Infant Formula Market Size, Share and Industry Analysis, By Type (Infant Milk, Follow-on-Milk, and Others), By Distribution Channel (Hypermarkets/ Supermarkets, Pharmacy/ Medical Stores, Specialty Stores, and Others), and Regional Forecast, 2024-2032

The global infant formula market size was valued at USD 73.83 billion in 2023 and is projected to grow from USD 81.72 billion in 2024 to USD 178.83 billion by 2032, exhibiting a CAGR of 10.28% during the forecast period. Asia Pacific dominated the infant formula market with a market share of 68.42% in 2023. Moreover, the infant formula market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 10.22 billion by 2032, driven by high awareness among parents regarding the benefit of high-quality and nutritious baby formula for healthy growth of the babies.

Infant or baby formulae are specially designed formulations for infants, specifically those below one year of age. Numerous government organizations, such as the Food Safety and Standards Authority of India (FSSAI), the World Health Organization (WHO), and others, have specific rules regarding baby food formulation to ensure the high quality of the product. Stringent regulations regarding the quality of the products are expected to encourage consumers to buy new products without hesitation. For instance, in 2019, FSSAI drafted new rules regarding the standards of formula for special medical purposes, premature infant milk substitutes, and lactose-free infant milk substitutes.

Furthermore, in March 2021, Danone S.A., a French multinational food products manufacturer, partnered with Japanese manufacturer Meiji to launch its infant formula milk tabs in pre-measured formats in the U.K. Through this launch, the company intended to cater to the rising demand from parents for the right nutritional content and convenience in feeding their babies.

The COVID-19 pandemic significantly affected different industries and drastically changed the markets and businesses worldwide. The infant nutrition industry also faced significant production and supply chain constraints due to the pandemic. The growing consumer preference for a nutrition-rich diet and increased awareness of the consumption of minerals and vitamins for a better immune system resulted in the increased product demand in the global market. However, the limited production and increased demand caused a supply chain gap, resulting in a baby formula shortage in the market, thereby causing consumer panic. Thus, the U.S. Food and Drugs Administration (FDA) implemented new international policies to ease infant nutrition products trade. For instance, in May 2022, the FDA announced new guidelines to bring flexibility to trade in the product.

Infant Formula Market Trends

Increasing Consumer Shift towards Clean-label and Plant-based Products to Fuel the Market Growth

The global market for infant nutrition is booming, with strong potential for rapid growth due to a flurry of innovation with crucial ingredients such as probiotics and human milk oligosaccharides. Moreover, in recent years, there has been an increased demand for clean-labeled, plant-based, and organic products. The rising consumer shift from chemical to all-natural and plant-based ingredients is expected to support organic and clean-labeled infant nutrition product demand. In addition, the fortification of baby formula with vitamin D is increasing as it is potentially significant in balancing the microbial population in the infant’s gut. The increasing spread of COVID-19 raised concerns for infants' health and well-being and ensured that market players should actively capitalize on launching vitamin-D-fortified baby formula. In November 2023, Nestle launched a new infant formula in Hong Kong that contains a proprietary blend of “all-around” nutrition that helps to support the growth of bones and improve the digestive and cognitive health of the infants.

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Infant Formula Market Growth Factors

Hectic Lifestyles Coupled With Product Innovations to Propel the Market Growth

Over the past decades, the market has been positively influenced by various factors, including the changing consumers’ lifestyle, the growing purchasing power and the increase in female employment. A large number of people living in urban areas cannot effectively track or monitor their child’s nutritional requirements. A busy lifestyle is a major factor for individuals lagging in caring for their babies, which adversely affects the baby’s health in the long term. Therefore, numerous millennial consumers seek convenient options to meet their baby’s nutritional requirements. The product's convenience attracts parents, thus driving product demand. In August 2022, Danone S.A., a French multinational food-products manufacturing company, launched a dairy and plant blend baby formula to meet parents' desire for vegetarian and flexitarian options for their babies. The formula contains 60% plant-based and 40% dairy-based protein, combining nutrients found in plants and breast milk.

The growing investment by leading players in the R&D of innovative products is further expected to positively influence the global market growth. For instance, in October 2022, Abbott Laboratories, an American nutrition food manufacturing company, invested USD 500 million to construct a new manufacturing plant to produce baby and toddler formula in the U.S.

Rising Awareness about the Importance of Early Nutrition for Infants' Proper Growth and Development is Fueling the Market Expansion

The growing awareness regarding the importance of early nutrition for infants' proper growth and development creates a positive outlook for the market growth. It is essential to provide adequate nutrition during infancy and early childhood to ensure children’s growth, health, and development to their full potential. Moreover, insufficient nutrition in children may lead to vitamin A deficiency, weakening of the immune system, and increasing risk of blindness. Therefore, parents' focus on better nutrition and more beneficial products for their children. In addition, as plant products are of more nutritional value, they are also sought by young parents. Furthermore, the thriving e-commerce industry is boosting the sales of such products via online platforms.

