BABY & KIDS – Little people, huge opportunity – the comment from the grocery trader

chaz2Despite the recession, babies and children’s products continue to be a huge and highly profitable market, according to research experts Mintel. Looking at one product category in particular, personal care, the continued growth of the UK’s birth rate has kept the babies’ and children’s toiletries market buoyant, albeit more significantly in volume rather than value terms.

And the long-term outlook is even better. The UK’s child population is forecast to grow by 124,000 by 2014, creating a favourable climate for market growth going forwards. Value sales are expected to hit £430m by 2014 as a result.

The UK baby wipes segment has enjoyed growth of £10m between 2007 and 2009 (6%), owing largely to the fact that usage is gaining frequency among users. The fastest-growing category in baby and child care is baby hair care, with 22% growth over 2007-09, largely thanks to innovation in higher-value salon and organic branded products. The rate of growth in numbers of babies and children’s cosmetics and toiletries exceeds the rate of growth of the UK’s child population. This offers a constant turnover of new products with added benefits to attract new parents.

The move to having children later in life may mean parents are more prosperous and can afford to spend more on products for their children. However, what Mintel calls the sandwich generation may find themselves financially constrained as they take on the costs of raising their children at the same time as supporting their ageing parents.

Mothers facing the financial restraints imposed by statutory maternity pay are more likely to seek out special offers on babies’ and children’s toiletries products. Parents want to buy the best for their baby and in today’s recession-hit economy the best isn’t always the most expensive. Almost nine in ten parents say they will buy the best within budget. In the same vein, special offers are a key purchase motivator for almost two thirds of parents. Not paying the full price for products also encourages parents to feel they are buying the best they can afford.

A rise in value-added products, such as free-from launches, has helped grow average spend per baby/child by 8% between 2006 and 2009 to an estimated £55 per year. However, this could level off as the new generation of older parents start to feel the squeeze between supporting their new family and their ageing parents.

Finally, a rise in the number of free-from beauty and personal care products could see parents switching to cheaper free-from brands that can be used by the entire family and are not child-specific.

The Grocery Trader