SA BABY FOOD INDUSTRY

LANDSCAPE REPORT

COMPILED: OCTOBER 2017

REPORT OVERVIEW

The South African Baby Food Industry Landscape Report 2017 (106 pages) provides a dynamic

synthesis of industry research, examining the local and global Baby Food industry from a uniquely holistic

perspective, with detailed insights into the entire value chain – from manufacturing to retail trends,

competitor and pricing analysis.

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For the Global Baby Food Industry Section:

What are the current market dynamics of the Baby Food industry?

What are the Baby Food industry trends, drivers, and restraints?

For the South African Baby Food Industry Section:

What are the current market dynamics, market size and forecasts for the Baby Food industry?

Who are the key manufacturing players in the SA Baby Food industry?

What are the latest South African consumer and industry trends, drivers and restraints?

For the South African Retail and Pricing Analysis Section:

Who are the key retail players in the SA Baby Food industry?

What are the prices of popular Baby Foods across SA retail outlets?

SOME KEY QUESTIONS THE REPORT WILL HELP YOU TO ANSWER:

FOOD AND BEVERAGES

INDUSTRY REPORT CLIENTS

Our Food and Beverages Industry Landscape reports have been purchased

by manufacturers and retailers, below are selected Clients:

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COMPANY OVERVIEW

Insight Survey is a South African B2B market research company with almost 10 years of

heritage, focusing on business-to business (B2B) market research to ensure smarter,

more-profitable business decisions are made with reduced investment risk.

We offer B2B market research solutions to help you to successfully improve or expand

your business, enter new markets, launch new products or better understand your

internal or external environment.

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Our bespoke Competitive Business Intelligence Research can help give you the edge in a global

marketplace, empowering your business to overcome industry challenges quickly and effectively, and enabling you to realise your potential and achieve your vision.

From strategic overviews of your business’s competitive environment through to specific

competitor profiles, our customised Competitive Intelligence Research is designed to meet your

unique needs.

COMPETITIVE INTELLIGENCE

OUR RESEARCH SOLUTIONS

✓ Competitor pricing research

✓ Store visits and store checks

✓ Competitor interviews

✓ Customer interviews

✓ Company website analysis

✓ Governmental held records

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SCREENSHOTS FROM REPORT

106 page report filled with detailed charts, graphs, tables and insights

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24.8

62.5

0

10

20

30

40

50

60

70

2010 2020*

RETAIL VALUE OF GLOBAL INFANT FORMULA MARKET: 2010 & 2020 (F)

(IN BILLION US$)

The main drivers behind significant

growth in the Baby Food market over

the past few years includes: the rising

population of working women, the

growth in organised retail marketing,

and parents’ concern for the nutrition of

their babies.

Infant (i.e. baby milk) formula is a strong

contributing segment which is defined as a

processed food for infants under 12 months

of age. It is usually prepared for bottle-

feeding or cup-feeding.

There are two types of infant formula,

namely, powder which needs to be mixed

with water or liquid which can be consumed

with or without adding water.

Currently, Infant formula occupies the largest

share of the Baby Food market, followed by

prepared baby food.

However, forecasts predict that prepared

baby food will gain prominent adoption in the

global market over the period 2017-2022.

But, it is not clear whether this growth will be

enough to overtake infant formula in terms of

market share.

The graph below shows the retail value of the

global baby milk formula market segment in 2010

and the forecast for 2020. The retail value of this

market segment is estimated to reach US$ 62.5

billion by 2020, clearly illustrating the dominance

of this market segment.

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Source: Businesswire; Prnewswire; Theguardian; Statista; Mordorintelligence Image Source: Clipartpanda; Assets

*Note: 2010 is the actual figures, 2020 is based on forecast.

SAMPLE FROM REPORT:GLOBAL INDUSTRY OVERVIEW

Locally Produced Organic Baby Food

The demand for locally produced organic

Baby Food in South Africa is set to grow.

New Baby Food manufacturers are

emerging campaigns to educate parents

about the benefits of organic food, which is

particularly important for children who are

allergic to harmful chemical residues that

may be found in non-organic foods.

Manufacturers are creating new packaging

which complies with the current guidelines

contained in the South African Infant

Feeding Regulations.

