3A Business Consulting

Global Market for Baby Food (excluding IMF) and dairy proteins

2019-2024

Published in December 2019

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1. Introduction and methodology

2. Baby food market

3. Baby food industry

4. Dairy ingredients used in baby food

5. Report summary

Report outline

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Market Research Approach - baby food markets and dairy proteins used

Baby food excluding IMF

industry

Baby food excluding IMF

market

Dairy ingredientsin baby food

excluding IMF

Summary

• Market development 2014-2018 and forecast 2019-2024

•Key global/regional/local companies• Market shares in key markets

• Estimated volume 2024

• New product development and launches with key ingredients

• Analysis and conclusion

• Estimated volumes for: • SMP• WMP• DWP• WPC/WPI• MPC/MPI• Caseinates/Casein• Galacto-oligosaccharides

•Global markets•Value•Volume•Growth rates

•Regional markets •Western Europe• Eastern Europe•North America•Asia Pacific• Latin America•Middle East & Africa

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The global baby food market is segmented into four major product categories, three of which are covered in this report. The definition of prepared baby food, dried baby food, and “other” baby food are the following:

The prepared baby food market includes products in cans, jars or retort flexible pouches none of which require any cooking preparation other than heating. Pureed food, yoghurts, chilled desserts, soup, desserts, and ice cream marketed for babies are included in this category

The products within the dried baby food market requires the addition of water before consumption, and are mainly sold in packets. Dehydrated soups and cereals are also included

The market for “other” baby food includes any other product marketed for babies such as teething biscuits, baby rusks, baby fruit juices and snacks

Baby food market- Definitions and terminology

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Methodology

• Value and volume figures are mainly sourced from Euromonitor

• Numbers presented throughout the report may not add up precisely to the totals due to rounding

• Global/regional market value figures are based on calculated USD value figures

• All national market values given in national currencies converted from local currency into USD by 3A

• Conversion of currency for all included years into USD done using 2019 fixed exchange rate

• Given this methodology country market values in USD are affected by the 2019-level of local inflation as well as the value of the local currency vis-à-vis the value of the USD

• National market values in USD must therefore be seen as an approximate figure

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Methodology for dairy proteins analysis

Methodology implications:

The database (INNOVA) does not record all launches in baby food, particularly given internet sales.

Products launches within infant formula are excluded. The examples shown are thought to be representative of all product launches.

WPC/WPI

MPC/MPI

Geography:Global and Key Regions

Time Frame:January 2014 –December 2018

Category:Baby food excluding IMF

Ingredients:

SMP

Caseinates/casein

Product example:

DWP WMP

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Western Europe Eastern Europe North America Asia Pacific Latin America Middle East & Africa

USD

Mio

2014

2018

2024

Regional breakdown of prepared baby food market2014, 2018 and 2024(F)

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Prepared baby food value sales 2014, 2018 and 2024(F)

Global CAGR

2014-2018: 5%2018-2024: 6%

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Value distribution - per baby food category excluding IMF

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2014

Total global valueUSD xx,xx Bn

2018

Total global valueUSD xx,xx Bn

2024(F)

Total global valueUSD xx,xx Bn

Source: 3A Business Consulting based on Euromonitor

Prepared baby

food; xx%Dried baby food;

xx%

“Other” baby food;

xx%

Prepared baby

food; xx%Dried baby food;

xx%

“Other” baby food;

xx%

Prepared baby

food; xx%

Dried baby food;

xx%

“Other” baby food;

xx%

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0

50

100

150

200

250

300

350

Western Europe Eastern Europe North America Asia Pacific Latin America Middle East & Africa

‘000 M

T

2014

2018

2024

9

Regional breakdown of dried baby food market2014, 2018 and 2024(F)

Dried baby food volume breakdown 2014, 2018 and 2024(F)

Global CAGR

2014-2018: 2%2018-2024: 2%

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Volume distribution - per baby food category excluding IMF

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2014

Total global volumexxx,xxx MT

2018

Total global volumexxx,xxx MT

2024(F)

Total global volumexxx,xxx MT

Source: 3A Business Consulting based on Euromonitor

Prepared baby

food; xx%

Dried baby food;

xx%

“Other” baby food;

xx%

Prepared baby

food; xx%

Dried baby food;

xx%

“Other” baby food;

xx%

Prepared baby

food; xx%

Dried baby food;

xx%

“Other” baby food;

xx%

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Source: 3A Business Consulting based on Euromonitor

Note: Forecasts are expressed in constant US dollar terms, thus unaffected by local currency fluctuations and exchange rates

Global baby food excluding IMF markets- Outlook towards 2024

Forecasted retail values RSP 2024 and growth per region 2018-2024

North AmericaValue: USD xx,xx mio.

