According to a new report published by Allied Market Research, titled, "Canada Baby Food Market by Product Type and Distribution Channel: Opportunity Analysis and Industry Forecast, 2019-2026", the Canada baby food market size was valued at $1.3 billion in 2018 and is projected to reach $2.4 billion by 2026, growing at a CAGR of 7.60% from 2019 to 2026. The cereals segment accounted for approximately 47% of the total Canada baby food market share in 2018.
Surge in awareness for nutrition, rise in parental concerns, rapid urbanization coupled with a significant increase in the working women population and surge in government initiatives for infant care are the major drivers of the Canada baby food market. Nowadays, health awareness and health concerns are on the rise among Canadian parents. They are willing to buy expensive and high-quality baby food to improve the health and provide the right nutrition to their infants. Thus, rise in adoption of organic food and high consumer demand boost the growth of the Canada baby food market.
In addition, continuous innovation by some key players in the Canada baby food market facilitates variety in their product offerings, which cater to the requirements of their target customers. The launch of new flavors coupled with attractive packaging enables to garner considerable attention of the millennial parents. Furthermore, appealing advertisements through various channels including social media, television commercials, and radio help to reach the target customers and expand the consumer base.
According to Shankar Bhandalkar, Team Lead-Research, Food and Beverages at Allied Market Research, “The growing popularity of offline traditional stores is helping traditional suppliers/distributors to gain maximum revenue share in Canada market. However, increased penetration of global E-commerce players such as Amazon, Walmart through their expansion strategies would supplement the sales revenue growth of baby food products in the long run.”
Manufacturers utilize these media channels to create consumer awareness regarding their baby food product offerings and their consequent benefits to sustain the intense competition in the Canada baby food market. For instance, the company Plum Organics features real stories, comic videos, and shareable badges on their website as a means of advertisement. Thus, they can relate to the target consumers and thereby influence their buying decisions. These factors have fueled the growth in the Canada baby food sector.
The rapid distribution of information coupled with the massive adoption of internet in Canada have propelled the use of e-commerce as a distribution channel. Ecommerce proves beneficial as it allows consumers to shop as per their convenience as well as enables price comparisons. Thus, it is used as a platform to boost the sales of baby food products. In addition, online technologies allow product differentiation and alleviate price competition, which is opportunistic for the Canada baby food market growth.
Organic products have been gaining steady share in retail market. More than half Canadians buy organic food weekly. This purchasing behavior pattern among the consumers creates huge opportunities for the organic baby food sector. In addition, due to increase in health consciousness among consumers, the preference for organic and clean-labelled products has increased significantly. Therefore, the high demand for natural and organic products continues to provide numerous opportunities for the manufacturers.
Key Findings of the Canada Baby Food Market :
- Based on type, the cereals segment accounts for the largest share in the baby food market analysis in 2019, however the dried baby food segment is expected to grow at the fastest CAGR of 9.5% during the forecast period.
- Based on distribution channel, the offline store/retail store segment accounts for the larger Canada Baby Food Market demand in 2019, while the online segment is expected to experience growth at the fastest CAGR of 9.5% during the forecast period.
The key players in the Canada baby food industry include Nestlé S.A., Danone, Plum, PBC, Hain Celestial, Diana Group, Mead Johnson & Company, LLC, Abbott, Loblaws Inc., Parent's Choice Infant Formula, and Kraft Heinz Company.