According to the study, ‘THE BABY FOOD SECTOR IN PORTUGAL, 2018’, sales of all baby food products have recently noticed an increase after a stall in past years. Also, the hectic modern lifestyle has created a demand for convenience products. Portugal has the second lowest birth rate in Europe after Italy but the involvement of the economic landscape of the country cannot be denied. Several years of recession had made families postpone their decision to have babies but now the country has reported reduction in population by a smaller margin.
Portugal’s baby food sector when reviewed presents quite a fluctuating trend. The birthrates in Europe had been declining for a long time even before the 2000s however, the situation changed a little when European governments welcomed immigrants and initiated cash benefits for young couples starting families. The situation seems to deteriorate once again and Portugal is among the countries bearing the brunt as its baby food consumption turns out to be lower when compared to that at the beginning of the decade. Additionally, increasing parental awareness about breastfeeding being superior not only in nutritional value but also in cost effectiveness has led to the hindrance in growth faced by the Portuguese baby food sector.
There still exists the section of working mothers that has actively opted for milk formula and this product is considered among the main growth drivers of this industry. Packaged or canned baby food such as baby rice and fruit is seen as a convenient substitute or supplement to homemade baby food.
Baby meals account for more than one-third of the baby food market in Portugal. First-stage milks continue to account for the largest share in volume terms. Second-stage milks have seen a decrease in their share due to the decline in births although it remains the second largest segment. Special dietary formulae are the smallest segment accounting for one-tenth of the sales in 2017. Plastic containers of baby food are offered by giants such as Nestle. The Swiss company Nestle with its subsidiary Nestle Portugal continued to lead sales in 2017 having nearly half of the entire value share due to its operations in various branches of baby food. DANONE and Milupa are also significant players. DANONE is famous for milk products and cereals. Milupa is a trustable company that has specialization in bottled milk formula such as Aptamil which is a highly renowned and widely used product. Mead Johnson Nutrition is an American company that has mainstream products such as Enfamil which are specialized products of milk formula for infants. The company is among the big players in Portugal’s baby food market. Despite intervention of many international players Nestle and DANONE are the two manufacturers that mainly control the supply of baby food in the country.
The improving economic conditions faced by the country are expected to positively affect the birth rate of the country. Parents’ willingness to adopt nutritionally improved foods that are organic in nature is believed to boost value sales. However, the demand for baby cereals is expected to show no overall growth.
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Ankur Gupta, Head Marketing & Communications