DIFFICULT DECISIONS FOR FIRST-TIME PARENTS

In June 2023, the total market for Baby Care started to decline versus the period January to June 2022. At a topline level, total market value remained flat year on year but continued to be 8% behind its preCovid position in 2019.

Volume sales continue to decline, dropping 9% when comparing January to June 2023 against the same period last year. Volume is now 26% behind 2019.

The average price for a Baby Care product continued to rise, up 10% versus 2022. However, not all of this increase is due to inflation as consumers shift to premium brands and products.

The majority of the volume in Baby Care is still purchased instore, but only 51% of the value is accounted for by these purchases.

In-store value was up 41% in the last six months, online value was also up, but only by 12%.

In-store volume is falling slower than online, down 6% while online has declined 8% year-on-year.

FIRST-YEAR COSTS

It is well known that having a baby is expensive and for first-time parents costs can quickly mount. The average price for basic supplies in year one of a baby’s life as tracked by GfK totals approximately £1,705. This is based on average prices over the last six months, which is up 6% on the same period in 2022 - not quite as high as we report at a total market level for a baby product.

This is the cost for one child (based on products for newborns and the first year of life: 10 bottles with teats, a car seat with a base, a highchair, baby monitor, eight soothers, two teethers, bottle warmer, bottle sterilizer, stroller, breast pump, three tubes of nipple cream and nursing pads three a day for 180 days). This figure excludes the nappies, clothing and furniture that parents will also need to buy. The most expensive items are a car seat and a stroller. However, basic supplies to care for and protect mum can also quickly add up if you are using disposable nursing pads and nipple creams.

When The Second Baby Comes Along

Having a second child increases costs further, but not all products may need to be purchased again. Clothes, furniture, and even items such as soothers and bottles can be reused. However, parents may need to purchase additional car seats which could be costly if a second base is also required. This alone can increase costs by up to 50%. Parents may also choose to change their current stroller to a double - or may just want to have an additional stroller which will increase prices again.

UPGRADING TO THE ‘BEST’

Parents also have a number of other factors to consider. When purchasing car seats for any height/weight, parents will pay on average 104% more to upgrade from an R44 seat to an R129. To scale up from a digital audio-only baby monitor to a smart monitor with app compatibility comes in at an average of 460% extra. The move from plastic to alternative materials like wood and silicone can also be very costly. Prices for eco-friendly highchairs are 167% higher, and shoppers can expect to pay 71% more for ‘green’ tableware and 192% more for teethers.

Outlook For The Rest Of 2023

For the remainder of the year, GfK expects the market to decline in terms of volume. Value will remain stable if price inflation continues, but as we approach the end of the year, we forecast value to decline. Premium products and brands will continue to be popular with consumers, and we expect spending at this end of the market to continue, especially if parents want the best money can buy.

Sustainability Shaping The Future Of The Toy Industry

The Insights Family looks at how eco-conscious parents are driving a significant transformation in the toy industry as they increasingly prioritise environmentally friendly products, compelling manufacturers and brands to re-evaluate their practices.

The prevalence of sustainability as an attitude among parents has propelled the ascent of sustainable toys, emerging as a defining trend that will undoubtedly shape the future of the toy market. This article talks about the remarkable impact of this shift on children, exploring the growing popularity of sustainable toys, and charting an insightful trajectory for the industry's progression towards a greener, more sustainable industry landscape.

A significant shift in parental attitudes is evident, with environmental concerns now ranking amongst their top ten worries, according to Kids Insights data from June 2022 up until July 2023. Our Parents Insights UK data in Q2 reveals that 15% of parents with children between the ages of 3-5 expressed their concern about environmental issues, representing a +4% increase in

Q2 of this year when compared to the same quarter last year. Our Parents Insights UK data also reveals that while purchasing products, 48% of parents of 3-5s, in the past year, stated that they considered eco-friendliness as a preferred criterion while making shopping related decisions.

Interestingly, preschoolers (3-5) in the UK demonstrated a growing concern for the environment. Our Q2 data shows that the environment is currently the eighth biggest concern for 3-5s in the UK (9%). When comparing both genders, our data reveals that girls (52% of 9%) are slightly more likely to express environmental concerns when compared with boys (48% of 9%), when considering Q2 of 2023.

According to Kids Insights data, in Q2 2023, 38% of children in this age group have expressed awareness of the impact of their actions on the environment. The data further reveals that such environmental concerns saw a

+17% increase in Q2 compared to Q1.

Recognising the importance of sustainability and responding to market demands, several toy companies are taking bold initiatives. For instance, LEGO is one of the many companies announcing its plans to use recycled materials from plastic bottles in the manufacturing of toys. LEGO’s 2025 Strategy for sustainability by mandating all packaging to be of renewable or recycled materials also showcases a visionary approach to a greener future. This is significant given the immense popularity of LEGO among kids. According to Kids Insights UK data, LEGO has maintained its position on top, being the most favourite toy to play with for 3-5s in the past year.

Similarly, Mattel is also making significant strides towards sustainability. Last year, Mattel announced its Goal to Reduce Plastic Packaging by 25% per Product by 2030. According to our Kids Insights data Barbie ranks on the top (12%) as the new toys preschool girls (3-5) would like to own, when considering data from Jan 2023 onwards up until now. Similarly, Hot Wheels is among the top five new toys that boys 3-5 would like to own in the same time period.

A commitment to sustainability and adoption of responsible practices is expected to become more ubiquitous in the toy industry in the near future. As more and more families prioritise ecofriendly products, the industry is poised to undergo a transformative shift. Toy companies must continue investing in research and development to discover innovative materials and manufacturing techniques that reduce environmental impact. Moreover, technology offers exciting opportunities for sustainability in the toy industry. Augmented reality (AR) and virtual reality (VR) toys can provide immersive experiences without excessive use of physical materials. These innovative toys can spark children's creativity and learning while significantly reducing waste.

The Insights Family is the global leader in kids, parents, and family market intelligence, providing real-time data on attitudes, behaviours and consumption patterns.

Sign up to receive our latest Industry Knowledge report discussing the growing influence that British kids have over family spending here: https://go.theinsightsfamily. com/kids-influence.

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Product And Marketing Director