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Slowing Birth Rate and Increased Health Interest in Baby Nutrition Translates to ORGANICS
January 10, 2006
It was back in 1945, at the start of the Baby Boom generation, when the nation's focus shifted towards the needs of what would become, over the next 19 years, the largest generation ever. 76 million boomers invigorated the Baby Foods category with the demand for a more convenient (and speedier) way to feed these tiny but hungry mouths.
Baby food brands grew steadily and mirrored the birth rate.
But in 2002, the Centers for Disease Control reported the lowest annual birth rate (13.9 per 1,000 population) since national data first started being reported; continuing a twelve-year decline that began in 1990 and a 17 percent fall off.
Fewer births naturally translate to less Baby Food sales, but with the change in ethnic composition and the increase in births to older mothers (aged 35-44) the product mix has changed as well.
Of the 4,019,280 U.S. births in 2002, 57.3 percent were reported as White (non-Hispanic), 21.7 percent as Hispanic and 14.7 percent as Black. It's notable that in comparing just one year (2001 to 2002), birth rates of Whites dropped almost one percent, Hispanic births increased by almost 2.5 percent and Black births declined by about the same amount.
Older White new mothers and Hispanic mothers may have a lot in common when it comes to buying Baby Food. Older White mothers are more knowledgeable (and possibly concerned) about nutrition while typically Hispanic processed foods have less additives. They may well share the desire to feed their infants foods without growth hormones, high fructose corn syrup, genetically modified ingredients and pesticides fueling the only growth subcategory in the sector: Organic Baby Food.
Baby Food brands are responding. Gerber, the leading brand of baby food products, is meeting the trend head on with their organic Tender Harvest line, which features fruits, vegetables, cereals with fruit, and dinners, as are Horizon (for infant formula), Earth's Best (the brand that started the trend) and Healthy Times (with a special category available just for teethers). According to ACNielsen LabelTrends dollar sales of the total organic food category jumped 15% in a single year for the 52 weeks ending 08/13/05.
The baby foods showing the greatest opportunities are the organic baby milk and organic strained baby food categories. Organic baby milk went up an impressive 543.6% from 2003 to 2004, and is up an additional 261.1% so far this year. Organic strained baby food was up 8.1% in 2004, and 17.4% in 2005.
The U.S. Department of Agriculture (USDA) implementation of the National Organic Standards program, which mandated clearer labeling of organic products, has made it far easier for these time pressed shoppers to clearly identify these "purer" products. And with the expectation of a steadily declining U.S. birth rate, we can safely predict that baby food consumption will also decline; and the only bright spot will be in the organic baby food SKUs.
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