The Baby Food Sector in Portugal, 2018
The baby food sector declined sharply up to 2014, but seemed to turn a corner in 2015 and 2016 thanks to increased birth numbers, an improved economy, and higher disposable incomes. A drop in the number of births in 2017, however, saw the sector dip again. Price sensitivity has held down prices, encouraged by the introduction and popularity of lower priced products. In 2017, the largest category in volume terms was baby meals, with 35.1%. Baby cereals have marginally moved ahead of baby milks, with volume shares of 32.3% and 32.2% respectively. Baby drinks and finger foods remain tiny. The supply of baby food is now in the hands of two major manufacturers - Nestlé and Danone - which hold a combined 80% of value. Both are active in all the major categories, and have local production facilities. Alter (with its Nutribén brand) is the only other significant player. Following the liberalization of the distribution of baby food in the early 1990s, pharmacies accounted for less than 10% of baby food sales in 2017, with food retailers now representing the bulk of sales. The market is expected to struggle over the next few years, as the number of births continues to decline. In total, the sector is forecast to grow by only 1.5% in volume terms, and by 16.2% in value terms.
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- First-stage milks continue to account for the largest share in volume terms, despite the overall decline in the number of births. Overall, their importance has declined over the last six years, partly as a result of higher rates of breastfeeding, as well as lower birth numbers.
- Second-stage milks decreased marginally, due to the declining number of births, although it remains the second largest segment. With the advent of third-stage milks, second-stage milks have faced more competition.
- Special dietary formulae is the smallest segment, accounting for 9.4% of sales in 2017. Despite the high cost of these milks, their share has increased slightly in volume, and more clearly in value, as those mothers who can afford them have been persuaded of their benefits
- Plastic pots are offered by Nestlé and Danone, and pouches by Humana, Vitagermine, Hero, Nestlé , Danone, Nutribén, and a number of own labels including Continente. Danone, Nestlé, and Nutribén supply products in jars.
- Demand for cereals is expected to show no overall growth over the forecast period, although per capita intake levels will rise marginally, sustained by the growing popularity of new flavors and ready-to-eat variants.
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- 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.
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