​Baby & infant products 2024: controversy in babycare as prices rise

The babycare category has been rife with controversy in recent weeks. It kicked off in early November, when an interim Competition & Markets Authority report on the category found parents were “paying over the odds” for infant formula.

While regulations – including a ban on price reductions, offers and deals – supported “important public health goals”, some aspects had “unintended consequences, contributing to consumers paying higher prices”, the watchdog reported.

As the result of limited incentive to compete on price, there was little pressure on suppliers or retailers to shelter shoppers from higher input costs, which had largely been passed on in full, it added.

Those price rises are all too apparent this year: babymilk is up 16.9% per average unit. In brands – which command almost 99% of the market – average price is up 17.4%. That’s despite decisions by several major mults to cut prices of branded formula lines in early 2024. The average price increases have grown value sales 2.3% but also helped to push volumes down 12.5%.

“Rising prices and increased cost of living has influenced purchasing behaviour over the past year as parents face tighter budgets,” notes Jason Wootton, NIQ client manager. “This shift has led to a heightened focus on value-driven products that balance affordability with quality and/or nutritional value.”

Against such a backdrop, Danone, owner of Aptamil and Cow & Gate, has focused on pushing larger packs, offering greater value.

“In 2024, we have step-changed the way we talk to parents by introducing much stronger communication about value for money, including how much parents can save with Cow & Gate’s follow-on milk 1.2kg value pack compared to our other formats,” says George Bates, Danone category development head.

The supplier needs that activity to turn around sales of the two brands, whose respective volumes have fallen 8.8% and 10.9%.

That’s even after Danone cut the wholesale price of Aptamil infant powdered formula by 7% in January – which led to cheaper lines in the mults. The move was an example of the supplier’s agility, Bates suggests. “We are constantly working to adapt to fast-changing market needs, including shoppers switching channels and looking for new products and formats to suit their needs,” he says.

One brand which clearly suits shoppers’ needs is Kendamil, which has grown units 74.7%. “Parents have more knowledge than ever at their fingertips and Kendamil continues to grow as the brand parents are recommending to each other,” says co-founder Will McMahon. The brand benefited from offering a premium recipe at a relatively low price, he adds.

Little Freddie furore

The controversy in babycare continued in November when some Little Freddie babyfood pouches for stage one weaning were found to contain higher levels of sugar than stated on pack. Some contained almost double the amount of sugar listed in the nutritional information.

Little Freddie’s UK general manager, Rich Keir, responded by saying: “Our products are always developed alongside registered paediatric nutritionists, and reflective of NHS and World Health Organization guidelines.”

However, its pouches in fact failed to meet WHO standards for on-pack sugar labelling, a subsequent assessment of 20 products listed on the Little Freddie website found. The brand soon pledged to update packaging and nutritional info of three SKUs.

Furore aside, Little Freddie has had an positive year. Its units are up 16.9% in a market where branded packs are down 6% – driven in part by high prices. At the same time, own label volumes have risen 2.2%. “With an average premium of +50% versus own label, market leaders are struggling to maintain share as value-conscious parents look for affordable alternatives,” acknowledges Keir.

Another player bucking the downward trend in volumes is Organix – albeit by just 0.5%. NPD and marketing activity were key to staying in the black. Its most successful launch in 2024 was October’s Banana Bread Biscuits for toddlers, which quickly exceeded expectations, says MD Matt Goddard.

“Key trends are also fuelling our success,” he adds. “Parents are increasingly seeking convenient, larger pack formats, leading to higher in-store basket values as they stock up on multipacks.”

Own label is also outperforming brands in nappies, where respective volumes are up 4.7% and down 2.4%. Four of the top five brands have shed units by up to 20.6% – which makes Ninjamas’ 134.2% volume growth even more impressive. The number three player is designed to offer protection from bed-wetting for kids aged four to 12.

“Ninjamas offer convenience and peace of mind for parents, addressing a specific need with a reliable solution,” says NIQ’s Wootton.

He also highlights Kit & Kin’s sustainable nappies, sitting just outside the top five. Up 13.8% by value, they meet a specific need by appealing to environmentally conscious consumers, he adds.

And, happily, there’s nothing controversial about that.

Read more: Baby & infant products 2023: Babyfood’s leading five brands falter