Baby food will continue to be negatively impacted by the COVID-19 pandemic in 2021 with current value growth only increasing due to double-digit unit price inflation. The decrease in demand is largely due to the contraction in prepared baby food as parents remain at home and replace prepared baby food with home-made options, which is largely considered a healthier alternative.
Prepared baby food registered a poor performance in 2020 and will continue to see declines in 2021. The product was deemed unnecessary during pandemic, when mothers could stay at home with their babies and breastfeed them more frequently.
E-commerce hugely benefitted from the pandemic in 2020 overall with its value sales almost quintupling within the year. Prior to the pandemic, e-commerce was unpopular amongst Uruguayans with most favouring supermarkets and health and beauty specialist retailers for baby food purchases.
Low profitability, high prices, and low levels of demand will continue to defer companies from investing in the development of baby food over the forecast period. Demand is expected to remain low in the coming years as the pandemic will change consumption habits with consumers inclined to stay at home more often.
Over the review period, multinational companies have led in baby food sales. This is expected to continue in the forecast period with the top three multinational companies set to hold their position.
Over the forecast period, baby food products will continue to face difficulties due to the declining birth rates in Uruguay and the rising prevalence of breastfeeding. Breastfeeding is strongly established in the country, (regardless of socioeconomic status) with the Ministerio de Salud Publica (Ministry of Public Health) strongly promoting the benefits of it and launching educational initiatives to encourage younger mothers to breastfeed their offspring.
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This report originates from Passport, our Baby Food research and analysis database.
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