How much is the baby market worth in the UK and what trends are impacting it? The baby and infant market is experiencing a number of significant changes. As consumer attitudes and requirements change, established brands in the food, disposables and drink categories are starting to struggle to keep up with smaller high-growth challenger brands. These challenger brands are quickly gaining market share, but more importantly winning the hearts and minds of parents who are looking for brands that they can trust with a clear and compelling message. ECI has a strong track record of investing in disruptive consumer businesses and we are actively looking for growth businesses to back in the early-years market.
Convenience is key
Family and parental dynamics have undergone (and are still undergoing) a pronounced shift. The rise of working mums is one of the biggest changes in the UK with 75% of all UK mothers now working either full or part time. With more demands on their time, convenience is key for working parents and products that help them to provide quality care for their young ones quickly are seeing rapid growth.
In addition to increasing parental employment rates, parents are choosing to have children later in life with recent research indicating that 70% of fathers and 55% mothers are over thirty at the point of their child being born. With this comes greater spending power and innovative brands in the category are capitalising on this to drive growth in their businesses and the category itself.
Focus on nutrition
Health and wellness is climbing higher up the consumer agenda and the early-years market is no exception with some established brands like Heinz gaining unwanted attention for high sugar and salt content. While there are currently no official sugar intake guidelines for children under four, parents are increasingly concerned with the content of their children’s foods.
The issue of childhood obesity is firmly in the consumer spotlight and is frequently discussed in the media. Portion control is therefore gaining importance, with consumers increasingly searching for children’s products that deliver on taste but fit within calorie and portion intake guidelines.
There is a real opportunity in the early years market for challenger brands if they are alive to this trend and use it to acquire customers and gain their trust.
The international opportunity
So how much is the UK baby market worth? In 2020, the baby care market was worth an estimated £20 million, with value reaching a high of just over £24 million in 2018. Whilst the UK baby product market is an exciting place to be, the international opportunity is perhaps even more compelling. International markets hold huge (and often untapped) potential for businesses in the baby and infant market.
Globally, consumers are searching for brands and products that they can trust to take care of their children and they are increasingly turning to UK brands in this quest. The US market has been a key opportunity for UK baby focused brands and a number of UK businesses have posted impressive growth in North America.
Asian markets also represent real opportunities for UK baby product businesses, with China for instance showing growth of 250% over the past 5 years. Whilst building distribution in China has its challenges, the rewards are certainly there when you get it right. ECI has seen this first hand having helped some of our current portfolio businesses enter the market directly.
An exciting investment opportunity
It is clear that the baby and early-years markets are undergoing a number of changes that are causing headaches for some established brands. This is, however, an exciting opportunity for businesses that are more agile and able to keep ahead of the curve. The positive and sustained demographic and consumer drivers in the sector make this a very exciting sector in which to invest and one in which we are eager to find businesses and management teams to back.
If you would like to talk to someone about the opportunities in the baby product space, please get in touch with George Moss.
 ONS, Families and the labour market UK 2020
 ONS, Births by parent characteristics UK 2019