Organic Baby Food Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Organic Baby Food Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The organic baby food market was valued at USD 3,609.64 million in 2020, and it is projected to register an estimated CAGR of 12.23% during the forecast period, 2022-2027.

Health crises and food scare had a long-term impact on consumer demand during the COVID-19 pandemic. Initially, there was a sales spike, as consumers feared food safety, and personal health drove product purchases. The cumulative import of infant milk powder from January-March 2020 was around 4,30,000 metric ton, which declined by 5.4% compared to 2019, as stated by China custom's data. The increasing sale of infant food products in China via mum-and-baby-store's food for special medical purposes created momentum for premium and organic baby food in the region, with Feihe's sales growth of high-end infant formula series, including Organic Zhizhi, by 16.99% (Y-o-Y) in 2020. In contrast, its regular counterpart sales declined by 25.94%.

The market is driven by the growing awareness among consumers to limit the baby's exposure to the harmful chemicals used in conventional food production and the awareness of the benefits of organic products. Additionally, the rise in the population of working women worldwide largely contributed to the increased size of the prepared organic baby food sector, making it one of the significant growing segments.​

The market is driven by the trend toward clean-label products and cleaner diets. Consumers worldwide are increasingly reaching for fresher and healthier food options for themselves, and they are also demanding the same for their children.

The popularity of organic baby food is growing, with dedicated aisles for the category. With the increased disposable income, parents can compensate for homemade food with branded organic baby food, posing a great driving factor in the forecast period in both developed and developing countries. Thus, there are increasing investments in the organic baby food sector. For instance, in 2021, Neptune Wellness Solutions acquired a 50.1% share in Sprout Foods plant-based baby food company. The consideration includes a USD 6 million cash payment and the issuance of approximately 6.7 million in Neptune common shares, with a value of USD 12 million. The company registered annual net revenues of USD 28 million. Moreover, baby food startups are now differentiating their brands based on specific health goals, from better digestion to brain development, baby-led weaning, and allergy prevention. For example, NurturMe, a portfolio company of Advantage Capital, was acquired by Grays Peak Capital. NurturMe provides baby food and children's snacks that emphasize healthy digestion.

Organic packaged food consumption was valued at USD 11.8 million in 2018, with a growth rate of 51.28%, as stated by United States Department of Agriculture (USDA), creating a tailwind for India's organic baby food market. The relaxation of China’s one-child policy may also bring a positive impact on pre-packaged baby foods. The potential of increasing wealth and rising number of newborns give China’s baby food and drink manufacturers adequate stimulus to develop packaged organic food products to cater to the consumer demand for better quality organic baby food and drink. According to the Global Organic Trade, the market size for organic package food and beverage in Japan was around USD 597.4 million, with a per capita of USD 4.71, coupled with the rising frequency of use of pre-cooked foods per baby, impacting the market growth.

In the organic baby food market, companies are focused on developing new marketing strategies and introducing new products based on value-added ingredients to compete in the market. A few major companies in the organic baby food market are Abbott Laboratories, Nestle SA, The Hein Celestial Group, and Danone SA. There is a wide range of private-label brands, particularly the supermarket/hypermarket chains in the developed markets and traditional grocery stores/convenience stores/specialty retail stores/health stores in the developing economies.​

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