Infant formula – what are the prospects?

According to the international food marketing and research body Gira, the global infant formula market was estimated at 2.7 billion tonnes in 2017.

It is expected to grow by 4% per annum from 2017 to 2021. The biggest market is China, followed by south-east Asia.

The double-digit growth seen in China in the last 10 years will slow down. But from 2017 to 2021, south-east Asia and China will still see the biggest growth in terms of additional volume.

Middle-east and north Africa countries will be in the third position but the volume growth will be much smaller compared to the former two regions.

The EU will maintain its position as the world’s largest infant formula producer and exporter; especially the Netherlands, France, Ireland and Germany.

A lot of the global growth in infant formula production will come from Chinese companies investing in production capacity outside China.

Commenting on the projected slowdown, a Gira representative said: “This trend will concern almost all major producing regions but is expected to be stronger in Europe and in China.

By type of product, first stage and second stage infant formula products each account for about 30% of the total production, and third stage infant formula products’ share is slightly higher than 40%.

The main infant formula producing countries within the EU are France, the Netherlands, Ireland, Germany, Spain and Poland.

About 60% of EU production was exported outside the region in 2017. The most active companies are Danone, Nestlé, Abbott and FrieslandCampina.

Chinese companies have also invested in ingredient and infant-formula production capacity in France and the Netherlands and have strategic alliances in Denmark and Ireland.

Gira forecasts the EU production to increase by more than 3% per annum from 2017 to 2021, as new capacity comes online.

South-east Asia was 85% self-sufficient in infant formula in 2017; the rest was imported from the EU, New Zealand and Switzerland, among others.

The main producing countries within South-east Asia are Indonesia, the Philippines, Thailand, Vietnam and Singapore. Here, the most active companies are Danone, Nestlé and FrieslandCampina, all foreign, as well as local companies such as Vinamilk (Vietnam).

Gira forecasts the South-east Asian production to increase by over 4% per annum from 2017 to 2021, the biggest increase coming in the third stage segment – i.e., growing-up milk powder for toddlers.