To better understand why consumers choose one baby food or diaper brand over another and identify the incentives for brand switching, Nielsen polled online respondents in 60 countries who had purchased baby care products in the past five years. The survey revealed key insights into the purchase journey and identified the most influential online and offline sources. Finally, it identified opportunities and strategic areas needed to win in the global baby care product market.

According to World Bank data, developing markets have an average birth rate of 16.6 per 1,000 people, compared to 11.2 in developed markets. Although global birth rates have steadily declined across all regions and economic levels over the past 55 years, developing countries still have the highest global birth rates. Furthermore, rapid urbanization, the growth of the middle class, and rising female labor force participation in many developing markets have encouraged the adoption of convenience-oriented lifestyles, thereby increasing demand for infant formula and baby food.

"The growing middle class in developing regions presents new opportunities for the baby care market, as demand for products aligned with working mothers' plans is increasing," said Fan Yijin, General Manager of Nielsen China. "These opportunities include baby care products in the premium space. In fact, in many countries, storing premium products is an important marker of social status."

In terms of packaging formats, products in jars or glass bottles constitute the vast majority (87%) of baby food sales in the 16 selected markets. But when it comes to growth, pouches (containers with a plastic spout at the top from which one can sip) are very popular, with value sales increasing by 28% between December 2013 and December 2014.

"The popularity of pouches is largely driven by their convenience and flexibility," said Ms. Fan. "Pouches provide nutrition, are convenient and portable, and are well-suited to consumers' on-the-go lifestyles. They also encourage babies' self-feeding and independence."

The organic segment is also growing rapidly. In the 16 markets surveyed, value sales grew by 26% over the past two years, while non-organic products declined by 6%. North America is the largest organic market, accounting for 72% of value sales in the past 12 months.

"Consumers are increasingly health-conscious and seek natural foods with minimal processing, and the stakes are even higher when it comes to baby food," said Ms. Fan. "More parents are looking for foods that establish a healthy life for their children—even at a premium price. As more parents can afford higher-priced products, we expect this segment to continue growing."

Parenting is a big responsibility, which is why guidance from trusted advisors is so valuable. When seeking advice on the best baby food/formula for their child, who do new parents turn to most? The short answer is: family and friends, as 44% of global respondents said. They are also the most influential. Nearly 4 in 10 global respondents (38%) said that advice from friends and family has the most impact on their purchase decisions.

Consumers don't just rely on their social circle and family; advice from health experts is also highly influential. 36% of global respondents said they learn about food/formula through baby health experts, and almost as many (34%) said these opinions influence their purchase decisions.

When purchasing baby food, three product attributes stand out far above others. 39% of global respondents said that a trusted brand is the most important factor when deciding which brand and type of baby food to buy, followed by good overall nutrition (37%) and safe ingredients/processing (36%).

Due to many food safety incidents in recent years, particularly in the Asia-Pacific region, respondents in this region place more importance on safety than all other regions. 40% of Asia-Pacific respondents said that safe ingredients and processing are the most important factors in their purchase decisions, compared to no more than 32% in any other region.

"Manufacturers that fail to meet consumers' basic safety needs may risk long-term serious damage to their brands," said Fan Yijin. "Food safety issues can severely undermine consumer trust and have created huge demand for foreign products with credible names and good safety records."

Although the baby food and formula market is mature in many markets, there are still plenty of opportunities. In developed markets, where birth rates are lower and the baby care category is highly saturated, growth will mainly come from innovation and premiumization. In developing markets, innovation is important, but growing demand will be the biggest growth driver. Manufacturers can increase their chances of success by catering to changing market demographics and tastes, considering partnerships, and leveraging individual strengths.

Sales in the diaper market are less concentrated than in baby food and formula. North America and Europe together account for 51% of global sales (34% and 17%, respectively), while Asia-Pacific and Latin America each account for more than one-fifth of sales (23% and 21%, respectively).

Developing markets are growing the fastest. In terms of value sales, between December 2013 and December 2014, the category grew fastest in Latin America (15.5%). Developing markets seem to continue growing, but manufacturers also face unique challenges in these countries. In many developing markets, the diaper market is still in its infancy, and manufacturers must convince consumers not only to buy their brand but also to buy diapers of various types. For example, in India, the use of disposable diapers has traditionally been limited, mainly for special occasions outside the home (although this is changing).

In Asia, convenience, comfort, and competitive prices are driving significant growth in the diaper category. Disposable diapers are extremely convenient and breathable, and more comfortable than traditional cloth diapers, which need to be taped together and are therefore tighter. Additionally, by introducing smaller packs of diapers (one or two diapers per pack), sales in traditional trade and small stores have also increased. Because these packs are cheaper, they are often chosen by consumers.

Meanwhile, parents seek products that gently care for their baby's skin. 40% of global respondents said this is the most important attribute when deciding which diaper brand to buy, 7 percentage points higher than the next highest attribute.

One-third of global respondents said that fit/comfort is important, ranking second on the global list. This attribute is particularly important in Asia-Pacific (38% of respondents said it is important).

As with the baby food and formula market, growth in the global diaper market will not be simple. Manufacturers can win in this challenging space through innovation, cost control, and understanding and appealing to the factors that drive consumers.

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