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There's nothing like greater demand to boost revenues, and that's exactly what the baby-food category has been experiencing of late; having children is proving a popular pastime.

Not only are rising birth rates (2007 was the highest since 1980) fuelling sales of baby food and milk, but concerted product development by manufacturers - especially among the smaller players - has ensured wider use.

In 2008, sales increased by an estimated 14%, according to Mintel, to reach a total of £456m. Although lower price inflation will bring growth back a little, it is still expected to be 8% in 2009 (or a 54% increase since 2004), to take the value to an estimated £491m by the end of this year.

Breast-feeding rates inevitably affect milk sales and, while government initiatives to encourage more women to breast-feed appear to have had an impact, only about a third of mothers are still doing so by the time their baby is four months old. This is despite the research pointing to the health benefits to infants of being breast-fed.

Another external impact on this sector was the revised recommended age at which babies should be given solid food in the UK. This was increased to six months in 2003, in line with the World Health Organisation's guidelines.

Baby milk value sales have increased across follow-on, growing-up and ready-to-feed (RTF) variants. Global dairy price inflation also contributed to the rise, as has the government's Healthy Start scheme. The latter began in 2006 and under it vouchers to purchase milk in retail outlets are now distributed to less well-off mothers, as opposed to the previous system, whereby the vouchers could be redeemed only through clinics.

One category in which new product development has been particularly prevalent has been finger foods. Rusks were once the only such option for babies, but manufacturers have introduced a raft of items over the past few years, from flavoured rice cakes to puffed-wheat snacks. Parents have been encouraged to include such
foods in their infants' diets as they
are known to help the development
of hand-eye co-ordination and encourage independent eating.

With parents keen to provide only the best for their children, organic sales have traditionally done well in this sector and now account for about a fifth of all baby foods. Although particularly well-placed in the finger-food category, they have made less headway in the milk market.

The number of mothers over the age of 30 is rising; they tend to be more informed, particularly about issues such as baby nutrition, and better off. This affects the market, as they often demand more transparency, quality, provenance and information about the food they are feeding their infants. 

There is high brand loyalty in this sector, often determined by babies' preferences, and the top five manufacturers account for 96% of
the market. Nutricia is the leading player here, and has improved its standing in recent years to take 39% market share with its brands Cow & Gate, Aptamil and Milupa.

Heinz's market share has been eroded. Its decision to drop the Farley's milk brand in favour of the more expensive Nurture brand was not embraced by consumers, despite advertising support behind the launch.

There have been notable entries from niche, premium brands in this market that in effect tap into affluent parents' desire for top-quality, closer to home-made-type foods such as Babylicious, Plum Baby, Ella's Kitchen and Little Dish.

In many ways, this market is relatively recession-proof, as parents are often unwilling to cut back on items related to their babies' health and wellbeing. Home-cooked food
is seen as superior by many, and often, it is also a cheaper option. However, with three-quarters of mothers working, the need for convenient
baby food remains a priority.

Brands have also been extending into toddler meals to prolong their relationship with customers.

Over the next five years the market is expected to grow by 23%, taking its value to £605m, according to Mintel.