One example is locally produced Olli

Organic Baby Food which is certified organic

and offers a range of jarred purees and

cereals, made from naturally grown

organically certified ingredients, ideal for

babies from 6 months onwards.

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Source: Bizcommunity; Foodstuffsa Image Source: iStockphoto; Joburgwest

Online Purchasing Trend

South African baby care consumers are

more likely to purchase baby supplies in a

physical store rather than via an online store.

However, this trend is changing as more

consumers are switching to online channels.

E-commerce retailers are able to compete on

price and convenience, because of the

reduced capital investment in physical

infrastructure and sometimes, in the supply

chain.

It also offers a compelling proposition for

busy parents with the convenience of

shopping at any time, and often with free

delivery.

SAMPLE FROM REPORT:SA INDUSTRY TRENDS

While there was growth in Latin America and sub-

Saharan Africa, a 21% fall in sales in Australasia

lowered the overall outcome.

As illustrated in the graph below, group revenue

for the year ended 30 June 2017 increased by

16% to R41.2 billion, from R35.6 billion for the

year ended 30 June 2016.

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35.6

41.2

0

5

10

15

20

25

30

35

40

45

FY 2016 FY 2017

In Z

AR

bill

ion

ASPEN PHARMACARE REVENUE: FY 2016 AND 2017 (IN ZAR BILLION)

Aspen Pharmacare’s Sub-Saharan

Africa’s (SSA) Business segment’s

revenue has increased from R9.4 billion

for the year ended 30 June 2016, to

R9.9 billion for the financial year ended

30 June 2017.

Aspen Pharmacare’s revenue from their

Nutritionals portfolio increased by 3% to

R3.2 billion for the year ended 30 June

2017.

Aspen’s Other Commercial Pharmaceutical

Brands largely comprises domestic products,

with South Africa and Australia being the

most material contributors.

Revenue from their Other Commercial

Pharmaceutical Brands increased 4% to

R14.0 billion for the financial year ended 30

June 2017.

Adjusting for divestments and products

discontinued or to be discontinued, the core

of this portfolio grew 9% to R13.6 billion in

2017.

Source: Aspen Annual Results Presentation 2017; Aspen Press Release 14 Sep 2017 Image Source:, Aspen Pharma; Clicks

SAMPLE FROM REPORT:SA MANUFACTURER OVERVIEW: ASPEN PHARMA

Source: Insight Survey Image Source: Masterfile; Clicks Online

ProductDis-

Chem

Baby

CityMakro

Baby

Boom

Babies R

UsClicks

Infacare Stage

3 Formula

1.8kg

R189.95 R189.99 R169.95 R189.99 R194.90 R189.95

Isomil Stage 1

Formula

850g

R161.95 R164.99 R192.95 R169.99 R169.90 R194.00

Nestlé Cerelac

Stage 1

500g

R56.75 R56.99 R53.91 R59.99 R59.90 R59.95

Nestlé

Lactogen

Stage 3

Formula

900g

R108.00 R111.99 R109.95 R114.99 R114.90 R113.00

Purity First

Foods

80ml

R8.75 R7.45 R7.57 R7.99 R8.50 R8.95

Purity

Squeeze

110ml

R9.75 R7.90 R8.00 R9.99 R7.90 R9.45

Similac Total

Comfort Stage

1 Formula

820g

R187.95 R189.99 R199.25 R189.99 R189.90 R209.00

Total R723.10 R729.30 R741.58 R742.93 R745.90 R784.30

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A product price analysis conducted by

Insight Survey at the beginning of

October 2017 between Dis-Chem, Baby

City, Makro, Baby Boom, Babies R Us

and Clicks shows that, across a

selected basket of products, Dis-Chem

offers the cheapest option for Baby

Food products.

A contributing factor for Dis-Chem being the

cheapest retail pharmacy at the time of the

analysis, was due to three products being

the cheapest at their stores.

Baby City offers the second cheapest

basket of selected Baby Food products. The

Infacare Stage 3 Formula Baby Food

product was the cheapest at Makro.

Clicks was the most expensive retail

pharmacy store – having a total difference of

R61.20, at the time of the analysis,

compared to Dis-Chem’s total.

*Note: Highest price by product is in red, and lowest price is in green.

