: The cereals & finger foods category in particular is proving dynamic, but domestic sales of baby milks have also grown
      • Table Sector Size, 2016, &Growth Rates, 2010-2016
    • Manufacturer Shares: Some major changes in the make-up of the competition have occurred in the past five years
      • Table Baby Food: Manufacturer Shares, Value %, 2011-2016
    • Manufacturer Shares: Thanks to its strength in baby milks, Danone has taken leadership in value terms, although Heinz still leads in volume terms
      • Table Baby Food: Manufacturer Shares by Category, %, 2016
    • Manufacturer Shares: Each category has one or two dominant players, primarily Danone, Heinz, and Rafferty's Garden
    • The Future: Between 2016 and 2022, baby milks and cereals & finger foods are expected to enjoy the highest levels of growth
      • Table Projected Sector Size, 2022, &Growth Rates, 2016-2022
  • Category Analysis
    • Sector Analysis: Baby Milks
    • Milks Sector Trends: Excluding retail purchases of milk that are subsequently diverted to China, domestic consumption has fallen since 2013 but rose in 2016
    • Milks Per Capita Trends: Per capita consumption rose by 11.5% between 2010 and 2016, but has actually fallen over the last two years
    • Milks Segmentation: Third-stage milks have raised their profile significantly, and currently represent a third of category value, compared with a quarter in 2010
    • Milks Segmentation: Premium milks recorded the most growth during the historic period
    • Milks Segmentation: Milks retail from approximately A$13 to A$55 per kilogram
      • Table Powdered Baby Milks: Brand Price Positioning Analysis, 2017
    • Milks Segmentation: The majority of top-selling brands fall into the mid-price category of between A$22 and A$30 per kilogram
    • Milks Segmentation: The vast majority of powdered milks are sold in cans, with the 900g size predominant
    • Milks Manufacturer Shares: There have been substantial changes in the importance of the leading manufacturers
      • Table Baby Milks: Manufacturer Shares, Value & Volume, %, 2010-2016
    • Milks Manufacturer Shares: Danone continues to lead the market, but has been strongly challenged by a2 and Bellamy's
    • Milks Brands: Companies have rationalized their brand portfolios in recent years
      • Table Baby Milks: Brand Shares, Value, %, 2010-2016
    • Milks Brands: Aptamil is the market leader, but a2 and Bellamy's Organic have mounted a strong challenge
    • Milks Brands: S-26, Nan, and Heinz Nurture have all lost share due to the growth of premium brands
    • Milks Brands: There has been a proliferation of new brands on the market in the last few years, but they have failed to make a significant impact to date
    • Sector Analysis: Cereals & Finger Foods
    • Cereals & Finger Foods Category Trends: The category has enjoyed dynamic growth, rising by 66% in value between 2010 and 2016
    • Cereals & Finger Foods Per Capita Trends: Per capita expenditure rose by 59% between 2010 and 2016 to A$164
    • Cereals & Finger Foods Segmentation: Finger foods are expanding fast, while consumption of cereals has been falling in volume terms since 2012
      • Table Baby Cereals & Finger Foods: Category Segmentation, 2011-2016
    • Cereals & Finger Foods Segmentation: Most growth has occurred in finger foods, where organic credentials are often considered less important by mothers
    • Cereals & Finger Foods Segmentation: Cereal prices range from US$11 to US$42 per kilogram for dry products
      • Table Cereals: Price Positioning, 2017
    • Cereals & Finger Foods Segmentation: Finger food prices range from US$20 to US$122 per kilogram
      • Table Finger Foods: Price Positioning, 2017
    • Cereals & Finger Foods Segmentation: For finger foods, a wide variety of packaging, depending on the exact product type, is available
    • Cereals & Finger Foods Manufacturers & Brands: Once the preserve of Heinz, a large number of new competitors have recently entered the finger foods segment
      • Table Baby Cereals & Finger Foods: Manufacturer Shares, Value & Volume, %, 2010-2016
    • Cereals & Finger Foods Manufacturer Shares: Although its share of the category has fallen steeply between 2010 and 2016, Heinz nonetheless remains dominant
    • Cereals Manufacturers & Brands: Heinz continues to cling on to its lead in baby cereals, despite a falling share
      • Table Baby Cereals : Manufacturer & Brand Shares, 2011-2016
    • Finger Foods Manufacturers & Brands: Heinz also retains a dominant position in the finger foods segment, although here, too, it is gradually losing share
      • Table Baby Finger Foods: Manufacturer Shares, 2011-2016
    • Category Analysis: Meals
    • Baby Meals Category Trends: Demand in this category was initially led by the rising number of working mothers, but consumption has been falling since 2011
