Summary
The Baby Food Sector in South Africa, 2019
Summary
The retail sales for baby food in South Africa stood at R5.4 billion (US$407 million) in 2018, up 66% on 2012. The sector remained vibrant up to 2016, despite a poor economic climate, but has recently been adversely affected by lower birth numbers and a continuing sluggish economy. However, all categories, aside from baby drinks, have expanded in real terms over this period. Consumption per baby aged 0-3 years stood at 12.7kg in 2018, but because only a proportion of mothers are in a financial position to purchase baby food, per capita figures underestimate the average amount of baby food consumed by the babies that do eat it.
The highest growth rate over the period 2012 to 2018 was registered by wet meals, where retail sales doubled and volume sales rose by 12%.The category has been able to maintain stable volume sales thanks to the appearance of new products, principally pouches, which have worked to balance the adverse swing caused by a trend towards home-prepared meals.
The cereals category has also shown above-average growth, whereas drinks are in decline. Milks, however, remains the dominant product group, accounting for 69% of retail sales and 52% of volume in 2018.
There is significant domestic production, with market leader Nestlé producing both its milks and cereals in the country.Other local producers include Tiger Brands, Aspen, and Rhodes Food Group.
Imports have fallen considerably in recent years, from a recent high of over 5,000 tons in 2012 to 1,425 tons in 2017. The largest supplier of milks over the past few years has consistently been Germany.
Nestlé, despite losing share, has been the most important supplier throughout this period, accounting for 52.5% of total market value in 2018. Tiger Brands (Purity) is in second place with 21%, while Aspen (which sold its business to Lactalis in late 2018) has been strengthening its position, gaining a share of 19%. Other players include Abbott and companies offering organic or “healthier” food, including Allganix (Olli’s), Hipp, Rhodes (Squish), and Woolworths.
Baby food is distributed through a variety of outlets in South Africa and there are no restrictions on its sale.Supermarkets are the main source of supply, accounting for over half of volumes, while hypermarkets are growing in importance.
Pharmacies are also a significant point of distribution, especially in the milks and cereals categories, and specialist baby stores are becoming more popular.
"The Baby Food Sector in South Africa, 2019", is an analytical report which provides extensive and highly detailed current and future market trends in the South African market.
The report offers -
- Consumption data based upon a unique combination of industry research, fieldwork, market sizing work and our in-house expertise to offer extensive data about the trends and dynamics affecting the industry
- Detailed profile of the companies operating and new companies considering entry in the industry along with their key focus product sectors
- Market profile of the various product sectors with the key features & developments, segmentation, per capita trends and the various manufacturers & brands
- Overview of baby food retailing with a mention of the major retailers in the country along with the distribution channel
- Future projections considering various trends which are likely to affect the industry
Companies Mentioned: Nestlé (South Africa) (Pty) Ltd, Tiger Brands Ltd, Aspen Nutritionals (Pty) Ltd, Other Suppliers
Scope
- The top three Living Standards Measure (LSM) groups, 8-10, are the main purchasers of commercially prepared baby food, and these groups represented just 24.5% of the population in 2015.
- Consumption per baby aged 0-3 years stood at 12.7 kg in 2018, but because only a proportion of mothers are in a financial position to purchase baby food.
- The highest growth rate over the period 2012 to 2018 was registered by wet meals, where retail sales doubled and volume sales rose by 12%.
- There is significant domestic production, with market leader Nestlé producing both its milks and cereals in the country. Other local producers include Tiger Brands, Aspen, and Rhodes Food Group.
- Nestlé, despite losing share, has been the most important supplier throughout this period, accounting for 52.5% of total market value in 2018. Tiger Brands (Purity) is in second place with 21%, while Aspen (which sold its business to Lactalis in late 2018) has been strengthening its position, gaining a share of 19%.
- Supermarkets are the main source of supply, accounting for over half of volumes, while hypermarkets are growing in importance.
- The market is expected to increase by 65% in current price terms between 2018 and 2024.
Reasons to buy
- Evaluate important changes in consumer behavior and identify profitable markets and areas for product innovation.
- Analyse current and forecast behavior trends in each category to identify the best opportunities to exploit.
- Detailed understanding of consumption by individual product categories in order to align your sales and marketing efforts with the latest trends in the market.
- Investigates which categories are performing the best and how this is changing market dynamics.
