Brazil is the largest country in South America with 203.4 million1 people. The country's lower- to middle-class population is growing steadily, while the poverty rate continues to decline. Brazil's strengthening economy contracted slightly in 2009 due to the global economic downtown but bounced back in 2010, recording its fastest rate of annual growth in the past 25 years.
Babies and toddlers aged 0-4 years represent 7.5% of the country's total population (15.2 million2), and the Brazilian baby food sector recorded sales of US$1.2 billion in 2010. In the same year, Brazil imported US$13.7 million of baby cereals, flour, starch and milk for retail sale.
The largest category in the Brazilian baby food market is dried food, which consists primarily of cereals and was valued at US$607 million in 2010 (Euromonitor). Bottled products also represent a significant portion of the market, with sales of US$66 million in the same year (Datamonitor). Bottled vegetable-based and bottled fruit-based segments each recorded a compound annual growth rate (CAGR) of over 6% from 2005 to 2010, with predictions that both will grow by around 4% to 2015. This may reflect growing health consciousness among Brazilian parents, following corporate advertising campaigns promoting the importance of nutrition for infants.
Innovation in the baby food industry focused primarily on new packaging options in 2010, both in size and composition. Of the 39 new baby food products launched on the Brazilian market between October 2010 and September 2011, just 9 were completely new products, while new formulations and/or new packaging accounted for the rest.
Euromonitor is predicting that multinational players, who continue to dominate the baby food industry in Brazil, will focus on diversifying their product portfolios to better meet the unique dietary needs of babies (and their conscientious parents). Brazilians are having smaller families, allowing them to focus even more on the nutritional quality of their children's food. Following such trends, milk formula sales are expected to grow faster than other baby food categories in the coming years, especially in formulations for babies under one year of age.