In March 2023, Bobbie Labs, the R&D hub of formula brand Bobbie, announced a new infant formula – Bobbie Organic Gentle, an American-made, EU-style organic product with 100% lactose, a primary source of carbohydrate found in breast milk that provides energy to fuel growth.

RESTRAINING FACTORS

Stringent Rules and Regulations and Safety Concerns Related to New Products May Hamper the Market Growth

The strict rules and regulations pertaining to the launch of new products and the complicated process of registering new products are estimated to hamper the market growth. In February 2023, Reckitt Benckiser issued a press release and announced the recall of 145,000 cans of Enfamil ProSobee Simply Based Infant Formula because of the potential for cross-contamination with Cronobacter sakazakii. This deadly pathogen triggered the baby formula crisis last year, in 2022. Dozens of news outlets reported this as a breaking story, recommending parents and caregivers to discard the products or return them for a refund. Thus, the safety concerns related to formulation are expected to hinder the market growth. Furthermore, in 2023, UNICEF and WHO stated that exclusive breastfeeding increased by 10 percentage points, culminating in 48% globally. On the other hand, infant nutrition products containing artificial ingredients, such as infant formulas, have slowed down comparatively.

Infant Formula Market Segmentation Analysis

By Type Analysis

Infant Milk Segment Dominated Owing to High Availability in Retail Space

Based on type, the market is segmented into follow-on-milk, infant milk, and others. The infant milk segment accounted for the largest market share in 2022 due to the high availability of infant milk in the retail space. Infant milk holds a higher share and the follow-on milk infant formula is forecasted to have a higher CAGR. The higher product availability of the infant milk in the retail space primarily responsible to hold the larger share in the global market. The rising consumers’ preference towards infant/baby milk enables them to afford a diversified type of infant milk formula products available in the market. The rising demand for follow-on milk is owing to the rapid growth in working women globally.  The new product launches by companies and development in the infant milk segment is further fueling the segment growth.

For instance, in October 2020, Donone S.A. announced the expansion of the Aptamil product portfolio by launching its new organic formula milk products. The new range includes products such as Aptamil Organic Infant Milk (from birth), Aptamil Organic Follow-On Milk (for ages 6-12 months), and Aptamil Organic Toddler Milk (from 12 months onward) to cater to all the three stages of baby feeding.

By Distribution Channel Analysis

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Hypermarkets/Supermarkets Segment Dominates due to its Convenience and Wide Availability of Brands

In terms of distribution channel, the market is divided into pharmacy/medical stores, hypermarkets/supermarkets, specialty stores, and others. The hypermarkets/supermarkets segments holds the major share in the market owing to the higher market penetration and availability of variety of products and brands. Furthermore, the convenience of availability of multiple nutrition products at a same place further contributes towards the growth of hypermarkets/supermarkets segment growth. Consumers find such stores convenient as they get to choose from a variety of options under one roof. Manufacturers are launching new products and making them available in supermarkets to meet the increasing demand. In July 2022, Bobbie, the American-founded, European-style USDA Organic formula, launched its infant nutrition products exclusively at Target to cater to increased market diversification in the U.S. industry.

The others segment include online stores, which saw significant demand during the coronavirus pandemic as consumers opted for online shopping. With the rising technological development and fast delivery services the online delivery channel holds the potential for rapid expansion and significant factor leading to fastest growth over the forecast period. In February 2020, Danone SA launched its new track and connect service which include the details of products from production to sales with complete transparency. The service include post sales services such as customer support, nutrition apps, and e-commerce to expand its market share and provide consumers with more convenience.

REGIONAL ANALYSIS

Based on region, the market has been analyzed across Europe, the Asia Pacific, South America, North America, and the Middle East & Africa.

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The Asia Pacific region has the highest global infant formula market share, stood at USD 50.52 billion in 2023 and is forecasted to have the highest CAGR from 2024 to 2032. The region includes countries such as China, India, Japan, Australia, and the rest of the Asia Pacific.  Consumers in the region are becoming aware of value additions provided by the infant formula and the convenience offered by these products regarding feeding and keeping track of proper nutrition. The region has vast scope for industry developments, such as new product launches, expansion in distribution channels, and rising investments. China holds a significant share of the global market and is the top consumer in the Asia Pacific, owing to its higher population and rising consumer awareness about infant nutrition. Moreover, China’s decision to abolish its “one-child” policy and increase the country’s birth rate is predicted to positively impact the market growth during the forecast period. Infant formula companies are also investing in research and development of new ingredients, which can add value to infant formula products. For instance, in 2023, Junlebao, a Chinese dairy product manufacturer, researched and found that the addition of docosahexaenoic acid (DHA) helps to improve an infant’s brain development. Thus, companies are working to add value to their products to improve brain and infant health development.

