Industry Insights
The global infant formula market was estimated at USD 44.26 billion in 2017 and is expected to grow at a CAGR of 9.35% from 2017 to 2025. The market growth is primarily driven by the increasing working women population in middle-class families across the various geographic regions such as North America, Asia Pacific, Middle East and Africa, Central and South America.
The infant nutrition market encompasses a wide range of products ranging from various baby food products to infant formulas. The demand for these products is primarily witnessed in mature markets such as China, U.S., Europe, and Japan. The growth of the global market is supported by the rising consumer affluence and increasing working population among women. The global infant formula market is highly profitable thereby representing as one of the fastest growing packaged food products worldwide. Majority of the demand is generated in Asia Pacific countries such as China, Vietnam, Hong Kong, and Indonesia. These countries are anticipated to be the leading markets contributing to the growth of global industry.
The World Health Organization (WHO) recommends breastfeeding owing to its nutritional benefits. However, due to various reasons such as lactose intolerance among the infants and lack of time among the working women, the manufacturers are focusing on enhancing the nutritional content of infant formula to substitute breastfeeding. For instance, brands such as Enfamil contains a high level of DHA, AHA, Iron and other ingredients will render strong immune system. Also, as per the consumer survey, approximately 92 million infants below six months of age and two out of three babies are either fed with breastmilk mixed with other foods or formula milk.
Segmentation by Product Type
• Infant Milk
• Growing-up Milk
• Follow on Milk
• Specialty Milk
The infant milk segment is expected to dominate the market. The segment is expected to grow at a significant CAGR over the study period. Additionally, rising working women population, awareness about infant health and nutrition by various health organizations in the Asia Pacific region, U.S. and Europe are driving the demand for infant milk segment in the coming few years.
The consumption rate of the growing-up milk segment is notably moderate as it is developed for infants of age groups between 12 months to 3 years. Well-established players such as Nestle offers the majority of the types of nutritional formula for infants. The market players ensure high accessibility and availability of the desired type of formula milk. Additionally, these products are offered based on the age and health conditions of the babies. Such factors drive the demand for growing-up, follow-on and specialty milk formula segments over the forecasted period.
Segmentation by Distribution Channel
• Supermarket and hypermarket
• Pharmacies
• Online
Pharmacies contribute majority of the revenue share of the global market, thereby accounting for more than 70% in 2017. This scenario is attributed to the assurance of safety standards and consumer trust in this distribution channel. For instance, The China Association of International Trade under the Ministry of Commerce had announced in 2015 that all domestic and foreign infant formulas will be distributed among 20 pharmacies across Beijing and Jiangsu, as a pilot initiative which will later be extended to around 20,000 more pharmacies across 500 cities.
The supermarket and hypermarket channels represents a significant share in the global market. For instance, the Mum and Baby Store channel in China has the largest sales of these products through its offline channel and was estimated to account for about 50-60% of total milk formula sales in the country. Whereas, e commerce channels accounted for approximately 20-25% of the market share.
Segmentation by Region
• North America
• U.S.
• Europe
• Germany
• Asia Pacific
• China
• India
• Japan
• Central and South America
• Middle East and Africa
Established markets such as Europe, U.S. and Japan represent the largest market for infant formulas. For instance, countries such as China and India accounting the 54% of total market. In these regions manufacturers started focusing their product development, manufacturing and promotional activities.
Apart from increasing working women population within emerging nations, this causes, driving the demand of infant formula market over the forecasted period pertaining to the lack of option for breast milk. The industry is not only increasing at a rapid pace but also seems strong to global downward trends. China is the largest and fastest growing segment in this market on accounting 43% and other Asia pacific countries accounting 22% total share in 2015. For instance, increasing women population and awareness of infant health and nutrition driving the market in china. China is implementing some stringent rules and regulation from Jan 2019 pertaining to the quality and safety standards after the melamine scandal in 2008.
In Europe, Germany is the largest growing market for infant formula. Almost 70% of women are working full time or part time in the industry and at various platforms. This is the main driving factor that shows the growth of the market over the forecasted period.
Competitive landscape
Key players operating in the global market include Abbott, Arla Foods Amba, Dana Dairy Group Ltd, Nestle S.A., Campbell Soups, HiPP GmbH & Co. Vertrieb KG, Reckitt Benckiser (Mead Johnson & Company LLC), Danone,The Hain Celestial Group to name a few.. The manufacturers are concentrating on expanding their penetration in the market by providing highly efficient products as well as safe products. Major players are concentrating on tapping the potential market where planning strategy to enter in emerging market.
