Baby and Child-Specific Products in Costa Rica

PROSPECTS

Added-value proposals keep setting the innovation pace, targeting millennial families

A rising number of middle- and high-income young millennial parents are adopting healthier lifestyles, and are therefore becoming more conscious and selective regarding their children’s personal care and eating habits. This trend is reflected in the increased demand for quality baby and child-specific products.

More traditional value brands maintain their popularity by offering innovative formulations at competitive pries

Added-value alternatives and natural-based baby and child-specific products continue to be adopted by more informed and economically advantaged local families. However, price-based competition, new functional claims and promotional point-of-sale activation campaigns also keep boosting demand for mass orientated/traditional top-of-mind baby and child-specific brands, particularly within nappy (diaper) rash treatments, hair care and toiletries (including soaps, shower gels and oils), which are considered essential baby care goods, needed daily.

Natural and niche-orientated local proposals expected to gain sales momentum

As a growing base of younger millennial families continue gaining awareness in relation to the rising offer of higher-quality baby and child-specific options, their demand for all-natural and functional added-value proposals will continue to open new development opportunities targeted to middle-income and more economically advantaged Costa Rican families. Both large and smaller-scale multinational brands are expected to be more innovative in the face of a rising offer of smaller local business alternatives that are anticipated to gain momentum based on claims such as locally sourced organic ingredients and women’s owned companies.

COMPETITIVE LANDSCAPE

Major international manufacturers maintain their competitive advantages in 2018

Johnson & Johnson de Costa Rica (Johnson’s Baby) and Colgate-Palmolive (Mennen) maintained their strong leadership within baby and child-specific products in 2018 on the strength of their high brand awareness, broad levels of availability at both modern and traditional retailers and their affordable value-for-money ratios. Johnson’s Baby and Mennen continued to take advantage of consolidated manufacturing, distribution and marketing economy-of-scale savings by adopting a mass-orientated logistics’ approach on a regional scale.

Added-value imported and local products anticipated to attract interest over the forecast period

Over the forecast period, a rising base of added-value alternatives will to emerge across all baby and child-specific categories, focusing on targeting economically advantaged millennial consumers through higher quality ingredients claims and natural/functional formulations. Value shares are expected to see increased fragmentation over the coming five years, boosting the performance of higher-end value proposals coming from the US and Europe, which are capable of benefiting from established free trade agreements.

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