Furthermore, significant birth rates in countries such as Japan, Australia, and others are other factors fueling the demand for infant formula in the Asia Pacific region. For instance, as per the United Nations Population Fund, India and China are the most populous countries globally and comprise 60% of the global population, accounting for around 4.3 billion people. Furthermore, as per the data published by the World Bank, in 2023, the average global birth rate was 18.7 births per 1000 people, whereas the average birth rate of India, China, Japan, and Australia accounts for 18.7, 15.2, 8, and 12 per 1000 people respectively.

In North America and Europe, the demand for organic baby formula and food is growing quickly, as parents are becoming more critical about purchasing decisions, with increasing inquisitiveness about using various ingredients such as protein, minerals, and other nutritional ingredients in infant formula products and its effects on infants’ health. In Europe, continuous innovation by key industry players, such as Nestle, Organix, and others, is expected to boost product demand among a wide regional consumer base.

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South America is one of the most promising markets owing to the rising urbanization in countries such as Brazil, Argentina, and other major countries, which is driving the market growth. Thus, the rapid economic development in these countries is expected to boost baby formula sales in the Brazilian market during the forecast period. In 2022, Brazil’s real GDP grew by 2.9%, largely on the strength of household consumption which was up 4.3% that year. Furthermore, according to Countrymeters, as of 1 January 2023, the population of Brazil saw an increase of 0.91 % compared to the population of the year before. In 2022, the natural increase was positive, as the number of births exceeded the number of deaths. As a result, Brazil will experience an increasing demand for infant formula. 

The Middle East & Africa region has seen significant growth in its economic development in recent years. In addition, with new government initiatives to improve infrastructure, the region has been recording significant growth in urbanization, thus positively impacting product demand in the forthcoming years.

List of Key Companies in Infant Formula Market

Major Companies Focus on Investment and Base Expansion Strategies to Attain the Dominating Position

The market comprises a few well-established and several small- and medium-scale players. The key players in the global market rely on two most important strategies: new product developments and base expansion. The companies are also focusing on digitalization, investment, and promotional activities, which act as a strategy for strengthening their market presence. Nestle SA, Perrigo Company Plc, and Danone S.A. are developing new products fortified with vitamins D, A, E, and C. Moreover, parents prefer to buy safe and high-quality products for babies and the new variation of organic formula is a huge growth opportunity for infant formula manufacturers.

LIST OF KEY COMPANIES PROFILED:

• Nestle S.A. (Switzerland)


• Danone S.A. (France)


• Arla Foods (Denmark)


• Yili Group (China)


• Abbott (U.S.)


• The Kraft Heinz Company (U.S.)


• Bellamy’s Organic (Australia)


• Reckitt Benckiser Group PLC (U.K.)


• Perrigo Company plc (Ireland)


• FrieslandCampina (Netherlands)

KEY INDUSTRY DEVELOPMENTS:

• May 2023 - Arla Foods Ingredients launched an alpha-lactalbumin (alpha)-rich infant formula ingredient called Lacprodan Alpha-50. The new product was launched to meet the growing need for low-protein formulations.


• April 2023 –  Danone Manifesto Ventures, the corporate venture arm of the French dairy giant Danone SA, invested around USD 2 million in Israeli cell-based breast milk startup Wilk. The aim of this investment was to develop cultured breast milk components for infant nutrition/formula using cell-based technology.


• March 2023 - Danone North America announced the availability of the new hypoallergenic baby formula brand Pepticate in the U.S. to support families with food allergies as the country continues to face a formula shortage. Pepticate is Europe's hypoallergenic, extensively hydrolyzed baby formula designed to relieve cow milk allergy symptoms (CMA) in infants aged 0 to 12 months.


• March 2022 - ByHeart, an infant nutrition company offering nutritious food for babies, launched its infant formula. Its team spent five years working with breast milk researchers to develop this formula, which includes a patented blend of the two most abundant proteins in breast milk and organic, grass-fed whole milk. The formula offers benefits such as easy digestion, less spit-up, and immune, gut, and cognitive development, all without corn syrup, maltodextrin, soy, or palm oil.


• January 2021 – Timios, an India-based packaged healthy snack brand for children, launched its "Made to Order Porridge" category for infants and toddlers. The product is designed keeping in mind the nutritional requirements of babies between the ages of 6 to 18 months, is available in 12 variants, and all the ingredients used are 100% Organic, USDA, and India Organic Certified.

Report Coverage

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The report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the global market share, size, and growth rates for different segments of the market.

The report also provides an account of the market dynamics and competitive landscape. It further presents various key insights: an overview of parent market, research methodology, recent industry developments such as mergers & acquisitions, the regulatory framework in critical countries, and key infant formula market trends.

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