According to the study, ‘The Baby Food Sector In Argentina, 2018’, there are a number of interesting findings that have been made regarding the country’s baby food market.It is well known that baby food plays an important role in the nourishment of a child. Today, with increasing awareness nutrition has become one of the main topics of concern. Child nutrition is gaining importance around the world including in Argentina. According to the latest estimates the birth rate of Argentina has been decreasing which should suggest unfavorable conditions for the baby food sector of the country however; studies show that baby food in Argentina has seen growth both in terms of value and volume. Research studies have found that when choosing for baby products especially baby food Argentine consumers are highly aware. These consumers have traditionally had a negative attitude towards processed baby food and commercially prepared baby foods which are seen as less healthy compared to freshly prepared meals. However, it is not only the consumers’ perception that is hindering growth of this industry. Some economic factors are also contributing, for instance, widespread inflation in recent years has dampened volume growth in the country leading to contractions in 2015 and 2016, although 2017 saw a return to a low level of expansion. In 2017, the market was worth quarter of a billion US Dollars approximately but per capita consumption per baby aged 0-3 years remains low at just over five kilograms, although it has grown by one-tenth proportion since 2011.
Exports of milks and cereals have fallen but remain significant. Exports of all other baby food are minimal. Apart from exports, marketing too has seen a shift in trend with large supermarkets and hypermarkets gaining ground despite nearly half of the milk still being sold via pharmacies. Recently food retailers took the largest share of the market with more than half of the volume sales. Also, manufacturers are not allowed to donate free samples of baby milk to mothers or hospitalsand there are restrictions on the advertising of infant formulae. Although there have not been much changes in rates of breastfeeding, the proportion of sales accounted for by first and second-stage milks has fallen as a result of the increasing popularity of growing up milks. Growth has also been noted in cereals which now account for more than one-tenth of retail sales of all baby food which is double the proportion they held in 2011. However, volume sales have risen less quickly than either baby milks or baby meals.
The baby food market is currently dominated by two companies namely Danone and Mead Johnson which together hold nearly three-fourth share in volume and value sales. Danone was recently the leader in value sales although it ranked second in volume terms. Nestlé Argentina SA is also among the key players.
Argentina seems to be going through a lot as far as its baby food sector is concerned. Economic conditions and consumer behavior have greatly hindered the growth of this sector. Marketing of baby food is witnessing great change as well and reliable international brands continue to dominate the market.
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Ankur Gupta, Head Marketing & Communications