CAGR 18-24: x%

Latin AmericaValue: USD xx,xx mio.

CAGR 18-24: x%

Western EuropeValue: USD xx,xx mio.

CAGR 18-24: x%

Middle East & AfricaValue: USD xx,xx mio.

CAGR 18-24: x%

Eastern EuropeValue: USD xx,xx mio.

CAGR 18-24: x%

Asia-PacificValue: USD xx,xx mio.

CAGR 18-24: x%

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Nestlé- No. 1 globally in baby food excluding IMF

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Note1: ”Nutrition and Health Science” includes baby food. Some products make be placed in the category ”Milk products and Ice cream”Note2: AMS: Americas, EMENA: Europe, Middle East and North Africa, AOA: Asia, Oceania and Sub-Saharan AfricaSource: Nestlé, Euromonitor

• Major Nestlé baby food excluding IMF brands include Nestlé, Cerelac, Gerber, Nestum

• Nestlé has three reportable market segments comprised of AMS, EMENA and AOA2 accounting for 34%, 21% and 23% of net sales in 2018, while residual sales were generated by other businesses

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2016 2017 2018

USD

mio

SALES AND PROFIT

Sales Profit

Powdered and Liquid

Beverages;24%

Water;8%

Milk products and Ice cream;

14%

Nutrition and Health

Science1;18%

Prepared dishes and

cooking aids;13%

Confectionery;9%

PetCare;14%

DIVISION SHARE OF SALES, 2018

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Nestlé- prepared baby food product examples

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Description:

Four trays of organic natural dairy dessert for babies from 6 months. Comes in a cardboard sleeve

Ingredients include:

Fermented milk (88.1%) (organic milk, water, organic skimmed milk powder, thickener (pectin), dairy ferments), water, corn starch, rice starch, organic cream and organic rice semolina

Description:

Fortified 8 cereals for babies from 10 months and older, in a metal tin. Nestum cereal is the ideal complement to your baby's diet, with only 3 tablespoons it contributes part of the nutrients that your baby needs daily

Ingredients include:Wheat flour (53%), sugar, quinoa flour (5%), triticale flour (5%), barley flour (3%), rye flour (3%), corn flour (3%), rice flour (1%), oat flour (1%) calcium carbonate, disodium phosphate, vitamin C (ascorbic acid), ferrous fumarate, zinc sulfate, probiotics (bifidobacterium lactis) (0.1%), vanilla, vitamin E etc.

Source: 3A Business Consulting based on Innova Market Insights

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Total # NPL between JAN 2014 to DEC 2018 = 19,316

Global NPL of baby food excluding IMF per product category- total number of NPL slightly increasing in recent years

Source: 3A Business Consulting based on Innova Market Insights

0

500

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017 2018

# n

ew

pro

duct

launches

Prepared Baby Food Dried Baby Food "Other" Baby Food

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• Given the CAGR on IMF volumes of 2%, DWP demand in baby food excluding IMF can be estimated to grow approx. 7,000 MT per year towards 2024

Dairy proteins volume estimation

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Volume

Proteincontent (avg. 11%)

% whey

Wheyprotein

DWP share

DWP (100%protein)

DWP (13% protein)

SMP 620,000 MT 68,200 MT 60% 40,900 MT 60% 24,500 MT 188,500 MT

WMP 540,000 MT 59,400 MT 60% 35,600 MT 50% 17,800 MT 136,900 MT

DWP 1,290,000 MT

141,900 MT 20% 28,400 MT 10% 2,800 MT 21,500 MT

WPC/WPI 130,000 MT 14,300 MT 50% 7,200 MT 10% 700 MT 5,400 MT

MPC/MPI

Caseinates/Casein

Total 2,580,000 283,800 MT 112,100 MT 45,800 MT 352,300 MT

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Global Market for Baby Food- Project Management and Costs

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- Managing Partner – Tage Affertsholt

- Junior Consultant – Andreas Watson

Team

Time

Cost

Report available in PDF format – in total more than 100 slides – from December 2019

EUR 3,600