Baby product sales boom despite pressure on household incomes, declining birth rate - report

Sales of baby products in South Africa are growing rapidly, despite all signs that this market should be struggling, according to a new report.

Limiting factors include declining birth rates, the pressure on household incomes and parents navigating rising food prices, according to fast-moving consumer goods (FMCG) retail research company Trade Intelligence (TI).

Yet TI's latest South African Baby FMCG Landscape report reveals that the baby category continues to grow in value across baby formula, food, nappies and personal care products.

This signals higher spend per child and shifting value dynamics.

Parents have always been price-conscious, says TI, but what has changed in today’s landscape is how they balance price against risk.

"Baby purchases carry consequences. If a product doesn’t work, the cost isn’t just financial, it’s one of discomfort, anxiety and lost sleep. That reality reshapes how parents define value and how they behave in store."

South Africans are known to love a good deal, but the one category where they don't hold back is wellness, which includes personal care and is linked to baby products.

And while parents will trade across brands, they are far less willing to compromise on perceived safety, efficacy or suitability for their baby.

This applies in particular to baby food or formula, says Andrea Slabber, Insights Lead at Trade Intelligence.

"At this point in time, there's only one baby category where brand loyalty is particularly strong still and that's with infant formula. I believe that every parent or caregiver would want to buy the best nutrition they can afford."

The TI survey shows how even in the lowest of the low-income households the caregiver will invest in quality formula, spending more than one would expect, Slabber says.

In other categories, for instance nappies, she says they're seeing retailers doing well with their own brands as they compete with the traditional leading brands.

"I remember many years ago my peers would not have traded down to a retailer brand for affordability because you trust the quality of the leading brands, but we've seen a big shift."

As the survey reflects, parents are value-driven but risk-averse - they'll trade down, but only to a point, and they will switch brands, as long as these deliver.

For more detail, listen to the interview audio at the top of the article