An Industry View of the Organic Baby Food Market Essay

â€Å"The organic niche for baby-food processors and retailers may continue to be a window of opportunity for increasing sales in an otherwise stagnant industry. † There are limited studies done on the organic baby food niche, but it is proven by many studies that its popularity and market share continue to grow at a double digit rate when compared to conventional baby food products. * Organic baby products averaged around 7. 7% total market share in 2010, and expected to be 10. 9% by 2014. * Growth is partially contributed to the expanding sector of consumers buying only organic products. * It is important to note that Individual manufactures and retailers are never again expected to achieve growth rate like that in recent years (since 2000) due to the saturation and leveling of the market. A growing number of baby food consumers are realizing the benefits of organics over conventional counterparts, and are in most cases willing to pay a premium for organic products. However; being organic or not organic has yet to become a major determinate in making baby food purchasing decisions. * The most important factor influencing the decision to purchase organic vs. conventional remains nutrition. Organic or not organic comes in a very distant 4th according to a study done by Bond, Thilmany, and Bond. * The same study concluded that although most people are willing to pay a premium for organic baby food, it is not considered to be a dominate purchasing factor. * On the other hand, when looking specifically at consumers who purchase only organic food, organic baby food is among the most popular items purchased. Illustrations below produced by Agriculture and Agri-Food of Canada show that per capita dollars spent on organic baby food and the compound annual growth rate for organic baby food is second only to organic ice cream. With the increasing number reputable companies starting to produce organic baby food, reliance on â€Å"trendy† advertising, product innovation & development, SEO, a constant effort to educate consumer awareness, and acquiring shelf space everywhere possible is recommended to stay competitive. * Eating at home and eating healthy are important trends that are likely to increase demand for organic foods in general. * The misconception that organic food is only accessible and purchased by wealthier consumers is fading. Organic products are still considered to be a niche market, but organic packaged food has increasingly penetrated mass market grocery retailers such as Wal-Mart and Whole Foods. * On-line sales will continue to increase as people become more connected and comfortable with technology. Especially true for the next generation of mothers who are already experts in convenience and on-line shopping. Continue to focus on developing your e-commerce capabilities. * The organic food retail industry is highly fragmented and comprised of many small local and regional chains. Focusing on expanding into these stores will allow you access to additional locations; therefore increasing brand recognition and influence on consumer decisions. * Develop relations with suppliers. Major competitors manufacturing organic baby food include: * Earth’s Best- Gerber. * Hain Celestial Group – Happy Family * Happy Baby- Kamut International More at http://www. theorganicpages. com Bottom line; with the national influx of local health food stores and the expanding selection available at grocery stores and boutiques, organic baby food should provide for a steady market increase in the years to come. People are increasingly requesting organic products, and like most adopted trends, these parents will pass on their buying habits to their children who will also become devoted patrons. The key to long term success will be to stay on top of your industry. This includes aggressive marketing strategies, developing good business relations with you suppliers and retailers, and actually understanding what your consumers want rather than telling them what they want.   [ 1 ]. Demand for Organic and Conventional Baby Food – Victoria S. LeBeaux, James E. Epperson, Chnng L. Hnang (March 1, 2009) [ 2 ]. Agriculture and Agri-Food of Canada [ 3 ]. Demand for Organic and Conventional Baby Food – Batte et al. (2007) [ 4 ]. Datamonitor, Whole Foods Market, Inc Market Profile.