Small goes big: the baby food industry

The business feeding the smallest among us has developed into a multibillion dollar industry in recent years. Due to increasing numbers of working women, growing parental concerns about nutrition and modern-day time constraints, industry-processed baby food plays an ever more significant role in meeting the nutritional demands of infants and toddlers worldwide.

According to figures by market research and consulting company MarketsandMarkets (M&M), baby food generated revenue of $25bn in 2008 and is expected to grow to $37.6bn by 2014.

While the US and Europe still account for a major revenue share, developing economies such as China, Vietnam and India provide fast-growing markets for industry-processed infant food.

Although hygiene and safety regulations are often stricter in the baby nutrition sector, new products and technologies, as well as the changing profile of its end-customers towards the adult market, forecast a bright future for companies specialising in baby food.

Professionally designed foods fill the kitchen shelves of parents, in various flavours in liquid and solid forms for customers from as young as six months to two years, with hardly any other sector predicted to experience a similar boost in the years ahead.

Strict safety and market regulations

Focusing on the development of easily digestible and competitive food products such as baby cereals, bottled baby foods, frozen baby foods, baby snacks and soups, the opportunities of specialised food companies are plentiful.

The untapped markets in developing countries such as Asia require the expansion to new corners of the world and evolving food technologies, new flavours and textures to progressively increase sales.

However, baby food companies have to face a number of challenges as low birth rates, static market conditions in developed countries, advertorial and marketing constraints, and milk intolerance in babies go hand in hand with the growing responsibility regarding food safety, cleanliness and nutritional value of the food.

“We do more than 260 tests on each product to ensure that they meet all legislation for baby foods,” says Hipp Organic Baby Foods – a UK-based subsidiary of the world’s largest baby food manufacturer Hipp – head of marketing Jane Mayall. “There is specific legislation and the nutritional values of certain products, for example baby milks, are strictly controlled within narrow parameters.”

In Europe, the 2006 European Commission ‘foods for infants & young children – cereals and other baby foods’ directive regulates the big and small players on the market, setting guidelines for companies operating in its member states.

The directive does not only set out rules on the composition and labelling of baby foods but also gives minimum and maximum levels for protein, carbohydrates, fat, mineral substances, vitamins and other nutrients.

In particular, the use of pesticides in particular is strictly confined and the Commission has set out specific rules on the presence of pesticide residues in infant nutrition, constraining any detectable levels of pesticides and prohibiting the use of very toxic agents in the production of baby foods. Moreover, the directive also regulates specific requirements on the use of food additives, the presence of contaminants in the products and hygiene guidelines.

In the US, similar legislation by the US Food and Drug Administration’s (FDA’s) Center for Food Safety and Applied Nutrition, ensures the manufacturing of baby food within allowed constraints.

Only the combination of high-quality products, vigorous product testing in cooperation with parents and the fulfilment of any regulation brings long-term success, says Mayall.

“In addition to the regulation, we have our own values that each product must meet, which are far stronger than the legislation,” she explains. Only then, the demands of infants and parents can be met and companies are able to cope with the nutritional responsibility of their food.

Improving baby food – better flavour, better texture

The opportunity to evolve in new and different directions does not only come from new markets in countries such as China and India, but also the products themselves leave space for improvement.

Baby foods could be more nutritious to meet the needs of the infants and toddlers, says UK-based dietician and child nutritionist Judy More.

“The companies need to produce their products towards a certain price margin because clients only pay a certain amount for baby food. I think they tend to minimise the nutritional quality to keep the price down,” she says.

Also the nutritional standards, as set by the European Commission and other state-specific legislation, influence the nutritional quality of the food. “The European standards define the nutritional adequacy of the food so food companies have to comply with that,” says More.

However, some of the standards are slightly too low to fully meet the needs of babies and toddlers.

“Once babies start eating, it is because the breast milk can’t supply all the nutrients they need in their diet. One of the key nutrients for developing babies is iron. The baby food regulations have a minimum regulation for meat, the best source of iron.”

“If companies are selling baby food with meat they have to put at least 8%-10% in, depending on how the food is labelled,” continues More.

“It’s only a small amount and in actual fact babies get a lower amount of iron in their food these days as regulations for organic food don’t allow fortification with extra iron, while previously non-organic foods were all fortified with extra iron.”

Another area of improvement is the flavour and textures of the products. “The problem with baby food is that they tend to be quite bland,” says More. “They don’t tend to give a great variety of flavours and the textures are always similar.”

When babies start eating food, they are also developing their feeding skills. Offering them different types of food encourages them to like various flavours and textures. Strict regulations regarding the hygiene and safety of the products, however, makes it difficult for companies to produce food that tastes like family food rather than processed industry nutrition.

“The way food companies have to treat the food in order to make it safe and sterile makes it difficult for them as the processing changes the flavour,” explains More. “Some companies are trying to change their textures and flavours towards more family-style food but it’s very difficult.”

New end-markets and customers

Today, commercial baby food does not only play a significant role in well-developed countries but is often a humanitarian relief item in times of natural disasters and crises.

Although many aid organisations and activist groups, such as the UK Breastfeeding Lobby Group, warn that infant formula can discourage breastfeeding and local water supplies may be contaminated after disasters, sealed baby food is the best alternative to solid foods for babies from the age of six months. “Baby food in times of crisis has certainly the benefit of being safe and hygienically prepared,” says Judy More.

Distribution and feeding, however, has to be in the hands of aid organisations and caretakers. In 2004, the WHO released the ‘Guiding principles for feeding infants and young children during emergencies’, warning of malnutrition caused by wrong distribution of processed infant food, and setting high quality and safety standards for the food provided to avoid malnutrition and illnesses.

Elsewhere, market data has revealed companies might have to change their track as more and more adults cannot withstand the temptation to open a jar of baby food. The world’s largest baby food manufacturer Hipp announced in 2010 the company was increasingly turning its attention to the adult market as Europe’s population ages.

About one quarter of those who eat Hipp’s pulped meals are adults, with growing popularity among people whose ability to swallow had been greatly reduced through old age, dementia or a stroke, as well as mothers who try to lose weight after giving birth. The meals, which are low in fat, sugar and salt, are an attractive alternative for calorie-conscious mothers.

“As our society gets ever older, baby food is showing that it has a future in the adult market,” said company President Claus Hipp as at a company birthday celebration in March 2010. “Older people can often cope with the mashed baby food better than regular meals, but we’re not planning to change our advertising to target them … we want to keep our baby image.”