SAMPLE FROM REPORT:SA RETAIL OVERVIEW

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BRAND AND QUANTITY

Bokomo

Pronutro

Toddlers

250g R23.95 N/A R22.95 N/A N/A N/A

Bumbles

Stage 1

Baby Food

Purée

80ml R12.95 R9.95 N/A N/A N/A N/A

Hey Baby!

Mini Rice

Cakes

40g N/A R29.95 N/A N/A R27.99 N/A

Hey Baby!

Teething

Biscuits

50g N/A R37.95 N/A N/A R34.99 N/A

HiPP

Organic

Combiotic

Stage 1

Formula

900g R314.95 R314.95 N/A N/A R314.99 N/A

HiPP

Organic

Creamy

Oats

160g R51.95 N/A N/A R59.95 R49.99 N/A

This pricing analysis was conducted at Retail Outlets during w/c 2 October 2017

SAMPLE FROM REPORT:PRICING ANALYSIS: BABY FOOD

TABLE OF CONTENTS

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1. Executive Summary (3 pages):

1.1 Global Industry Snapshot

1.2 South African Industry Snapshot

1.3 Industry Drivers and Restraints

2. Global Baby Food Industry Overview (14 pages):

2.1 Global Health Indicators: Mortality, Life Expectancy and Fertility: GLOBAL POPULATION HEALTH INDICATORS: 2000, 2016, 2017, 2030 (PROJECTED);

GLOBAL POPULATION (IN BILLIONS): 1955-2030 (PROJECTED); GLOBAL POPULATION YEARLY GROWTH RATE (IN PERCENTAGE): 1951-2017 (Table and Graphs)

2.2 Global Health Indicators: Child Population Statistics: GLOBAL POPULATION BY AGE GROUP: 2017 (IN PERCENTAGE); POPULATION OF CHILDREN

UNDER 15 YEARS OF AGE (IN BILLIONS): 1955-2030 (PROJECTED) (Graphs)

2.3 Global Industry Overview: Infant and Young Child Nutrition Overview: NUTRITIONAL STATUS OF CHILDREN WORLDWIDE: 2016 (Graph)

2.4 Global Industry Overview: BABY FOOD MARKET VALUE: 2016 & 2021 (IN BILLION US$); RETAIL VALUE OF GLOBAL INFANT FORMULA MARKET: 2010 & 2020

(F) (IN BILLION US$) (Graphs)

2.5 Global Market Environment: GLOBAL BABY FOOD PURCHASE ATTRIBUTES AMONG CONSUMERS: 2015 (Graph)

2.6 Global Industry Overview: Asia-Pacific: ASIA-PACIFIC CONSUMERS REASONS FOR SWITCHING BABY FOOD BRANDS: 2015 (Graph)

2.7 Global Industry Overview: North America: US SALES OF LEADING BABY FOOD BRANDS: 2016 (IN US$ MILLION) (Graph)

2.8 Global Industry Trends

2.9 Global Industry Drivers

2.10 Global Industry Challenges

TABLE OF CONTENTS

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3. South African Baby Food Industry (49 pages):

3.1 South African Baby Food Industry Overview (14 pages)

3.1.1 South African Health Indicators: Mortality, Life Expectancy and Fertility: SOUTH AFRICAN POPULATION HEALTH INDICATORS: 2000, 2016,

2017, 2030 (PROJECTED); SOUTH AFRICAN POPULATION (IN MILLIONS): 1960-2030 (PROJECTED); LIFE EXPECTANCY AT BIRTH (IN YEARS): 1960-2015; CRUDE

DEATH RATE: 2002-2016 (Table and Graphs)

3.1.2 South African Health Indicators: Child Population Statistics: SOUTH AFRICAN POPULATION BY AGE GROUP: 2017 (IN PERCENTAGE);

POPULATION OF SA CHILDREN UNDER 15 YEARS OF AGE (IN MILLIONS): 1955-2030 (PROJECTED) (Graphs)

3.1.3 SA Industry Overview: Infant and Young Child Nutrition Overview: NUTRITIONAL STATUS OF SOUTH AFRICAN CHILDREN: 2016 (Graph)

3.1.4 SA Industry Overview: Infant and Young Child Feeding Practices: MINIMUM ACCEPTABLE DIET BY AGE, IN MONTHS: 2016 (Graph)

