The baby care market is composed of a variety of different product segments whether they be toys, feeding, grooming, care, and more. This article will cover:
The financial landscape of the baby industry
Addressing the biggest threat to the baby care market
Baby Products you should be making or selling
By the end of this article, you will be equipped to invent, sell, and market to customers in the baby market. Let's get rocking!
Baby Booming
Baby care products continue to be a massive industry despite the relatively short customer life cycle. Below are some fast facts about the baby industry:
The global market cap of baby care products is $67.35B
The U.S. market cap is estimated at $1.7B in 2021
CAGR is projected to be 6.2% in China, 4% in Canada, 3.2% in Europe, and 2.8% in Japan.
The top-performing products in the west continue to be diapers and food/formula, where an emphasis on organic, natural, and sustainability is pivotal.
The Baby Problem
There's a giant elephant in the room that must be discussed. We all seem to know about it but no one has the stones to talk about it. We will.
The birth rate is declining at alarming levels.
The general fertility rate in the United States in 2020 was about 55.8 births per 1,000 women, down 4% from the rate of 58.3 births in 2019 and another record low for the nation. There's no doubt that COVID-19 has played a role in the sharpest decline of birth rates in decades.
"I think a combination of fear, economic insecurity, families dealing with actual infections and recovery, disruptions in health services and other factors likely contributed to the decline." - Scott Sullivan, OBGYN Professor
But the reality is this isn't just a COVID problem. When the birth rate dropped in 2020, that was the sixth consecutive year with fewer babies born in the US. While there's no doubt that anxieties over health, economy, climate, and politics all play a part in the declining birth rate, another driver is the decrease in teenage pregnancy over the last 3 decades.
So what's the solution to a declining market? We have outlined the three most important things your business can start doing RIGHT NOW to combat this down-trend.
Focus on increasing the LTV of your customers by creating a suite of products that cover the entire lifecycle from fertility, pregnancy, and infancy into childhood. You've now tripled the lifecycle of a customer.
Make it a marketing mission to build a community. Whether it be on Facebook, YouTube, or a mommy blog, having an ecosystem of like-minded people who care about your mission will create larger returns than any ad campaign can.
Market to Millenials and Gen Z and directly address their fears about having children. Bringing a child into a world with climate uncertainty is scary. Talk about how your company could be directly working to combat this. If your company can be the one who helps calm their objections, and you're the reason their new baby is born, you will have a customer for life.
Trending Baby Products
With the most depressing part of the article behind us, now let's get to why you're actually here. What are the products you need to be making and selling? We've outlined some of the top products that are currently trending for 2022 and are projected to increase in the future.
Each product trend we show will have a number in the top right of the graph. This is called a Keylitic Score. The Keylitic Score is an algorithm that analyzes multiple variables and predicts the potential of a product on a 1-10 scale. The higher the number, the higher the potential. If you want to learn more about the Keylitic Score formula you can do so here. Generally speaking, anything with a score of a 7 or higher is a trend worth exploring further.
Baby Probiotics (8.5-10)
Everyone wants a healthy baby. That's obvious. What may not be so obvious, are the demands in the market to help babies achieve optimal health. A massive trend in the overall health industry right now is probiotics.
While the science is still developing, it's become increasingly evident in the medical literature that the microbiome is largely set from birth and the first few years of life. Having a healthy microbiome at a young age could be a key variable to a long and healthy life. There is still MUCH to learn, and many companies have probiotic supplements that make bold claims and have claims that aren't FDA approved. Despite the infancy of probiotics (pun intended), more parents are turning to them for a variety of acute conditions. Below is an output from Keylitic which looks at longtail keywords to help analyze and understand use cases with every product trend.
We can see that parents are using probiotics to help with thrust, constipation, gas, reflux, colic, diarrhea, and even allergic diseases like eczema. Following the first point we made in increasing LTV, it would likely be very lucrative to develop a line of probiotics that are tailored for certain ages based on medical literature. Could there be medicinal strains of probiotics and natural ingredients that would be beneficial for fertility, pregnant women, babies aged 0-2, 2-4, and so on? Consulting GI specialists, scientists, and existing medical literature could help uncover a product line worth hundreds of millions.
While the search volume for baby probiotics is still relatively low (we estimate about 5.2K a month at the time of this article) there is a clear trend that demand will be increasing over the next 5 years and penetrating this space early could be key.
Designer Baby Clothes (8/10)
Let's be honest, one of the main benefits of having a baby in 2021-2022 is being able to flex your cute baby on Instagram. And now that younger parents are emphasizing the health of their baby, they might as well look the part too.
We decided to look into designer baby clothes using Keylitic after our database of trending products had shown a variety of high-end mass-market brands like Uggs. Using Trend Explorer, a new feature on Keylitic that allows you to find trends based on your keyword, we entered "Designer baby clothes" to see if this was a trend.
We discovered that there had been a gradual increase in the demand for designer baby clothes over the last several years and the Keylitic Score was a strong 8. While there are a variety of designer brands to choose from, the results that showed up using Trend Explorer were Gucci and Burberry.
Armed with this information, this can be a great opportunity for businesses in the reseller market. Apps like Poshmark are a great option for sellers to leverage if these items can be thrifted and resold. Furthermore, establishing a new designer brand with an emphasis on health and sustainability could be a lucrative opportunity.
Smart Baby Products/IoT Baby Products (7.5/10)
As buzzwords like "interconnected" and "metaverse" fill everyone's consciousness, you can expect to see trends like this continue to grow in the baby sector. Are we talking full-on babyverse? Not exactly. However, when we went to explore the IoT market using Trend Explorer we found some trends worth jumping on now that are still in their infancy (pun intended again). We searched "smart baby" just as an example and discovered that demand for smart cribs, gates, monitors, and more have all been on the rise year over year.
What's exciting is that the search volume for these types of keywords is still pretty low. While there are some fairly established brands in this space already such as Nanit, SNOO, and others, there's a great opportunity to break into this space with an innovative product.
Closing Thoughts
While the shrinking birth rates across the globe are going to be a somewhat limiting factor to industry growth, there are still many exciting trends to jump on in the baby industry.
This article identified probiotics, designer baby clothes, and smart products as three hot trends your business should focus on in 2022 and beyond. However, this is barely scratching the surface.
At the time of writing this article (November 2021), Keylitic has identified 390 product trends relating to the baby industry on our trends database called Industry Trends. Additionally, there are likely way more trends waiting to be uncovered using Trend Explorer, our new tool that hunts for trends based on what you search.
If you'd like to simplify and expedite the product research process you can either click "LEARN MORE ABOUT KEYLITIC" to learn how Keylitic works or if you want to give Keylitic a try click the "SIGN-UP" button where you can try Keylitic free for the first 7 days.
Keylitic also conducts individualized market research reports on any CPG/consumer industry you can think of. Want our team to handle research, product development, and marketing? Learn more about our service scope here.