Challenging, fast-moving and competitive. So far, so normal.
But the infant care market can't be compared to any other sector of the grocery retail scene: every day there are new consumers; and every day a customer drops out.
On the one hand, this is a marketing nightmare; on the other, you have a captive audience, and with millions of increasingly well-informed mums out there worrying neurotically about the health of their newborns, as we've observed in previous reports on this category, organic and premium-priced babyfood has defied the wider market in terms of its resilience.
Overall levels of innovation remain impressively high. Whether it's the giant Procter & Gamble unveiling its 'Dry Max' nappy technology (see innovation box, p51), the entry of small niche producers with world-leading innovation in the wipes sector, or Little Dish introducing pouches of bang on trend fresh ready meals for four-month-old babies, the baby aisle is a hive of inspiration and ideas.
And while the recession has influenced promotion (see p48) and advertising (p53), the same forces that were driving babyfood innovation pre-2008 convenience, premiumisation and health remain to the fore.
Although the 5% increase in both value and volume can partly be explained by a slight rise in the birth rate, skilful opportunity-led innovation is, unquestionably, playing a major part in the babyfood category's evolution in particular, as manufacturers have cleverly identified how to increase their offering beyond the 12-month stage.
The lifespan of the sub-categories within infant care varies considerably: the longest is nappies and other toiletries, followed by milk. The window of opportunity in food and snacks can be as little as six months, says Jodi Reddell, senior brand manager at Heinz Infant Feeding.
With babyfood volumes up 4.2% and value up 10.9%, it's clear that both premiumisation and category-based expansion are at play. But it's baby milk that provides the most significant example of an expanding lifecycle.
Milk is neither as diverse nor as dynamic, innovation-wise, as babyfood, but its achievement is phenomenal. Despite the Department of Health's continued promotion of breastfeeding, baby milk has once again recorded impressive sales gains: value sales were up 16.9% and volume sales up 15.2% year-on-year. And it may even provide a window into the future for the infant category as a whole.
Traditionally, baby milk has been a limited-usage product, with mothers switching their children to cows milk at a relatively early age. But producers came up with follow-on and toddler milk aimed at extending the lifespan of baby milk. Cow & Gate and Aptamil follow-on products have been particularly successful, with sales of Cow & Gate's Growing Up milk up 21.5% year-on-year (following an 83.2% increase in 2009).
Why is this market growing? One explanation is increased marketing spend. While manufacturers are prevented by law from advertising first-stage formula milk, no such restrictions apply to toddler milk. It's an opportunity they have grabbed with both hands.
But the fact that ad spend has doubled in the past year also reflects a response to "an uncertainty about the UK diet fulfilling the nutritional needs of early toddlers and beyond", says SMA nutrition manager Anne Sidnell.
The government recommends babies move to cows milk from 12 months (these guidelines were drawn up before the introduction of toddler milk), but manufacturers point to studies in France suggesting a positive association between higher consumption of infant milk and optimal nutrition. As a result, manufacturers in France have been more successful in keeping mums buying longer from the infant care aisle than in the UK.
Not surprisingly, at 573m, the babyfood market in France is more than double the size of that in the UK [Nielsen 52w/e 12 June 2010].
Understandably, baby milk manufacturers have been keen to exploit this uncertainty. Sometimes too keen: in September 2010, a Cow & Gate ad was banned (see boxout, p55).
Undeterred the ads are back on TV, making modified claims Cow & Gate is hoping to use its insights across the infant care category to increase sales of the babyfood category as a whole, a strategy likely to win plenty of brownie points with multiple retailers.
"Research in France and the UK shows a higher consumption of babyfood in France, from first weaning right through to 24 months. At seven to nine months, 31% of UK babies, compared with 60% of French babies, are eating from the baby aisle," says Jeff Rothman, marketing controller for Danone baby nutrition UK.
"This drops to 1% at 22-24 months in the UK, while in France 10% are still buying. Our aim is to multiply the size of the UK market by 250% within 10 years," he adds.
Danone is keen to convince mothers of the need for food to meet babies' particular nutritional needs. To this end, its Cow & Gate brand is launching Sunny Start (see p53), a new cereal bearing more than a passing resemblance to Weetabix, but without added salt and sugar.
"We are planning to 'carefully' roll out further products while undergoing a re-evaluation of current lines. There will be significant investment, starting in 2011, designed to help drive category growth," says Rothman.
Danone is also rebranding the entire Cow & Gate range, with a new design aimed at delivering one clear brand message across food and milk. The move is intended not only to sell more Cow & Gate products, but also to "change attitudes and develop the UK market to its full potential".