3.1.5 SA Industry Overview: Baby Food Market Size: VALUE OF BABY FOOD 2011-2016, VALUE GROWTH % 2011-2016; VALUE AND VOLUME OF DRIED

BABY FOOD, MILK FORMULA, PREPARED BABY FOOD, AND OTHER BABY FOOD: 2011-2016 , FORECASTS 2017-2021 (Graphs and Tables)

3.1.6 SA Industry Overview: Baby Food Market: LEADING SOURCES OF INFORMATION USED TO PURCHASE SOUTH AFRICAN BABY FOOD: 2015 (Graph)

3.1.7 SA Market Environment

3.1.8 SA Industry Trends

3.1.9 SA Industry Drivers

3.1.10 SA Industry Market Challenges

TABLE OF CONTENTS

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3. South African Baby Food Industry (cont.) (49 pages):

3.2 South African Baby Food Manufacturing Overview (35 pages)

3.2.1 SA Baby Food Manufacturers: Abbott: Overview: ABBOTT’S INTERNATIONAL PAEDIATRIC NUTRITION SALES: 2015 VS. 2016 (IN US$ BILLION) (Graph)

3.2.2 SA Baby Food Manufacturers: Abbott: Baby Food Brands

3.2.3 SA Baby Food Manufacturers: Aspen Pharmacare: Overview: ASPEN PHARMACARE REVENUE: FY 2016 AND 2017 (IN ZAR BILLION) (Graph)

3.2.4 SA Baby Food Manufacturers: Aspen Pharmacare: Baby Food Brands

3.2.5 SA Baby Food Manufacturers: Ausnutria Hyproca: Overview: AUSNUTRIA HYPROCA BRAND, KABRITA REPORTED SALES: 2016 AND 2017

(IN RMB MILLION) (Graph)

3.2.6 SA Baby Food Manufacturers: Ausnutria Hyproca: Baby Food Brands

3.2.7 SA Baby Food Manufacturers: Bumbles: Overview

3.2.8 SA Baby Food Manufacturers: Bumbles: Baby Food Brands

3.2.9 SA Baby Food Manufacturers: Cipla: Overview and Baby Food Brands

3.2.10 SA Baby Food Manufacturers: Danone: Overview: DANONE’S EARLY LIFE NUTRITION SALES: FY 2015 AND 2016 (IN € BILLION) (Graph)

3.2.11 SA Baby Food Manufacturers: Danone: Baby Food Brands

3.2.12 SA Baby Food Manufacturers: HiPP (Rialto Foods): Overview

3.2.13 SA Baby Food Manufacturers: HiPP (Rialto Foods): Baby Food Brands

3.2.14 SA Baby Food Manufacturers: Holle: Overview

3.2.15 SA Baby Food Manufacturers: Holle: Baby Food Brands

TABLE OF CONTENTS

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3. South African Baby Food Industry (cont.) (49 pages):

3.2 South African Baby Food Manufacturing Overview (cont.) (35 pages)

3.2.16 SA Baby Food Manufacturers: Nestlé: Overview: NESTLÉ NET PROFIT: 2016 AND 2017 (IN CHF BILLION) (Graph)

3.2.17 SA Baby Food Manufacturers: Nestlé: Baby Food Brands

3.2.18 SA Baby Food Manufacturers: Nestlé Health Sciences: Overview

3.2.19 SA Baby Food Manufacturers: Nestlé Health Sciences: Baby Food Brands

3.2.20 SA Baby Food Manufacturers: Olli Organic: Overview and Baby Food Brands

3.2.21 SA Baby Food Manufacturers: Pioneer Foods: Overview: PIONEER FOODS GROCERIES DIVISION REVENUE: FY 2016 AND 2017 (IN ZAR

MILLION) (Graph)

3.2.22 SA Baby Food Manufacturers: Pioneer Foods: Baby Food Brands

3.2.23 SA Baby Food Manufacturers: Rhodes Food Group: Overview

3.2.24 SA Baby Food Manufacturers: Rhodes Food Group: Baby Food Brands

3.2.25 SA Baby Food Manufacturers: Tacoma Foods: Overview and Baby Food Brands

3.2.26 SA Baby Food Manufacturers: Tiger Brands: Overview: TIGER BRANDS GRAINS DIVISION TURNOVER: 2016 VS. 2017 (IN ZAR MILLION) (Graph)

