Dive Brief:
- Walmart has partnered with veteran baby food brand Gerber to launch an exclusive line of baby and toddler food focused on freshness and transparency. The line — called Freshful Start — will launch in 50 stores in Texas, Missouri, Arkansas and Kansas this week, according to the Dallas News.
- Gerber's Freshful Start will include purees, bowls and entrees that are ready to heat and eat. It also includes ready-to-blend fruits and vegetables for parents that prefer to make their own food. There is a total of 15 choices of products priced between $3.98 and $5.98, and each have two servings.
- "We're trying to provide an alternative to making homemade baby food. Having to peel, chop, puree and store baby food is not always practical in today's world," Gerber CEO Bill Partyka told Dallas News. "It's a test. We need to prove the concept with a major retailer."
Dive Insight:
By partnering with Gerber to sell its Freshful Start products and deliver them, Walmart has a chance to be seen as not just a discount retailer, but one that values the growing importance of fresh food for children.
Another access point is having an exclusive partnership — something many retailers, including Target and Dollar General, have pushed in recent years. This deal gives Walmart exclusive access to Gerber’s new line, which means if brand-loyal consumers want to try the products, they will have to turn to Walmart. Not only does this deal put pressure on major competitors, but it also puts it on the growing number of smaller regional stores.
Although the U.S. birth rate has been steadily dropping over the years, the highly competitive baby food industry is expected to reach $76 billion by 2021, according to Statista, and is projected to become one of the fastest growing food and beverage sectors. It’s key that Walmart enters this sector when it’s hot, and has exclusive access as well as the convenience factor of grocery pickup to give it the edge to resonate with the product’s targeted shoppers.
The Dallas grocery market offers an interesting glimpse into the potential of this exclusive deal. The market has become very competitive, with Kroger, H-E-B and Amazon-owned Whole Foods building market share. Whole Foods fresh, natural products appeal to the growing number of young families in the Dallas area, while Kroger's Simple Truth line offers baby products that appeal to this same demographic.
As of last year, Walmart had 28% of the local Dallas market, while Kroger had 14.8% and Whole Foods a mere 2.5%.
Dallas started a “Say Yes to Dallas” campaign last year, which encourages young professionals to move to the city ranked as the second most affordable metropolitan area, according to Census Bureau data and seventh in the percentage of millennials per population, according to the local D Magazine. Younger shoppers tend to prioritize healthy eating, especially for their children and in many cases puree the food themselves. This partnership opens that door for Walmart at a time when parents want to be confident they're feeding their babies nutritious foods.
One advantage Walmart has is the combination of its new Gerber products and its decision to include them at all Walmart locations in Dallas that offer grocery pickup. This could be seen as an attempt to compete not just against other retailers, but against startups like Pure Spoon, Little Spoon, Nurture Life and Yumi — similar to an adult’s meal kit — many of which are based in the Dallas area.
