Natural, organic products poised to boost baby care
A lower birth rate, coupled with the tough economy, is expected to hamper sales of baby care products over the next few years, but according to data from Euromonitor International, some bright spots remain within the baby care sector.
Retail sales of baby care products are expected to grow by less than 1% annually between 2008 and 2013, to a total of $815 million, stated Euromonitor in its most recent report on U.S. baby care. Meanwhile, the birth rate is projected to grow slowly, with the number of births expected to rise by less than 1% annually between 2008 and 2013.
In previous years, many women were having babies at a later age, and they could afford to splurge on baby care products, including the higher-priced “natural” and “organic” baby care products. While the average age of women at first childbirth is expected to continue to rise, according to Euromonitor, their disposable incomes are unlikely to follow suit, thanks to the economic downturn.
“The major potential threat to growth during the forecast period is the economy, as consumers will be inclined to use fewer baby care products and to choose private-label and mass-market products over higher-priced brands,” the report stated.
However, there are some pockets within the vast baby care sector that are expected to fuel some growth: baby sun care, baby bath products and natural/organic baby care lines.
With skin cancer rates on the rise, baby sun care sales are expected to be the fastest-growing sub-sector, as parents grow increasingly concerned about protecting their children from the sun’s harmful rays. Sales are projected to grow by an annual average of more than 2% between 2008 and 2013, to reach $176 million at constant 2008 prices.
Baby products, which are a necessary part of the baby care routine, are expected to benefit from the convenient 2-in-1 bath/shampoo formulas, and are expected to grow by a compound annual growth rate of 1% in the forecast period.
Meanwhile, the higher-priced natural and organic baby care segment likely will see more competition from larger manufacturers, which are developing lower-priced products with natural or organic positioning.
“In the short term, parents worried about the harmful effects of chemicals, such as parabens and phthalates, are expected to [buy niche lines]. However, in the medium and long term, larger manufacturers are expected to introduce more competing natural and organic varieties,” Euromonitor stated.
This already is evident when walking the baby care aisle. For example, at one CVS/pharmacy store in Manhattan, the new Aveeno Baby Essential Moisture shampoo by Johnson & Johnson Consumer Cos. was on the shelf. Formulated with Aveeno Active Naturals, the shampoo uses natural oat, wheat and vitamin E to condition as it cleans. The moisturizing, tear-free shampoo hit retail shelves in May and is priced at $4.49.