Clean processing of ingredients is expected to propel growth of the organic baby food market. For instance, in February 2021, Else Nutrition Holdings Inc. reported development of a proprietary process to further ensure the safety of its infant formula. Moreover, increasing demand for organic food products is also expected to aid in growth of the market. For instance, according to 2019 Organic Industry Survey by the Organic Trade Association, Organic food sales in the U.S. increased 5.9% in 2018 to reach US$ 47.9 billion and organic food sales made up 5.7% of overall food sales, which rose 2.3% in 2018.
Expansion in emerging economies is expected to offer lucrative growth opportunities for players in the organic baby food market. This can be attributed to increase in rate of hospital delivery in rural areas. For instance, according to the National Health Commission, China's rate of hospital delivery remained over 99% in recent six years, and the percentage in rural areas has seen a rise from 51.7% in 1996 to 99.8% in 2018. Moreover, increasing world population is also expected to aid in growth of the market. For instance, according to projections by Population Reference Bureau (PRB) included in the 2018 World Population Data Sheet, the world population is expected to reach 9.9 billion by 2050, up 2.3 billion or 29% from an estimated 7.6 billion people in 2018.
However, presence of toxic heavy metals in baby foods is expected to hinder growth of the organic baby food market. Decreasing birth rate is also expected to limit the market growth. For instance, according to National Vital Statistics System, the provisional number of births for the U.S. in 2018 was 3,788,235, registering a decrease of 2% from 2017 and the lowest number of births in 32 years.
The organic baby food market is witnessing several M&A activities. For instance, in February 2021, Fra Fejø, a Danish supplier of organic baby food, acquired Moseriet to expand its business overseas. Similarly, in February 2021, Neptune Wellness Solutions, a wellness company, acquired 50.1% share in Sprout Foods.
Competitive Analysis
Major players operating in the organic baby food market include, Serenity Kids, Abbott Laboratories, Groupe Danone, Nestlé S.A., Kraft Heinz, Company Hero Group, Else Nutrition Holdings Inc., Amara Organics, Baby Gourmet Foods Inc., Bellamy's Australia, Green Monkey, Sprouts Foods, HiPP, Initiative Foods, Little Duck Organics, North Castle Partners, Olli Organic, One Earth Farms, Tastybaby, and Vitagermine, among others.
Major players operating in the organic baby food market are focused on launching new products to expand their product portfolio. For instance, in February 2021, Serenity Kids launched rice-free and grain-free puffs.
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