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

What is it they say about little ones growing up too fast? The big babyfood brands certainly aren’t keeping up with them. The top five have all taken a hit to volumes over the past year. The category has mustered value growth of just 2% on volumes down 6.1%.

The likes of Hipp Organic, Cow & Gate and Nestlé have all registered double-digit falls in volume as parental price sensitivity takes its toll on sales mix.

“We’re seeing evidence of the discount sector gaining share – a channel where babyfood volumes have increased,” says Matt Goddard, MD at Organix, the second-biggest brand in the category.

The growth in the discounters, which are far less reliant on brands, is fuelling growth in own-label lines. Aldi and Lidl’s numbers aren’t included in NIQ’s data here, but private label sales still look strong. Value has risen 5.8% on volumes up 5.7%.

How big is Little Dish baby food?

Still, it’s worth noting own label still accounts for only 8.7% of babyfood’s value and 15.1% of volumes. It’s brands that dominate the category – and some are well and truly bucking the general decline.

See Little Dish, which has grown volume sales of its chilled meals for kids by 10.1%.They come in 100% recyclable packs – but CEO Dean Brown believes their content is the differentiating factor against bigger brands.

“Packaging innovation may have transformed the category recently, but what’s inside the packs hasn’t really changed for 50 years and that’s coming under increasing scrutiny,” says Brown.

“There’s a flight to quality going on outside the big legacy babyfood brands to products that haven’t been heat-treated to make them shelf stable, and look, smell and taste like real food and are nutritionally superior,” he adds. “Parents are more prepared to make personal sacrifices than make sacrifices for their kids. That’s why we’re proving resilient in this downturn.”

In fact, Little Dish has achieved 19.2% value growth. Not that you’ll find the brand in the data tables of this report. Because its products are stocked in chillers rather than in ambient babycare aisles, it’s classified as a chilled ready meals supplier.

If Little Dish was classed by NIQ as a babyfood brand, it would be the sixth biggest, and its extra £2.2m would be the third greatest absolute gain in the category.

“Our growth is accelerating despite the fact that our prices have gone up,” Brown adds. “This is coming from people buying more, not distribution growth.”

Other brands are similarly growing by playing to their point of difference. Goddard, for instance, attributes Organix’s gains to continued demand for natural products in sustainable packaging.

“Organic continues to be the preferred option for most babyfood shoppers, accounting for more than half of spend on babyfood annually and delivering almost all of the growth in the market,” he says.

More evidence of organic’s popularity can been seen in the performances of Piccolo and Little Freddie. They’ve grown volumes by 41.5% and 51.9% respectively, and are worth an extra £2.5m between them.

Top brands Pampers and Huggies’ sales

The trends in babyfood can also be seen in the other sectors of babycare. In nappies, top brands Pampers and Huggies are losing share to smaller rivals.

Similarly in infant milk formula, the biggest brands are under pressure from premium challengers that trade on sustainability and health credentials. “An honourable mention must go to Kendamil, which emphasises health and sustainability and has seen significant growth,” says NIQ client manager Karl Ruggiero. He points to the brand’s 88.9% growth on units up 139.3%. “However, babymilk continues to be hit hard by inflation.”

Indeed, average price per pack is up 15.2%, and the biggest three names in infant formula are all down in volumes. Danone’s Aptamil and Cow & Gate brands and Nestlé’s SMA have seen a combined 9.8 million fewer packs go through tills.

This is perhaps less shocking when the birth rate is considered. ONS data shows a 3.1% year-on-year fall in live births for 2022 in England and Wales. The 605,479 births recorded was the lowest number since 2002.

“The ongoing decrease in birth rates has naturally resulted in volume declines,” says Claire Brosnan, Danone customer category head. “With Aptamil and Cow & Gate brands being the largest in terms of share, we’re likely to have been disproportionately impacted.

“However, there are other factors that are influencing growth, such as convenience, additional benefits, and the length of time families remain customers by purchasing follow on milks and toddler milks.”

To keep up, Danone is adding new formats. One is a bulk 1.2kg pack of Cow & Gate Follow On Milk, which Brosnan says typically offers a 20% saving per serve versus the core 800g SKU. The brand has also launched a 600g pack aimed at budget-conscious shoppers.

“As this category is heavily impacted by inflation, price is and will be a major factor,” sums up NIQ’s Ruggiero. “Inflation-driven prices are here to stay.”