ORGANIC BABY FOOD MARKET ANALYSIS

Market Challenges And Opportunities

Driver

Online retailing for Organic Baby Food holds huge potential for growth in the market. Factors such as the increasing popularity of internet services, advancements in services such as 4G and 5G along with smartphones in emerging economies of the Asia Pacific region (mainly India and China) are driving online sales for organic baby food products. More consumers are opting for online purchases of baby food products owing to the ease. Furthermore, the rising emergence of e-commerce companies and innovative strategies adopted by major players such as channel expansion will fuel the growth of the online segment in the organic baby food market.

Asia Pacific is the fastest-growing market for organic baby food owing to its large population and high birth rates, especially in countries such as India and China. According to the World Health Organization (WHO), Asia Pacific had around 311 million infant population (nearly half of the world’s infants) in 2022. Major market players are looking for opportunities to expand their business in the Asia Pacific region owing to favourable conditions it offers for the growth of the organic baby food market.

North America and Europe dominated the Organic Baby Food Market in 2022 with North America holding a prominent position. The organic baby food market in North America was valued at US$ 2,092.9 Mn in 2022. Stringent government regulations pertaining to the quality of baby food coupled with high consumer awareness regarding the harmful effects of chemicals on infant development have boosted the growth of the organic baby food market in this region. According to a report published by the Food and Drug Administration (FDA) of the U.S, 6 out of 10 U.S. citizens believe that organic food is better for their health. A stringent regulatory scenario in the U.S. ensures that the quality of the product is at par with the required standards. According to Title 21 of the Code of Federal Regulations (CFR), “the manufacture or distribution of infant formula that will be introduced to the interstate commerce in the United States must comply with the requirements of the Federal Food, Drug, and Cosmetic Act (the act), 21 USC 321 et seq., and FDA's regulations implementing the act”. These factors are highly responsible for the growth of the organic baby food market in North America.

Market Restraints:

Organic food products adoption rate is very slow in developing market, mainly in South Asia and Africa. Temporary demand created due to lack of awareness and knowledge among consumers. Organic food is costly than conventional food products. In developing countries safe food is not a concern for consumers, Majority of developing countries has diversity in earning power and consumer hesitate to spend on these products. This difference of prices poses challenges for organic products in countries.