Baby & infant products 2021: baby formula flops as food & snacks rise

It’s tempting to put the £34.4m fall in sales of babymilk formula down to a rise in breastfeeding rates. After all, many working mothers haven’t had the hassle of the commute or expressing milk at the office to interrupt the natural order of things for much of the past year.

“Anecdotal feedback suggests the time at home, including support from friends, family and neighbours, enabled a longer breastfeeding journey,” says British Specialist Nutrition Association director general Declan O’Brien. “Academic research published in the Maternal and Child Nutrition Journal found increased time at home has been positive for some breastfeeding women.”

Some but not all. A 2020 study found that while 40% of breastfeeding mothers thought lockdown had a positive effect on their experience, 30% said it had a very negative impact [Brown, Shenker]. Eighty two  per cent of that group stopped breastfeeding early, citing lack of support and feelings of isolation. These two groups have, in effect, cancelled out each other’s effect on headline baby formula sales.

“Babymilk has lost between £30m and £35m in each of the past three years, so Covid has not really done anything to accelerate or arrest this trend,” says NielsenIQ insight team leader Stephen Bough.

What the pandemic has done is accelerate trends that were already influencing the types of infant milk formula parents were buying. “It has increased the focus on plant-based, sustainability, free-from and organic, as part of the wider health trend,” says Bough, pointing to the only top 10 brands in growth. “Kendamil and Piccolo had triple-digit growth, emphasising their organic and palm oil-free credentials; Neocate focused on hypoallergenic products for babies.”

Sustainability is certainly top of mind for many, says Danone Specialised Nutrition UK head of channel, shopper & category development Clare Denham. “Parents are prioritising sustainable lifestyles and ingredients,” she says. “We responded to this growing demand with the launch of our Aptamil Organic Formula Milks range a year ago, and the organic segment now has 7.3% market share.”

That hasn’t stopped Danone’s two biggest brands, Aptamil and Cow & Gate, suffering respective losses of £22.8m and £8.8m as challengers such as Kendamil and Piccolo have increased distribution. Number three brand SMA has lost £3.7m (7.7%). In volume terms, the big three have fared even worse, with Aptamil down 18%, Cow & Gate down 13.7% and SMA down 11.7%.

This reflects the ongoing shift away from milk powder to higher-margin ready-to-drink formats. “Parents are back on the go and want convenient and simple-to-use solutions and purchasing journeys,” says Denham. “We’ve seen this reflected in sales of liquid formula milk formats now making up almost a fifth (18%) of the value of the baby feeding market.”

Food & snacks

In terms of headline market performance, the impact of Covid on babyfood & snacks was similarly muted. Sales are up £12.2m on volumes down 0.3%, with brands that emphasise their sustainability and convenience outperforming the market.

“While there was Covid stockpiling last year, these stockpiles were soon consumed to leave the category largely untouched by Covid,” says Bough. “The trend towards going back to work this year has had a positive impact on the category, putting it back into growth. However, Cow & Gate was a major loser, suffering big distribution losses.”

On the other side of the coin, market leader Ella’s Kitchen has delivered most growth, with sales up £6.5m driven in part by a strong performance for its fruit purée pouches. Along with Organix (up £2.8m) and Kiddylicious (up £4.5m), it has benefited from growing demand for brands with strong sustainability and ‘natural’ credentials, as well as ongoing range expansions over recent years.

Number four brand Heinz, meanwhile, has grown £3.6m by harnessing that desire for all things natural in its latest innovation: a trio of plant-based baby meals under the Heinz by Nature brand, which hit shelves in the summer. The NPD came alongside the launch of two Let’s Cook pasta sauce and shapes home cooking kits in July.

But if brands really want to come across as natural and sustainable, they may well have to address their packaging. Nearly all babyfood pouches on the market are non-recyclable. In April, Piccolo claimed to have addressed the issue with Yellow & Go, which it said were the UK’s first 100% recyclable pouches, suitable for kerbside recycling.

Yellow & Go has an rsp of £4 for a pack of four pouches, significantly higher than most of its rivals. So its success will depend on what shoppers value more: sustainability or price.