Neptune Wellness (NASDAQ: NEPT) Is Capitalizing On High-Demand, Non-Discretionary Organic Baby Food Industry

There are some industries that can withstand economic downturns, continue to succeed and sometimes even thrive. Simply put, these non-discretionary industries are essential, and consumer purchasing behavior for them tends to remain steady. These industries include essential products and services such as healthcare, groceries, pet food, toys and utilities. Since the outbreak of the COVID-19 pandemic and subsequent supply chain effects on the consumer space, the organic food and beverage industry has continued to grow year-over-year at above-average growth rates. Demand has remained high, even as high inflation hit the shelves for many other industries in 2022.  

COVID-19 caused a rising awareness of consumer health information and encouraged the growth of the organic food and beverages industry. The rising health-consciousness trends have continued to expand since 2020; 71% of Americans believe the pandemic taught them to be more observant of their health.

With this rise in health consciousness, the organic food and beverages market has also grown. The global organic food and beverages market was valued at $188.35 billion in 2021 and is expected to have a CAGR of 13% between 2022 and 2030. Despite high inflation in the past year, the market is still growing. 

Within the broader market, organic baby food is a segment in particular that also seems highly recession-proof. Babies will continue to be born, and parents will always need materials to care for them. This can be observed in the fact that baby food also essentially bucked the recession of 2008.

Growing Demand For Organic Baby Food

The global organic baby food market size is expected to continue to grow. In 2021, the market was valued at $3.53 billion, and the market is expected to expand at a CAGR of 8.7% from 2022 - 2028.

The bulk of this growth is due to increasing awareness of the benefits of organic food and rising concerns of parents who are eager to ensure their children get the best nutrients possible. Another reason for the market growth is a rising demand for ready-to-eat baby food. 

Neptune Wellness’ NEPT Sprout Organics, an organic plant-based baby food and toddler snack company, is witnessing increasing demand for microwaveable meals, which seem to be making a comeback. To cater to this demand, Sprout Organics now has a new product line called Mealz which consists of organic ‘heat and serve’ meals for children, expanding the Company beyond the Baby Food aisle.  

With demand for these high-value baby products continuing to grow despite recessions, companies like Sprout Organics are responding to parental concerns with nutritious and convenient products that have no added sugars. As more parents return to in-person work and have an even busier schedule, organic ready-to-eat meals with labeling they can trust will continue to be a sought-after product. More than ever, parents are eager to purchase meals for their children that are grown naturally and chemical-free. 

Featured photo by Tanaphong Toochinda on Unsplash.

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