Kids’ Food Market Shows Huge Promise

The baby food market has impressive potential to grow in India. Our country's huge infant population, growing urbanisation,  and significant numbers of working women have all contributed to the impressive demand for baby food in the country, during the recent years. In fact, the market for baby food across the globe is huge.

Both the baby food and the children’s food markets have shown a continuous upward graph, thus making enterprising entrepreneurs eye the lucrative area avidly. Ashok Malkani takes a look at the expanding baby food and children’s food markets and also at the factors that must be taken into account by players aspiring to make their venture a success in these sensitive markets.

Turn on the TV and one finds several ads directed at kids. A ketchup ad shows a field full of ripe tomatoes and the mother pouring ketchup from the bottle with the comment, “100% natural” while her daughter licks the sauce saying “yumm, tasty”. Yes, children are becoming the target audience for a great many foodstuffs as the manufacturers believe that children influence parents into buying their (manufacturers’) products.   

The food and beverage industry of India has, during the recent years, correctly perceived   children and adolescents as an important market force. As a result, children are now the target of focused and specialised food marketing and advertising endeavours through the industry.

Today, food and beverage industries are spending billions of rupees on marketing and advertising their products to children. Studies estimate that children between the ages of 6 and 11 spend an average of 28 hours a week watching television. The manufacturers of even milk-based baby food products have directed their attention not only to mothers but also to children. It is estimated that advertisers of food products did spent Rs. 57,486 crore during 2016, in India.

The market potential for babies’ food and children’s food is immense. The growth of working female population and increased urbanisation has resulted in mothers shifting attention from breast milk to alternative healthy and nutritional baby food products.

The Thriving Market of Baby Food

According to a report by TechSci Research titled Global Baby Food Market By Product Type, By Point of Sale, By Age, By Region, Competition Forecast and Opportunities, 2012 – 2022, which was published in March 2017, the global baby food market is forecast to surpass 82 billion USD by 2022. In 2016, milk formula segment garnered the largest market share in the global baby food market, and this trend is anticipated to continue during the forecast period. Moreover, in 2016, Asia-Pacific dominated global baby food market, followed by Europe, North America, Middle-East & Africa, and South America. 

According to a Research and Markets report on Indian Baby Food Market, the Indian baby food market will grow at a CAGR of over 15 percent till 2017. The report adds that compared to other developing countries in Asia, the baby food market in India is small. It goes on to add that the market is dominated by unorganised sector and a large segment of this market comprises of non-organic baby food. There is, thus, ample scope for new players to come in with organic baby food in the country.

In the recent past, Ken Research stated that the baby food market in India was witnessing rapid growth and was growing by 10-12 percent a year. The large population of infants in India, the huge numbers of working women in post-modern India along with rising health consciousness in the urban Indian society have perhaps together contributed to the impressive growth of this market.

Ankur Gupta, Head Marketing and Communications, Ken Research, has declared that rapid urbanisation, growing population, increasing disposable income has led to the fast-paced growth in this industry.

The rising sale of baby food is not just an Indian phenomenon, but it is a global happening as is witnessed from the table below:

According to Euromonitor International, the biggest markets of baby food sales are China, the EU and the US, accounting for about 60 percent of the total. India is, at present, a small market. The chances for its growth are, therefore, immense.

Major Players

For those who are keen to enter the baby food market in India, it may be added that the major baby food industry players in the country, at present, in alphabetic order include:

• Abbot Nutrition

• Amul

• Heinz

• Mead Johnson Nutrition (India) Pvt. Ltd.

• Nestle India Ltd.

• Nutricia International Pvt. Ltd.

• Raptakos, Brett & Co. Ltd.

The milk-based baby food segment is expected to continue to dominate the Indian baby food market as it is considered to be the most convenient alternative to mother’s milk. That is probably the reason why, in the baby foods section, milk-based baby food has outperformed cereals in volume terms.

