0 items USD 0.00World鈥檚 Top 10 Infant Formula Manufacturers
The baby/infant formula market is largely dominated by three players Nestle, Danone and Reckitt Benckiser (Mead Johnson). These three companies together control more than 45% of global market share.
The other prominent players along with top three are:
- Nestl茅 (Gerber Products Company)
- Danone S.A.
- Reckitt Benckiser (Mead Johnson & Company, LLC)
- Abbott
- FrieslandCampina
- Bellamy's Organic听
- Kraft Heinz
- HiPP GmbH & Co. Vertrieb KG
- Perrigo
- Arla Food
听
SWOT analysis of the Baby Formula Industry
Strengths:
- Large and growing market demand for baby formula due to increasing global population and birth rates
- Strong brand recognition and loyalty among consumers
- High product safety and quality standards
- Innovative and specialized products to meet specific dietary needs and preferences of consumers
- Strong distribution networks and partnerships with retailers and healthcare providers
Weaknesses:
- High production and supply chain costs due to strict regulations and quality control measures
- Intense competition among leading baby formula brands
- Potential negative impact on brand reputation due to recalls and safety concerns
- Dependence on raw material suppliers and market trends
Opportunities:
- Expansion into emerging markets with growing demand for baby formula
- Development of new and improved products to meet changing consumer preferences and dietary needs
- Partnerships with healthcare providers and other organizations to improve product accessibility and education
Threats:
- Increasing regulatory scrutiny and potential changes to industry standards and regulations
- Threat of substitute products, such as breastfeeding or alternative milk formulas
- Rising raw material costs and potential supply chain disruptions
- Intense competition from private label and generic brands.
Baby Formula Industry Overview
Breastfeeding is strongly recommended by doctors and physicians; and many mothers incline to breastfeed their infants, but for mothers who are unable to breastfeed, or who choose not to do, for their infant - infant formula/ cow milk infant formula is necessary source of nutrition.听
听
According to U.S. FDA, An estimated 1 million infants in the United States are fed formula from birth, and by the time they are three months old, about 2.7 million rely on formula for at least part of their nutrition.
Infant formula comes in three forms:
- Powder鈥攖he least expensive of the infant formulas. It must be mixed with water before feeding.
- Liquid concentrate鈥攎ust be mixed with an equal amount of water.
- Ready-to-feed鈥攖he most expensive form of formula that requires no mixing.
Infant formula is in the state of excess capacity. Price of cow milk infant formula changed quickly during past five years. It shows that global average price of cow milk infant formula dropped from 9835 USD/MT in 2011 to 9561 USD/MT in 2015. The worldwide market for Cow Milk Infant Formula is expected to grow at a CAGR of roughly 0.2% over the next five years, will reach 26.1 billion USD in 2024, from 25.8 billion USD in 2019, according to a infant formula market report.
UPDATE:13th MAY 2022: The world's largest economy is currently grappling with a shortage of infant formula. Baby milk, an essential part of infant nutrition, is missing from U.S. supermarkets, and nearly all U.S. state residents are paying as much as a 40% higher price for available stock. Recently, the Biden administration has taken action against Abbott, the country's largest baby milk maker, which has caused this shortage. One of the largest infant formula producers, China is still not a favorite among U.S. consumers due to Trump-era sanctions and alleged involvement in the coronavirus leak. On the other hand, Europe is doing well for its infants and could be the next best option available to Americans. European infant formula brands are quite popular among Americans. While traveling from Europe, U.S. residents used to carry infant formula stock with them, but ongoing travel restrictions have significantly decimated this option. India may be another option, but in the end, it all depends on the current administration - how they want to tackle this issue.
听
Out of all geographies China holds the world鈥檚 largest infant nutrition market which is around 30%. China officially allowed every couple to have two children few years ago, however the figure for 2018 undercuts the reading of 17.86 million in 2016 and 17.23 million in 2017, according to data from the National Bureau of Statistics. New births in China in 2018 fell to 15.23 million, but it is by and large, still a big market for infant formula companies.
听
Reckitt Benckiser (RB) acquired, infant formula manufacturer Mead Johnson in 2017, for USD 17.9bn. The acquisition landed RB into an unfamiliar product territory and putting it in direct competition with Nestl茅 and Danone, major players in infant nutrition and baby food segment.
听
Reckitt's sales had gone down in the third quarter of 2018 after manufacturing problems ascended at a Dutch factory making infant formula. Which left company paralyzed to meet demand in that quarter. The Dutch factory was also responsible for supply to key European and Chinese market and听the disruption drained 拢70m off revenue from infant formula segment. 听
听
RB鈥檚 total revenue for FY 2018 was 拢12.6 bn. Health business unit contributes 拢7.76 bn, and company earns 拢2.88 bn from Child nutrition segment, which covers infant formula.
听
听
Related Blog Post
Email a colleague
Printer version
Send by email
听
About The Author
Sudeep Chakravarty
