South Korea’s market for baby and child products is facing significant challenges as the country’s birth rate continues to decline. The total fertility rate in 2022 was just 0.72, the lowest since records began in 1970.
This decline has had a direct impact on the baby formula market. According to market research firm Market Link, the baby formula market shrank by approximately 24% over the past three years, from 68.9 billion won ($51.2 million) in 2021 to $38.7 million in 2023.
However, there is one segment that is thriving despite the overall downturn: the baby food market. According to the Korea Agro-Fisheries & Food Trade Corporation, the market for ready-to-eat infant meals has more than doubled, growing from $50.6 million in 2015 to $124.3 million in 2020. Projections suggest that by 2025, the market could reach $247.8 million.
S. Korean retail giants such as Lotte Mart, E-Mart, and Homeplus have reported increasing sales in this market. Homeplus saw a 17% increase in baby food sales in 2023 compared to the previous year, while Lotte Mart and E-Mart reported increases of 15.0% and 12.7%, respectively.
Baby food refers to foods given to infants after they are 5-6 months old, as they transition from breast milk to solid foods. Despite the overall decline in birth rates, the baby food market is growing, leading to questions about what distinguishes it from the shrinking formula market.
One major factor is the change in parenting philosophies. In the past, there was a strong belief that parents should personally prepare their child’s first foods, as it was seen as a measure of care and effort. Parents often made baby food at home, ven when it was time-consuming and labor-intensive.
However, this attitude has shifted. There is now a growing belief that using the right baby care products is key to successful parenting. Many parents now prioritize spending quality time with their children over the time-consuming task of making baby food from scratch.
Joo Geon-woo, a buyer in the dairy category at E-Mart, said, “The increase in baby food sales isn’t just because more households have dual incomes. It’s also because there’s less stigma around buying commercial baby food, as more parents see it as part of a balanced approach to happy parenting.”
Additionally, buying commercial baby food can be more economical. For example, a ready-made baby food product rich in meat and mushrooms for a 9-month-old cost around $2.22-$2.46 per 100g. In contrast, buying organic shiitake mushrooms and premium beef to make baby food at home would cost significantly more, and parents would be limited in the variety they could offer their children.
Kim Jin-ah, head of the Infant and Toddler Food Division at Soonsoobon, explained, “If you buy the ingredients yourself, you end up making a large batch of baby food, but for the same price, you could buy a variety of store-bought baby foods that expose your child to a wider range of ingredients.”
Nutritionally, store-bought baby food can also have advantages. Companies that produce baby food often provide balanced meal plans designed to ensure infants receive a wide range of nutrients. The Maeil Asia Human Milk Research Institute noted that while homemade baby food can lose nutrients during cooking, commercial baby food is often fortified to maintain a balanced nutritional profile.
Also, the baby food market is expected to continue growing as more consumers embrace the idea of buying ready-made baby food. Additionally, the market faces little competition from foreign brands.
Traditionally, In the market for baby and child products, imported brands often carry a premium image, appealing to parents who seek the highest quality products for their children.
However, the baby food market is different. Parents prefer additive-free or organic products, which are harder for imported brands to provide. For instance, Gerber, a major international baby food brand, withdrew from the Korean market after struggling to compete and eventually ceased operations again in late 2022 after a brief return in 2015.
