Global Infant Formula Market - 2021-2028
Infant formula is engineered food that is used as a substitute to human breast milk. It is one of the most complex foods as it requires specific manufacturing capabilities and sophisticated quality assurance protocols. Numerous government organizations such as the Food Safety and Standards Authority of India (FSSAI), World Health Organisation (WHO), and others have specific rules regarding the formulation of infant food to ensure high quality of the product. Stringent regulations regarding the quality of food products are expected encourage consumers to buy new products without hesitation. For instance, in 2019, FSSAI drafted new rules regarding the standards for infant formulae for special medical purposes, premature infant milk substitutes, and lactose-free infant milk substitutes.
Market Dynamics: Growing focus on infant care and nutrition
The fastest growing attention and focus on the nutritional needs of infants is one of the major factors driving the global infant formula market growth. The increase in the number of working female and mothers, coupled with the substantial rise in their discretionary spending has boosted the sales of baby nutrition products. The increasing cases of lactation, medication, lack of support and qualified lactation experts, unsupportive work policies, and cultural norms are some of the attributing factors that can boost-up the product demand. According to the Global Breastfeeding Scorecard, 2019, by World Health Organization, and United Nations Children's Fund (UNICEF), the current rate of breastfeeding remains suboptimal as compared to standard recommendations across the world. There are many cases across the world, where mothers voluntarily prefer infant formula instead of breastfeeding to their children, thus relying exclusively on the market products. Therefore, manufacturers are improvising and innovating their formulations to closely mimic the breast milk composition.
In addition, the global infant formula market is driven by promising demand dynamics such as fertility rates, suboptimal breastfeeding rates indicating the early dependency on the breast milk substitute. The modernization and evolving lifestyles of consumers are also driving product growth. Moreover, the convenience of the product along with compositional enhancement is propelling the demand among the parents.
However, strict rules and regulations concerning launch of new products along with the complicated process regarding the registration of new products are predicted to hamper the product's market growth. Moreover, lower acceptance for premium or high prices products across some developing regions can also be an obstacle for the growth of the market.
Market Segmentation: Infant milk formula segment is expected to be the largest segment with a share of XX% during the forecast period.
The global infant formula market has been segmented by type into infant milk and follow-on-milk among others. The infant milk segment held the largest share as of 2020. The limited availability of convenient and nutrient-defense products is encouraging the manufacturers to develop and bring forth innovative products in market. The rising consumer's prosperity towards their infants and baby milk enables them to afford a diverse range of infant milk formula products available in the market.
The follow-on-milk segment is expected to witness a highest CAGR of XX% in the forecast period. The ability of premiumized follow-on-milk to mimic the nutritive function of breast milk due to its high in protein, calcium, iron and other micronutrients content is predicted to boost the segment growth. Moreover, infants with low iron levels or a poor weaning diet are required extra nutrition from their diet, as a result, the demand for follow-on-milk is expected to increase.
Geographical Penetration: Asia Pacific is expected to dominate the global infant formula market
By geography, Asia Pacific is expected to dominate the global infant formula market in the year 2020, growing with a CAGR of xx% during the forecast period. The regional market is majorly driven by the strong demands emerging from high birth rates. Moreover, the rising awareness about infant care and nutrition is enabling growth in the market, augmenting the infant formula market size in Asia Pacific. The presence of China, which is a major consumer of infant and baby food products in the world is another prominent reason for the region's dominance. China is expected to hold dominant position in the Asia Pacific infant formula market. The elimination of 'one-child' policy and rapid consolidation of the domestic industry are factors creating growth opportunities for the market in China.
North America is expected to hold a significant market revenue share of XX% in the year 2020. The market in North America is expanding owing to the rising focus on value-added infant formulae with the best ingredients and regulatory practices. The intervention from public sector coupled with the efforts from key brands have led to effective penetration of infant nutrition products among almost every households of the country irrespective of varied ethnicity.
The global infant formula market is highly fragmented. Nestle, Danone, Abbott, and Reckitt Beckinser Group are some of the key players in the market. Companies such as Nestle S.A., Danone S.A., and others are embarking on diversifying their product portfolio and base expansion to increase their market reach and production capabilities. Innovations and expansion of business are some of the key strategies adopted by the companies to compete in the global market. For instance, in March 2020, Nestle introduced, single material pouch for its baby food products. In February 2020, Else Nutrition launched 100 precent plat-based, organic toddler formula prepared with a proprietary formulation of almonds, buckwheat, and tapioca. In January 2019, Nestle opened a new research center in Ireland. The center will focus on developing inventions in milk-based infant and maternal nutrition products for the world market. In January 2019, A subsidiary of Arla Foods Amba called Arla Foods Ingredients revealed a new infant formula concept called easy digest whey protein. The company aims to reduce gastrointestinal issues by changing the number of proteins used. In August 2019, Danone Nutricia announced the launch of a new and advanced infant formula called Karicare Toddler. This product is made with pure New Zealand sheep milk.
COVID-19 Impact: Demand for infant formula is steady during the pandemic
The demand for infant formula is steady during this pandemic situation, however, the long-term corollaries are hard to forecast as of yet, owing to supply chain disruptions and negative impact on the global trade of the product. Moreover, the increasing concerns regarding the new born's health as they are at high risk of infection are gravitating parents to opt for premium products which, in turn, boosts the immunity of the baby.
The uncertainty allied with the market situation is making it difficult to predict the market statistics in the future years. The companies operating in the market are embarking on the partnership and digitalization to increase their global presence during this pandemic situation. For instance, In March 2020, The Kraft Heinz company aligned with childcare websites in China i.e., Babytree, to donate approx. 4,000 boxes of the company's infant nutrition to families in need through the Shanghai Fosun Foundation.