Cow & Gate is not the only player looking to rebrand, however. Heinz, which claims to be the biggest company in babyfood [Nielsen w/e 30 October 2010] will redesign its entire portfolio in 2011. NPD will include 13 new Taste of Home pots, which launched this month (The Grocer, 11 December, p27).
Of course, spurring the babyfood giants into action has also been a new generation of small niche companies such as Ella, Plum, Annabel Karmel and Little Dish, along with Peter Rabbit Organics, as well as the growth of older but distinctive brands like Organix and Hipp.
Niche players have helped bring about new convenience formats (plastic pots with resealable lids and pouches); new adult and sophisticated flavours from Chicken Masala to aubergine, red peppers, mango, blueberries and bacon; and even fresh ready-to-cook meals from Little Dish and Annabel Karmel, as well as frozen foods from Babylicious.
Some of these niche players have truly come of age: Ella's Kitchen experienced another phenomenal year, with sales up 73.5% in 2010, on the back of stellar growth in 2009.Having started 2010 with 26 products and six ranges, at year-end there were 11 ranges with a total of 46 products.
Impressively, there has also been a concerted focus on developing the global market, which now represents 40% of Ella's turnover.
"It's our goal to make Ella's into the first global premium food brand for little people," says chief executive officer Paul Lindley. "Every second of every day someone around the world is consuming an Ella's Kitchen product."
It's staggering to think Ella's Kitchen only launched five years ago this month. The brand marked its progress by winning the coveted Food and Drink Brand of the Year award at The Grocer Gold Awards ceremony in June 2010, beating off competition not just from the giants of the babyfood aisle, but the likes of Warburtons, Coca-Cola and Walkers.
What's in-store in 2011? Ella's promises more new products, kicking off with four in January, followed by more convenience products later in the year. A new pack design is also on the cards.
Fresh ready-made meals are also worth keeping an eye on. Little Dish enjoyed growth of 80% in 2010, following on from an uplift of 45% in 2009, claims co-founder and managing director Hillary Graves.
"Part of our challenge has been to create awareness of a whole new place to shop for kids' meals. This has really gained momentum in 2010, and the results speak for themselves. In 2011 we are continuing to work closely with retailers to bring mothers to the chilled aisle and plan two new launches in March. We are also taking a look at formats and portion sizes."
The other well-established niche organic brand, Plum, has seen steady growth in 2010, up 6.9%.
With a private equity-backed buyout in May 2010, CEO Paul Kaye says the brand has big plans for 2011. "The entire Plum range will be having a makeover, with new branding and packaging designed to simplify messages about weaning."
And, he adds: "There is more new product development planned in 2011 in the wet food sector new formats, new recipes and ingredients as well as innovations in dairy and time-specific meals."
And this year marks yet another new development in the market, with Aldo Zilli becoming the first celebrity chef to launch an infant care babyfood range (see Innovations box, right).
In the meantime, Hipp the largest organic player in the market has been under pressure from competitors, seeing most of its ranges declining year-on-year. A new stage 3 pot is promised for 2011, as well as a design makeover.
The snacks market continues to perform well, increasing by 12.6% in value and 9.9% in volume [Kantar]. The star performer remains Organix, whose Goodies range, which includes gingerbread men and cheese herb puffs, accounts for more than half the value in snacks. Organix as a whole accounted for half the category growth.
The market is becoming more varied, too snacks now include rice cakes, fruit snacks, cereal bars, sweet and savoury biscuits, bread sticks and rusks.
With new players entering the snack sector, however, including the likes of Ella's Kitchen and Plum, Organix may not get it all its own way in the future.
But the brand is planning to promote its snacks through a £1.5m print and online ad campaign, its largest-ever, says Organix managing director Anna Rosier. "The aim of the campaign, the biggest of its kind, is to drive category growth by increasing penetration for the 12-month plus group, to keep mums in the baby snack aisle longer."
So what of the future? It certainly looks exciting. There's clearly an appetite among consumers and retailers for the innovation that's been launched in the market.
As well as momentum, there's evidence to suggest there is plenty of untapped potential. But the market is not without its challenges. Both category giants and niche players are plugging the gaps in their ranges, and with so many companies launching new size variants, multibuy packs, new flavour variations and new ranges and lines into areas where they were not previously represented, there's a danger product overlap might result in deterioration in sales and profits, and with it, consolidation.
The other challenge is the limitations on space within the baby aisle. Buyers at the major multiple retailers must get their ranges right, find space for new products, offer range choice and keep the momentum going.
But promotion and discounts may become more important, particularly in babyfood, as competition mounts. Will this have a knock-on effect on sales growth for 2011?
Will this inhibit innovation in the sector? Let's hope not. Or to put it another way: vive la France!
Focus On Infant Care