Although the fortunes of the baby foods market is inevitably linked to the overall birth rate - which is static or falling - a number of associated demographic trends have worked in its favour. The most important of these is the increase in numbers of women who return to work during their child's first year - this had risen to almost two thirds by the end of the 1980s, from less than one in ten in the early 1970s.

As well as keeping sales of baby milk on a rising curve despite the continuing message from government sources and health professionals that 'breast is best' (difficulties in combining breast-feeding with employment are among the most important reasons for ceasing to do so), sales of baby foods have been boosted by growing demand for convenience - working mothers have less time to prepare home-cooked baby foods.

A parallel trend has been the tendency for women to delay childbirth. It is difficult to ascertain precisely what effect this gradual ageing of the consumer base is having on the baby foods market. On the one hand, their more secure financial position may boost the premium sector; on the other, older mothers may be more discerning, and more demanding, making them more alert to the implications of the various health and ethical issues affecting baby foods.

Recent health scares have included the discovery of phthalates (compounds contained in plastic packaging which have been found to reduce fertility in laboratory animals) in some brands of baby milk, and also research suggesting that soya formula milks could contain dangerously high levels of naturally occuring oestrogens.

There has also been concern expressed about the amount of sugar in some baby foods: baby drinks have been particularly under the spotlight in this respect. Other, more general food concerns such as those centring on pesticide residues, and BSE in beef, have been magnified when applied to baby foods due to infants' greater susceptibility to their harmful effects.

Despite the twin effects of the static birth rate, and the encouragement of breast feeding, the market for baby milks has shown some growth, although the rate of growth has fallen from a 1994 peak. In 1996, the market was estimated to be worth £136.2 million, compared with £132.2 million in 1995.

The market is segmented into infant milk formula (IMF) , which accounted for 76 percent of baby milk sales in 1995, follow-on milk (FOM), with 22 percent, and the small soya milk sector, which took only 2 percent of all sales.

The market for baby drinks is small (valued at around £20 million, less than 7 percent of the total baby foods market), and is declining slowly. This is mainly because there are many substitutes available, including cow's milk (for older babies), standard fruit juices and squashes, and plain boiled water.

Ready-to-serve is the only baby drinks sector to show growth; it now accounts for around 46 percent of the total baby drinks market, approximately the same as the concentrated sector, which has lost ground. Less than 10 percent of the market is accounted for by granulated baby drinks.

The wetchilled baby meals market is another one in which the numbers of working mothers have had an important impact, with the need for convenience contributing to its growth in recent years. This sector has accounted for most of the increase in sales of baby meals over the last three years: sales in 1996 stood at £92 million, an increase of more than 40 percent since 1992.

The main segmentation of the wet foods sector is by packaging type. Jars account for nearly 60 percent of the market, and cans for around a third; the fastest growing segment, chilled meals, still represents well under 10 percent of all sales.

In terms of ingredient type, organic baby food is the fastest growing segment. It was worth an estimated £5 million (around 6 percent of the total market) in 1995 - a year-on-year growth of 70 percent. Growth has no doubt been aided by health scares surrounding BSE and pesticide residues, as well as by the rise in vegetarianism.

The dry baby meals sector has grown less quickly than wet meals, possibly because there is less scope for innovation; a recent COMA report raising the age at which weaning is recommended from three months to four months may also have affected sales. In 1996, the dry baby meals market was worth £53 million, a rise of £1 million on the previous year.

The small baby rusks market (valued at £7.7 million in 1996) has been declining for some years, mainly because of the wide availability of alternatives such as toast, bread and biscuits.

There have been a number of changes in the structure of the baby foods market during the past few years. In 1994, Heinz, the market leader in wet baby meals, acquired Farley's from Boots, giving it a significant presence in both the wet and dry sectors. During the same year Cow & Gate Nutricia (CGN) acquired Reckitt & Colman's Robinson's baby food division, boosting its own position in the dried meals sector.

In early 1996, the acquisition of the German baby food company Milupa by CGNs parent Nutricia was referred to the Monopolies & Mergers Commission (MMC), who gave the go-ahead to the merger later in the same year.

In addition to this activity, a number of own label suppliers (notably Sainsbury and Safeway) have entered the market for baby foods during the past few years, and there has been some branded entry, mainly in the niche sectors of organic and chilled baby meals.

The increasing importance of women in the workforce is likely to be the major factor contributing to the fact that, despite initiatives to promote breast feeding, and despite recent health scares about baby milks, the market will continue to grow. Value will be maintained as brand choice seems to be influenced by perceptions of quality rather than price.

The baby drinks sector, on the other hand, is not expected to thrive, although developments in low- and no-sugar products, and in flavoured waters, may slow the market decline to an extent.

The growth in the wet meals sector is likely to continue, led mainly by manufacturers' innovations. Continuing concerns about food safety will ensure that sales of organic baby foods will show healthy growth. The dried meals sector is expected to lag behind somewhat, although marketing activity by major manufacturers may do something to revitalise sales in the short term. The slow decline in the rusks sector is expected to continue.