KEY FACTORS SHAPING THE INFANT FORMULA MARKET Infant Formula Market - The Key Market for Dry Whey Products Different protein compositions between human breast milk and cow’s milk, in terms of whey-to-casein ratio, are added to infant formula products by the manufactures. The key whey ingredients used are demineralized whey powder, whey protein hydrolyzate, and whey protein concentrate, which is mostly used in special infant formula. This use of whey in infant formula is anticipated to grow in the coming years to meet the specific need of the consumers. Packaging Innovations to Benefit the Market The DMK Group (Germany’s largest dairy cooperative) has surveyed mothers across seven countries about infant formula packaging that offers better safety, the convenience of use, protection against bacteria, also a perfect dosing system. These improvements brought about the manufacturers in packaging impels an increasing number of mothers to buy the infant formula. Besides this, pouches are used as packaging for infant formula which is convenient for baby self-feed. These pouches also act as a more attractive proposition for customers looking for innovative and convenient infant nutrition products.

INFANT FORMULA MARKET STRUCTURE ANALYSIS The global infant formula market represents a fairly combined competition landscape. Leading players primarily focus on research and development to introduce new products. Furthermore, these manufacturers maintain strong distribution partnerships to expand their global footprint. Some of the key players in the infant formula market are Nestlé S.A., Abbott Nutrition, Groupe Danone, Mead Johnson Nutrition, The Kraft Heinz Company, Beingmate Baby & Child Food Co. Ltd., Meiji Holdings Co. Ltd, Synutra International, Inc., Pfizer Inc. and Friesland Campina, and many other small players.

For strengthening their foothold in target markets, infant formula manufacturers will continue to trust in a number of strategies such as product development, mergers and acquisitions, research and development, and innovation.

Portfolio expansion is also recognized as one of the key strategies adopted by manufacturers of infant formula to cater to different segments of consumers on the basis of age group.

The organic baby products market is growing at a fast pace due to increasing concern of mothers towards their baby’s health.

Rapid urbanization around the world has encouraged the adoption of convenience-oriented lifestyle and is thus considered a chief driving factor of the infant formula market.

Value addition by players in the category of ingredients and technology has improved the quality and function of infant formula. It has also enabled the companies to acquire a larger section of consumers. Advancement in the lipid technology by the manufactures, add predominant energy source for infants and play important role in the growth of the infants.

Nearly Half the Revenue Share is Gobbled by Starting Milk Formula A plethora of infant formula options are available on market today, which is mainly attributed to a number of new players entering the infant formula market. To stand out from the competition, leading players in the market are innovating towards improvement of infant health at different stages of growth. Among various types of infant formula products, the demand for starting milk formula remains significant. Global sales of starting milk formula currently accounts for more than 48% share of the market value.

APEJ Captures over 50% Market Share While the consumer perception about the importance of infant formula in toddlers’ health remains significantly positive in developed regions, the market scenario is even more positive in developing economies. Asia Pacific excluding Japan (APEJ) holds nearly half the revenue share in the infant formula market, surpassing the collective share of North America and the Europe Union. Furthermore, with the increasing population in fast developing Asian countries such as China and India, the market for infant formula will witness incremental growth, particularly in APEJ.

Organic Infant Formula Gaining Traction Growing awareness about factors influencing infants’ health and the importance of micronutrients in promoting growth is triggering market players to introducing better products. Parents are becoming more critical about their purchasing decisions vis-à-vis infant formula, with increasing inquisitiveness about the use of various ingredients in these products. In order to sync with the rise in parents’ consciousness while choosing an infant formula, leading market players are introducing organic products, manufactured exclusively using organic ingredients. Global brands are zooming in their focus on innovative ingredients to introduce specific health benefits in infant formula.

How Growth will Unfold China and India are commonly perceived as the biggest markets for infant formula products. However, the former accounts for nearly 90% revenue share in APEJ market. Post the 2008 tainted-milk scandal in China, a large number of Chinese parents began to spurn local products, trusting foreign brands of infant formula. However, Chinese government is revising policies to restructure the market within the country, mainly to curb the imports. With an aim to boost local production of infant formula, around half of the country’s demand will be catered to at a domestic level.