    • Baby Meals Per Capita Trends: Consumption has been falling since a peak in 2011
    • Baby Meals Segmentation: The wet meals category has witnessed the expansion of the toddler meals segment
      • Table Breakdown of Sales of Wet Meals by Target Age Group, 2009(1)
    • Baby Meals Segmentation: Since 1995, organic baby meals have been a feature of the wet meals category, although their penetration appears to have peaked
      • Table Organic Baby Food: Category Penetration, 1997-2016
    • Baby Meals Segmentation: Jars undercut pouch prices by a significant margin
      • Table Wet Meals: Price Positioning, 2017
    • Baby Meals Segmentation: Within the space of a few years, pouches have captured approaching 80% of the market
      • Table Wet Baby Meals: Sales by Pack Type, % Value, 2011-2016
    • Baby Meals Manufacturer Shares: Heinz has lost share drastically since 2009 and in 2013 ceded first place to Rafferty's Garden
      • Table Wet Baby Meals: Category Shares, Value & Volume, %, 2010-2016
    • Baby Meals Manufacturer Shares: Only Organic is the only other significant player, with a share of 12.5% in 2016
      • Table Wet Baby Meals: Brand Shares by Type of Packaging, % Value 2012
    • Baby Meals Brands: Rafferty's Garden, now category leader, markets a broad range of variants for different age ranges, all packaged in pouches
    • Sector Analysis: Drinks
    • Baby Drinks Category Trends: The category has declined significantly, with particularly sharp falls in 2015 and 2016
    • Baby Drinks Per Capita Trends: Consumption has fallen back to 0.9kg per capita
    • Baby Drinks Manufacturers & Brands: Very few brands are available in this disappearing category
      • Table Baby Drinks: Manufacturer Shares, Value & Volume, %, 2010-2016
  • Production and Trade
    • Production: Production figures have been boosted by demand from China
    • Imports: New Zealand has supplied the majority of imports of milks & cereals in recent years
    • Exports: Following the Chinese melamine contamination, China became the main export destination for milks & cereals
  • Company Profiles
    • Industry Structure: Established international brands lost out to regional brands during the historic period
    • Company Profiles: Danone Nutricia Early Life Nutrition Pty Ltd
    • Company Profiles: HJ Heinz Australia Co. Ltd
    • Company Profiles: Rafferty's Garden Pty Limited
    • Company Profiles: Aspen Nutritionals Australia Pty Ltd
    • Company Profiles: Nestlé Australia Ltd
    • Company Profiles: Bellamy's Organics
    • Company Profiles: Only Organic Baby Food Ltd
    • Company Profiles: The a2 Milk Company
  • Distribution
    • Retail Structure: The main sales outlets for packaged food in Australia are hypermarkets, supermarkets, and hard discounters
      • Table Packaged Food Sales by Channel, A$ Billion, 2012-2017
    • Baby Food Retailing: Grocery stores have overtaken pharmacies as the main sales outlet during the past two decades
      • Table Baby Milks: Sales Segmentation, Grocery vs Pharmacy, % Value, 1997-2016
  • Economic Background
    • Economic Background: Overall, the Australian economy has performed well: GDP has regularly increased by 2-3% for the last five years
      • Table Economic Indicators, 2010-2017
    • Key Macroeconomic Forecasts: The Australian economy is expected to continue to perform relatively strongly for the foreseeable future
      • Table Key Macroeconomic Forecasts, 2016-2022
  • Prospects and Forecasts
    • Birth and Population Projections: Based on Australian Government projections, the number of births is expected to increase over the next few years
      • Table Birth & Population Projections, 2010-2022
    • Forecast Overview: Between 2016 and 2022 the value of the Australian baby food market is expected to grow by an overall 41.4%
    • Future Trends: Sector value is predicted to rise to A$542 million in 2022, whilst consumption is expected to rise by 10.6% to 21,995 tons
  • Appendix
    • Appendix - The Baby Population: The baby population is expected to rise to just over one million by 2022
      • Table Baby Population, Number of Babies, 2006-2022
    • Appendix - Market Value: In current price terms, the overall baby food market has increased 21.6% since 2010, to A$383.2 million
      • Table Baby Food: Sector Value, Current Prices, 2010-2016
    • Appendix - Market Value: In constant price terms, the growth rate was significantly less at +7.1%
      • Table Baby Food: Sector Value, Constant Prices, 2010-2016
    • Appendix - Market Value: Sales in US dollars fell by 1% between 2010 and 2016 to US$286 million in 2016
      • Table Baby Food: Sector Value, US$ Million, 2010-2016
    • Appendix - Market Volume: In contrast to the strong performance in value terms, overall volume has been falling back since 2013
      • Table Baby Food: Sector Volume, Tons, 2010-2016
