THE BABY BUSINESS

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Every hour of every day, an estimated 460 babies are born in this country — roughly 4 million a year. Although that number hasn't changed much in the past 15 years, demographers believe we're on the cusp of another boom. Many expect the number of births in the U.S. to soar to levels higher than those recorded at the peak of the Baby Boom, thanks primarily to two key drivers: the wave of Gen Y women (born between 1977 and 1994), who are entering their prime child-bearing years; and the growing number of Hispanics, who, on average, have more children than white, black and Asian families. Parents of the next boom of babies are expected to be a bit older — and more established — than those in past generations, due to the trend of later-in-life pregnancies. According to the National Center for Health Statistics, births to teen mothers have fallen to historic lows, while births to women in their late 40s are double what they were in 1990. Industry analysts are seeing signs of this wealthier parent group. Sales of specialty toiletries for infants are expected to grow more than 20 percent annually through 2006. Nothing but the best for baby.

KIDS' STUFF

Last year, consumers spent $8.6 billion on baby furniture, including cribs, mattresses, high chairs, strollers and baby gates. Stores like Target captured the lion's share of the purchases.

BEST-DRESSED BABIES

The average U.S. household will spend an estimated $136 on infant apparel this year, but residents of Bethesda, Md. will shell out more than twice that amount.

CITY ESTIMATED AVERAGE SPENDING ON BABY CLOTHING IN 2003
Bethesda, MD $300
Newport Beach, CA $297
Palo Alto, CA $295
Cupertino, CA $284
Newton, MA $282
U.S. average $136
Source: ESRI Business Information Solutions, 2003

AH-CHOO!

Usage of select baby remedies by parents with infants (younger than 1 year old).

PERCENT WHO USE THE PRODUCT NUMBER OF TIMES PER MONTH PRODUCT IS USED
Baby ointments 61% 28.8
Teething remedies 34% 16.0
Cold remedies 45% 5.4
Cough remedies 44% 5.0
Pain relievers/fever reducers 73% 5.6
Source: Mediamark Research, Inc., 2002

THE NEW JUICE

In the past 5 years, sales of juice for babies have declined by 20 percent, while sales of infant electrolyte beverages, like Pedialyte, have more than doubled.

WHAT GOES IN …

American babies soiled 16 billion diapers last year, at a cost of $4 billion.*

UNITS SOLD SALES
Diapers (total) 16 billion $4 billion
Baby wipes 11 billion $354 million
*Sales figures are for products sold by grocery stores, drugstores and mass merchandisers in the 52 weeks ending Jan. 25,2003. Baby wipes figures do not include sales at Wal-Mart.
Source: ACNielsen

PAMPERED TOTS

Prestige brands making their foray into the baby toiletries market are expected to boost sales in the specialty segment by 21 percent annually through 2006.

ANNUAL BABY TOILETRY SALES (IN MILLIONS)

2001 EST. 2006 CAGR*
Mass brands (i.e., Johnson & Johnson) $432 $472 1.8%
Specialty brands (i.e., Estée Lauder, Origins) $29 $76 21.3%
*Compound annual growth rate
Source: Datamonitor

IT'S ORGANIC

Sales of organic baby foods are expected to more than double by 2006.

2001 EST. 2006
Annual sales (in millions) $51 $115
Share of baby food market 5% 12%
Source: Datamonitor
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