An Industry View of the Organic Baby Food Market

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Market Research Memo
An industry view of the organic baby food market

“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...
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