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Market Demand And Potential For Gerber Baby Foods

Market Demand And Potential For Gerber Baby Foods

The number of newborns in the state of North Carolina has increased 8.6% over the last ten years and not surprisingly, the increase of “hungry mouths” has demanded an increase in the number of baby food products. One of the major companies in this industry is Gerber Foods, a subsidiary of Novartis Because Gerber products target prenatal to toddler age children, brand loyalty can be created at an early stage of a child’s life. It is important, however, for Gerber to market their full range of products early enough to create such a loyalty.

According to a study conducted by the Agri-Food Trade Services, sales of Organic based foods have increased yearly over 20%. In 2003, the total organic food sales were estimated to be worth nearly $9 billion, and on April 21, 2001, the Appropriate Technology Transfer for Rural Areas (ATTRA) enacted a law entitled the National Organic Program that now requires that all producers, processors, and handlers be certified to handle organic products. Because of the increased awareness in parents on the advantages of Organic foods, I believe that Gerber’s new line of Tender Harvests (a product made with Organic fruits, vegetables, and grains) will have the biggest impact on Gerber’s sales in the future.

Women comprise the largest share of natural and organic food shoppers. Because they tend to be more aware of the nutritional value of the foods and beverages that they eat, the majority of purchases of baby foods tend to fall under the same organic foods category. Surprisingly, many parents have shown a willingness to purchase premium-priced baby food while maintaining low levels of interest in purchasing organic products for themselves.

There are many ways to promote the Organic based products in the state of New Jersey. The most promising way, and the best way to develop brand loyalty, is to promote the brands in areas where pregnant women will have the greatest chance to view the marketing material. These places should include doctor offices, hospitals, and even Parent magazines and Internet sites. Because most companies that produce baby food products are relatively small, “advertising expenditures have also been small” (Agri-Food Trade Services). Even Gerber have generally relied upon product packaging or point-of-sale advertising to inform consumers the benefits of their products so I believe that by advertising and informing potential parents of the benefits of organic based foods for their newborns would increase future sales.

Over the last few years, competition in the organic baby food industry has increased immensely. In 2000, Heinz announced plans to acquire an organic baby food company called Earth’s Best, however, while Heinz is the largest baby food company in sales outside the US, they still trail Gerber in the US (Gerber has 67% of baby food sales vs. Heinz at 16%, Beechnut at 15%, and Earths Best at 2%). Because the competition is already beginning to compete more strongly in the Organic baby food product industry, I believe that it is important to start creating a bigger awareness with the Gerber brand line. It’s also important to note that a report written in 2004 stated that unlike most areas of the U.S. food industry, consumers have “yet to establish brand preferences for the majority of natural and organic products. This lack of preference gives new products a good chance to become established in a market devoid of a few dominant products that hold a significant share of market sales” (ATS). These product lines tend to be in their infancy, with retailers and distributors looking for new items to expand the current selection.

www.gerber.com/home (explains the quality and consistency of Gerber foods)
vm.cfsan.fda.gov (explains the food and drug administration’s laws on baby foods)
www.agr.gc.ca (explains the difference in foods grown and harvested for baby foods)
www.birdseyefoods.com (competitor’s website to see if they comply with the FDA as well as Gerber)
www.supermarketguru.com/page.cfm/34 (How to market and do market research on children and parents needing to by foods for children)

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