Cries from the baby aisle?

January 11, 2013

Lower birth rates, especially among foreign-born women, could exact a price in baby and ethnic category growth.

Record-low birth rates in 2011 follow the nation’s 8% decline between 2007 and 2010, and bear immediate sales implications for supermarkets and the makers of baby foods and baby needs.

During this stretch, foreign-born women experienced a 14% drop in birth rates per 1,000 females of childbearing age between 15 and 44. By comparison, the rate among Mexican immigrants fell by 23%, and the rate of U.S. born-women dipped 6%. F3 anticipates longer-term sales pressure for food and beverage categories that appeal to ethnic consumers.

These are category consequences F3 sees from what appears to be a recession-induced fall in fertility, explored by the Pew Research Center in a recent report.

F3 suggests that stores in ethnic areas size their baby aisles appropriately to the lower demand. The latest all-outlet dollar sales of baby food remain nearly $100 million below the 2009 level, according to Nielsen data for the 52 weeks ended December 22, 2012 (prepackaged, UPC-coded products only).  Dollar sales of $5.37 billion rose 2.5% this past year following annual declines of 4.0% in 2010 and 02% in 2011.

In case birth rates continue to drop, supermarkets throughout the United States should begin to escalate appeals to the tinier market of households adding babies.  Trips are already being squeezed by competing food sellers—and now emerges this challenge of spotting and courting these households.

The overall U.S. birth rate in 2011 was 63.2 per 1,000 women of childbearing age, according to preliminary data from the National Center for Health Statistics. That’s “the lowest since at least 1920, the earliest year for which there are reliable data,” Pew notes. The peak was the Baby Boom rate of 122.7 in 1957. In 2010, foreign-born women had an 87.8 U.S. birth rate, far higher than the 58.9 rate among U.S.-born women.

Of 4.0 million U.S. births in 2010, about 3.1 million were to U.S.-born women and 930,000 to immigrant women.  Preliminary data indicate 3.95 million births in 2011, according to the Pew account. The birth decline among immigrant women lowered their share of total U.S. births in 2010 to 23%, down from 25% in 2007.

“Despite a recent drop in unauthorized immigration from Mexico, the Pew Research analysis found no decline in the number of foreign-born women of childbearing age,” the report says. Pew attributes the birth-rate drop to behavior prompted by economic distress—Hispanic household wealth fell by a greater percentage between 2005 and 2009 than fell in white, black or Asian households.

Nevertheless, Pew projects that “immigrants will continue to play a large role in U.S. population growth.” Those arriving since 2005 and their offspring “will account for 82% of U.S. population growth by 2050.

The report further found that: Most births to U.S.-born women (66%) were to white mothers in 2010, while most births to foreign-born women (72%) were to Hispanic mothers.  Teens accounted for 11% of births to U.S.-born women in 2010, and just 5% of births to foreign-born women, partly due to the age profile of immigrants. Mothers age 35 and older accounted for 13% of births to U.S.-born women in 2010, and 21% of births among immigrants.