The companies are keen to reach out to a vast segment of parents and children and are thus providing the consumers with a variety of options. Nestle has come up with numerous flavours; both wheat-based (Cerelac) and rice-based (Nestum). Several companies have segmented their products on the basis of age and need. Lactogen and Nan from Nestle, or Mama’s Best from Abbott Nutrition, are targeted at new-born as a substitute for breast milk, while Cerelac and Farex are supplements for children of six months and above. Further, Cerelac is segmented into types for infants from six months to a year, and also for one-year-olds, two-year-olds, three-year-olds, and so on.

In the segment of baby food it may be mentioned for the sake of new entrepreneurs that the emphasis is now being laid on developing more organic food which includes more ingredients that will provide high nutrition to babies. This is in response to an increasing awareness among parents of the necessity for nutritional food for their infants. Parents all over the globe are laying stress on organic food for their babies as they believe that it is more nutritious.

Packaging Issues

The rising sales of baby food products have encouraged the companies to take up new state-of-the-art packaging techniques to ensure that the products reaching the shelves are safe. The packaging is an essential feature as kids’ food squeezables, which are popular in the US and other places, and are making their way into the Indian market, have been found to have packaging that has raised safety concerns among parents. Usually brightly coloured with chunky graphics, these squeezables deliver delicious snacks of fruit, vegetables and yogurts.

The squeezable food pouches, which are marketed as delights of the 21st century childhood, have had the dubious distinction of being recalled in the US, at the instance of Food & Drug Administration, on several occasions. Once it was because of damage to spouts during manufacturing that could make small pieces break off and become a choking hazard. On another, it was because of manufacturing defect that could cause spoilage.

On yet another occasion, a Canada-based company recalled a batch of apple and carrot baby food pouches, due to potential Clostridium botulinum contamination, which can cause sometimes life-threatening botulism. At one time, the pouches were called back as there was a possibility of swelling and leaking, giving rise to growth of bacteria.

Defective packaging has proved to be a bane for baby food manufacturers and thus investment in research for innovative packaging methods and materials is one of the necessities for the baby food manufacturers.

Besides the quality of packaging, its nutritional content, value for money, other factors which could positively influence the market for a baby food manufacturer in India include the variety of flavours offered by him/her, responsiveness of the babies to the taste of the manufacturer’s baby food product, promotion of the product, etc.    

Diet for Children

However, nutrition is of great importance not only in infants’ baby feed products but in food for children of all ages. The market for children’s food is also showing huge potential in the country, and in this buoyant market children themselves are often the influencers towards purchasing of the products.

And while parents have their way in purchasing food for infants, in the case of children who have passed their infancy, they often induce the parents into purchasing stuff that they have seen in advertisements. That is, as stated earlier, often the reason why advertisements for children’s food are often directed at children.

Take the case of a TV advertisement where the camera pans in on several children having wide smiles on their faces, with the teacher, played by a famous Bollywood actress, sitting in the middle. The scene is a remote picturesque setting. And all are munching happily on Domino’s Pizza.

This advert is typical of the marketing bombardment now filling TV screens and billboards in India The world’s big brands like McDonald’s, Dunkin’ Donuts, Subway, Pizza Hut, KFC, Coca-Cola, PepsiCo, et al aggressively tout their wares with the help of children. One can truly say that television commercials are influencing children’s eating habits.

According to a recent study, at least 54 percent Indian children watching commercials opted to buy fast food. Ironically, despite knowing that this habit could lead to health problems such as obesity and early onset of diabetes, neither the children were ready to change their habits, nor were their parents effectively intervening to curb them.

The study, conducted by the Diabetes Foundation of India, states that children found eating fast food “in” and “fashionable” while their parents claimed that children “just don’t listen”.

It is a known fact that for children, who do not always understand the health consequences of their eating habits, junk food may appear especially appetising. But parents who have been advised by dietitians are aware of the fact that regular consumption of fattening junk food by children can lead to complications like obesity, chronic illness, low self-esteem and even depression, as well as affecting how they perform in school and extracurricular activities.

