Published last month, the report on baby foods and drinks revealed a market hit by higher Hispanic population rates, an increased tendency to feed kids table foods at an earlier age, and concerns about obesity and tooth decay.
However, the consumer researcher said there is room for the market to grow, especially through foods targeting the toddler age group. And top priorities for mothers are set to center around convenience, low sugar, all natural and fortification.
According to Mintel, the US market for baby food and drink sales in food and drug outlets excluding Wal-Mart reached $3.5bn in 2006. And with Wal-Mart in the picture, this figure is estimated to be set at $4.8bn, as the chain accounts for around a quarter of category sales.
Although these market figures represent a slight increase of 1 percent in current terms, they correspond to an 11 percent decline in constant terms.
And in a market ultimately confined by the number of children aged three and under in the US, the growth of the Hispanic population has not helped the category. This is because Hispanic mothers are more likely to breastfeed their babies than the US average, and in 2004, births to Hispanic moms accounted for 23 percent of all births.
"It is extremely important for players in the category to find ways to connect with Hispanic households," said the report.
But all mothers who opt to purchase infant foods are paying increasing attention to medical research regarding breastfeeding versus infant formulas, and are also more likely than before to use medical professionals for advice on baby nutrition.
For this reason, fortification has become a key priority for most mothers, with 71 percent of moms surveyed by Mintel saying that they would use products fortified with vitamins especially for toddlers.
And 61 percent of moms surveyed said that an 'all natural' claim is "very important" when selecting products for under three year olds.
Indeed, concerns about infant obesity and tooth decay have altered the baby food and drink selections of many mothers. For example, sales of baby juice - which has been linked to overweight and tooth decay - have been declining since 2004, currently standing at $88m, or 6 percent lower than two years ago.
Convenience also remains a major priority for mothers, with almost half of those surveyed saying that they would opt for toddler foods because these are convenient to prepare for kids. And 60 percent of moms said they are in favor of these products because they are easy for the children to hold or eat.
In fact, according to the report, sales data by brand shows that toddler foods are succeeding at the expense of the products based on pureed foods.
"It is very likely that moms are moving kids from the pureed foods to the table foods as soon as possible. Surely, these moms are motivated by the desire for the child to learn new and important table skills and tastes. But, also, it is important to note that more autonomy for baby means more ease for mommy," said Mintel.
Many manufacturers are already focusing on toddler foods in order to lengthen the duration for which moms for baby products. And according to Mintel, to date, this has been successful. The majority (77 percent) of moms surveyed by Mintel use or plan to use specially made 'toddler foods' in some way when feeding their toddler. Among this group, 14 percent say they do or plan to use only toddler foods, opting not to give any 'adult foods' to toddlers.
For the infant market, power formula sales and ready-to-drink formula sales in FDM channels increased slightly from 2004-2006. However, this was at the expense of liquid concentrate, which showed sales declines of 27.5 percent. The powder formula sector has benefited from the launch of products that include a blend of the nutrients DHA and ARA and others that address some digestive problems in babies.
From 2001-06 in FDM channels, baby food sales dropped 12 percent in constant terms, excluding Wal-Mart. Growth in toddler and first finger foods was evident, but potentially at the expense of '2nd foods', said Mintel. And according to its research findings, parents may be trading pureed baby foods for finger foods or toddler products to begin the transition to adult foods more quickly.
The market for infant and toddler foods and drinks is currently led by Mead Johnson, which holds an estimated 35 percent of the market, led by its formula brand Enfamil. Ross Products accounts for 29 percent of the market, although its sales declined almost 9 percent from 2004-2006. Gerber dominates the baby food segment and generates 20 percent of market sales.
According to Mintel's forecasts, FDM sales will grow to $3.6bn by 2011. This figure represents an increase of 1 percent over 2006 in current terms but a decline of 15 percent in constant terms.
The category is expected to continue to be challenged by the modest increases in number of births each year and the decline in number of women in their prime childbearing years. However, good news for the industry is the fact that birth rates for women over 35 are increasing, meaning more moms with higher levels of discretionary income. This could fuel the market for premium baby products, said the report.
Mintel also expects to see baby weight control used as a more direct marketing platform in the baby food and drink market within the next five years.