    • Appendix - Per Capita Expenditure: Per capita expenditure at current price levels increased by 16.4% between 2010 and 2016
      • Table Baby Food: Per Capita Expenditure, Current Prices, 2010-2016
    • Appendix - Per Capita Expenditure: In constant price terms, per capita expenditure rose by only 2.6%
      • Table Baby Food: Per Capita Expenditure, Constant Prices, 2010-2016
    • Appendix - Per Capita Expenditure: Per capita expenditure in US dollars fell by 5.3% between 2010 and 2016 to US$919
      • Table Baby Food: Per Capita Expenditure, US$ Dollars Prices, 2010-2016
    • Appendix - Per Capita Consumption: Per capita consumption fell by 4.8% between 2010 and 2016
      • Table Baby Food: Per Capita Consumption, Grams, 2010-2016
    • Appendix - Milks: Value sales rose by 28%, but market growth is significantly lower in volume terms
      • Table Baby Milks: Category Trends, 2010-2016
    • Appendix - Milks: Toddler milk is the most dynamic sector of the market
      • Table Baby Milks: Category Segmentation, Value and Volume, 2010-2016
    • Appendix - Milks: The majority of top-selling brands fall into the mid-price category of between A$22 and A$30 per kilogram
      • Table Milk Brand Price Analysis, 2017
    • Appendix - Milks: Super-premium brands, including a2 Platinum, Novalac, and the more recently launched Aptamil ProFutura, sell in the A$32-37 per kilogram range
    • Appendix - Milks: Heinz's Nurture is the main low-priced branded range
    • Appendix - Cereals & Finger Foods: The cereals & finger foods category was particularly dynamic thanks to strong growth in finger foods
      • Table Baby Cereals & Finger Foods: Category Trends, 2010-2016
    • Appendix - Meals: Sales of wet meals have risen by only 2.3%, marginally below the rate of inflation, while volume sales have dropped
      • Table Baby Meals: Category Trends, 2010-2016
    • Appendix - Drinks: Drinks have never been very popular and have lost further share over the past few years
      • Table Baby Drinks: Category Trends, 2010-2016
    • Appendix - Imports: Imports of milks and cereals have risen dramatically from 2013 onwards
      • Table Milks & Cereals: Import Trends, 2010-2016
    • Appendix - Imports: New Zealand accounts for the vast majority of imports
      • Table Imports of Milks & Cereals by Country of Origin, Value, 2015 & 2016
    • Appendix - Imports: Imports of other baby foods have fluctuated during the period but have risen overall
      • Table Other Baby Food: Import Trends, 2010-2016
    • Appendix - Imports: New Zealand represents the largest supply country, followed by the US
      • Table Imports of Other Baby Food by Country of Origin, Value, 2015 & 2016
    • Appendix - Exports: Exports of baby milks & cereals increased dramatically in 2015 and 2016
      • Table Milks & Cereals: Export Trends, 2010-2016
    • Appendix - Exports: Following the Chinese melamine contamination, China became the main export destination
      • Table Exports of Milks & Cereals by Country of Destination, Value, 2015 & 2016
    • Appendix - Exports: The majority of other baby food exports comprise sweet meals
      • Table Other Baby Food : Export Trends, 2010-2016
  • Appendix - Exports: Most of Australia's exports of other baby food are destined for other countries in the Pacific
    • Table Exports of Other Baby Food by Country of Destination, Value, 2015 & 2016
    • Appendix - Value Forecasts: Between 2016 and 2022, the Australian baby food market is expected to reach A$542 million
      • Table Baby Food: Market Value Forecasts, Current Prices, 2016-2022
    • Appendix - Value Forecasts: When inflation is taken into account, value growth will amount to 23.9%
      • Table Baby Food: Market Value Forecasts, Constant Prices, 2016-2022
    • Appendix - Value Forecasts: In 2022, sales are expected to show a 41.4% increase over 2016
      • Table Baby Food: Market Value Forecasts, US$ Million, 2016-2022
    • Appendix - Volume Forecasts: Consumption is expected to rise by 10.6% to 21,995 tons
      • Table Baby Food: Market Volume Forecasts, Tons, 2016-2022
    • Appendix - Per Capita Forecasts: By 2022, per capita expenditure is expected to stand at A$1,592
      • Table Baby Food: Per Capita Expenditure, Current Prices, 2016-2022
    • Appendix - Per Capita Forecasts: In constant price terms, per capita expenditure should rise by 13.2%
      • Table Baby Food: Per Capita Expenditure, Constant Prices, 2016-2022
    • Appendix - Per Capita Forecasts: Per capita expenditure is expected to amount to US$1,188 by 2022
      • Table Baby Food: Per Capita Expenditure, US$ Dollars, 2016-2022
    • Appendix - Per Capita Forecasts: Per capita consumption of milks and cereals/finger foods are likely to continue to rise throughout the period
      • Table Baby Food: Per Capita Consumption, Grams, 2016-2022
    • Summary Methodology

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