3.2.27 SA Baby Food Manufacturers: Tiger Brands: Baby Food Brands

3.2.28 SA Baby Food Manufacturers: United Pharmaceuticals SAS: Overview

3.2.29 SA Baby Food Manufacturers: United Pharmaceuticals SAS: Baby Food Brands

TABLE OF CONTENTS

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4. South African Baby Food Industry Retail Analysis (25 pages):

4.1 South African Baby Food Retail Overview (17 pages)

4.1.1 SA Retail Overview: NUMBER OF STORES PER PHARMACY AND RETAIL OUTLETS: 2017; LEADING RETAIL PRODUCT PRICE ANALYSIS: CONDUCTED

OCTOBER 2017 (Graph and Table)

4.1.2 SA Retail: Baby Boom: Overview

4.1.3 SA Retail: Baby City: Overview

4.1.4 SA Retail: Babies R Us: Overview

4.1.5 SA Retail: Clicks: Overview: PERCENTAGE CONTRIBUTION TO TOTAL SALES OF CLICKS PER HEALTH AND BEAUTY SALES CATEGORY (6 MONTHS

ENDED 28 FEBRUARY 2017 (Graph)

4.1.6 SA Retail: Clicks: Baby Food

4.1.7 SA Retail: Durbell: Overview

4.1.8 SA Retail: Dis-Chem: Overview

4.1.9 SA Retail: Dis-Chem: Baby Food

4.1.10 SA Retail: Massmart: Overview

4.1.11 SA Retail: Massmart: Baby Food

4.1.12 SA Retail: Pick n Pay: Overview: GROUP TURNOVER: 2015-2017 (IN ZAR BILLION) (Graph)

4.1.13 SA Retail: Other SA Retailers

TABLE OF CONTENTS

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4. South African Baby Food Industry Retail Analysis (25 pages):

4.2 South African Baby Food Pricing Analysis (8 pages) (conducted w/c 2 October 2017)

4.2.1 SA Baby Food Pricing Analysis: Bokomo Pronutro Toddlers; Bumbles Stage 1 Baby Food Purée; Hey Baby! Mini Rice Cakes;

Hey Baby! Teething Biscuits; HiPP Organic Combiotic Stage 1 Formula; HiPP Organic Creamy Oats; HiPP Organic Stage 1

Baby Food; Holle Stage 2 Formula; Neomino Infant Formula; Infacare Stage 3 Formula; Infacare Juice; Infasoy Stage 1

Formula; Isomil Stage 1 Formula; Kabrita Goat Milk Stage 1 Formula; Nestlé Cerelac Stage 1; Nestlé Jogolino; Nestlé

Lactogen Stage 3 Formula; Nestlé Nespray; Nestlé Nestum Stage 1; Nestlé Nido 1+ Growing Up Milk; Nestlé Peptamen

Junior; Nestlé Pre Nan Infant Formula; Novalac AC Infant Formula; Novalac AR1 Infant Formula; Novalac Hypo Allergenic;

Novalac IT2 Follow-on Formula; Novalac Premium Infant Formula; Nutricia Neocate LCP Infant Formula; Nutricia Nutilis

Powder; Nutricia Pepticate Infant Formula; Nutrikids A+ 1+ Growing-up Milk; Olli Munch Bars; Olli Rice Bites; PediaSure

Complete; Purity First Foods; Purity Seconds Foods; Purity Good Nights Pear Concentrate; Purity Cream of Maize Porridge;

Purity Junior Flavoured Milk; Purity Junior Instant Oats; Purity Junior Noodles; Purity Junior Biscotti; Purity Junior Rusks; Purity

Junior Soft Muesli; Purity Organic Rooibos Tea; Purity Juice Concentrate; Purity Squeeze; Purity Teething Biscuits; Purity

Wholewheat Cereal 3; Similac Total Comfort Stage 1 Formula; Squish Fruit Purée; Wyeth S-26 AR Gold; Wyeth S-26 Comfort

Gold; Wyeth S-26 Stage 1 Formula.

- Comparative Pricing at Retail Outlets: Dis-Chem, Clicks, Makro, Baby Boom, Baby City and Babies R Us.

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