It is always advisable for the new entrepreneurs entering the India’s growing children’s food market to introduce not only tasty but also nutritious fare.

But junk food is not the only malaise. Dr. Suvarna Pathak, Dietitian Coordinator at Nanavati Super Speciality Hospital, Mumbai, stated that parents were found to go easy on children’s diet. Her contention is that the children’s diet in urban India nowadays comprises of processed food like biscuits, sandwiches, noodles (both refined and fried), candies and chocolates. Excess of refined food and trans-fats in children's diet harms their physical development at an early age. She affirms that these days many children do not get proper vitamins and important nutritional constituents. This is also the reason there is an increase in cases of gastrointestinal problems and other gut-related issues among children in India, these days.

For those entrepreneurs who are keen to cater to children by offering them food that is not only delectable to taste but also provide them with a well-balanced nutritional diet, thus serving the dual purpose of pleasing both the children as well as the parents, one may disclose that dietitians are of the opinion that such food must contain nutritional components like calcium, protein, iron and vitamins in healthy dosages. 

Essential Nutritional Elements

So even if you want to venture into fast food but are planning to target children and befriend their parents it is necessary that you ensure presence of nutritional elements in adequate dosages in your food, for their healthy growth.  So what are the essential nutritional elements for children?

Protein is one of them. Proteins are essential for a number of important functions including growth, brain development and healthy bones. Of the 20 amino acids – or building blocks that make proteins, children need to get 9 ‘essential amino acids’ from their food.

Children also need carbohydrates. They are vital for active brains and growing muscles. All carbohydrates provide calories; however, the best carbohydrate choices also provide vitamins, minerals and fiber.

While children require some fat to grow and develop, too much of any sort of fat is not healthy for their growth. Butter, spreads and oils not only play important roles in the taste and texture of the food but they are important as concentrated sources of energy for young children who are growing rapidly and are physically very active. Fats are also needed to facilitate the absorption of certain vitamins including vitamins A, D, E and K. Some fats are essential in a child's diet for a healthy immune system and for normal brain function. These are omega-3 fats.

Vitamin D is essential for promoting calcium absorption in the digestive system and maintaining adequate blood levels of calcium and phosphorus, which allows for normal bone mineralisation. Without sufficient vitamin D, bones can become thin and brittle.

Calcium, potassium and fibre in right dosage also help in developing healthy children.

Calcium is the most abundant mineral in the body, and it is essential to build strong bones, teeth, and muscle. About 99 percent of the body’s calcium is found in bones and teeth, where it is essential for their formation and maintenance. 

Potassium is a mineral that helps maintain water balance in the body’s cells. Water balance is important as it moves body fluids necessary for circulating blood throughout the body, helping kidneys remove waste from the body, and assisting nerve transactions that move muscles and cells.

Fibre plays an important role in supporting a healthy digestive system, and it helps keep the body's system clean and running smoothly. Plus, when combined with ample fluid intake, fibre helps move food through the digestive system and helps reduce the risk of constipation and other digestive disorders.

If your food contains these nutritional elements in right dosages you could stress this fact in your advertisements. If the food is not only tasty but also contains some of these elements then a new entrepreneur, or an established one for that matter, would find that the food is appreciated not only by children but also by their parents. The children would gobble up the food if it is tasty and the parents would appreciate it if it contains nutritional elements.

So why not cater to both their sensibilities? Do that and you can be rest assured that you are on the path of business success.  Remember the saying: We are what we eat? For the food business, especially for the kids’ food business, whether the kids belong to infancy or are on the verge of adolescence, there should be a new phrase: We are what we serve. If your food is delicious and nutritious at the same time, your chances of succeeding in the baby food business and children’s food business in today’s increasingly health conscious India, is quite bright.

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