Posted on May 01 2018
Demand for Naturals Shifts Baby-care Market in U.S.
Natural and organic baby brands are driving growth in the baby category.
By Ellen Thomas on April 20, 2018
The baby-care market in the U.S. — which reached $600 million in 2017, according to Kline & Co. data — is undergoing a seismic shift. For starters, the key players have changed. While Johnson & Johnson retains three-fifths of the market share with Johnson’s Baby and Aveeno, Unilever has edged into third position following private-label brands, thanks to the launch of Baby Dove and its acquisition of Sundial Brands, per Kline & Co. Market trends are following what is happening in the facial skin-care category — demand for clean formulations, fragrance-free products and segmentation by skin type, is on the rise.
The channel breakdown is shifting too — 20 percent of U.S. baby-care products are sold online, according to TABS Analytics, which is 10 times higher than the online share across all consumer packaged goods categories. Launching baby care is now considered a gateway into e-commerce for established personal-care brands, says a recent Mintel report. As a result, a slew of new brands and products have launched in the past year, fragmenting the market and driving category growth. Kline & Co. predicts a compounded annual growth rate of 2.1 percent in baby care over the next five years, driven primarily by naturals.
The brainchild of L’Oréal product development veteran Kate Solomon, eight-year-old nontoxic beauty and personal-care brand Babo was an early arrival to the natural baby-care boom, but demand for clean formulations in the category is fueling its current growth streak. Babo grew 65 percent year-over-year in 2017 after launching on ulta.com, and will roll out to all Whole Foods doors this year. Industry sources project $20 million in retail sales for 2018.
Its latest launch is a range of fragrance-free products for baby, consisting of six stockkeeping units including a hydrating stick, diaper cream, shampoo and wash, foam wash for newborns, a daily lotion and healing ointment. “Fragrance-free is becoming an even greater category, as mothers are looking for products without allergens,” says Solomon. Prices range from $9.95 to $19.95.