Market Oveview: Identifying New Trends and Opportunities in the Global Infant Forumla Market

MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

MARÍA MASCARAQUE

http://www.euromonitor.com/

GLOBAL MARKET INSIGHT

FUTURE OUTLOOK


© Euromonitor International

3

Up by 7% in 2015, FF drives once again the milk formula marketMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

2010 2011 2012 2013 2014 20150

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

-5

0

5

10

15

20

25

30

GLOBAL MILK FORMULA MARKET 2010-2015

Organic Milk Formula

Special Baby Milk Formula

FF Milk Formula

FF Milk Formula % Y-O-Y growth

Special Baby Milk Formula % Y-O-Y growth

Organic Milk Formula % Y-O-Y growthR

etai

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S$

billi

on),

cons

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015

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% Y

-Y G

row

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4

FF milk formula outperforms other HW packaged food categoriesMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FF Milk Formula

Reduced Fat Milk

NH High Fibre Bread

FF Breakfast Cereals

NH Nuts

Others

FF Milk

For

mula

NH Other

Non

-Dair

y Milk

Alte

rnati

ves

NH Nuts

Probio

tic P

lain Yogh

urt

FF Flav

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Drin

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10121416

Abso

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Gro

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(US$

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5

China alone accounted for 46% of milk formula market in 2015 MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

83 mn children aged 0-4 Exclusive breastfeeding rate (<6 m) 28%

US$20 bn



6

Nestlé leads, accounting for 21% of the global milk formula marketMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

2010 2011 2012 2013 2014 20150

2,000

4,000

6,000

8,000

10,000

12,000

GLOBAL PERFORMANCE OF LEADING MILK FORMULA COMPANIES

Nestlé SAMead Johnson Nutrition CoDanone, GroupeAbbott Laboratories IncRoyal FrieslandCampina NV

Ret

ail V

alue

(US

$ m

illio

n) c

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ant,

fixed

201

5 ex

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7

Asia Pac

ific

Wes

tern E

urop

e

North

Amer

ica

Easter

n Eur

ope

Austra

lasia

MEA

Latin A

merica

0%10%20%30%40%50%60%70%80%90%

100%

MILK FORMULA MARKET: COMPANY SHARES IN 2015

OthersAbbott Laboratories IncRoyal FrieslandCampina NVDanone, GroupeMead Johnson Nutrition CoNestlé SA

Company competition is fierce and varies regionallyMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET



8

2010 2011 2012 2013 2014 20150

500

1,000

1,500

2,000

2,500

3,000

3,500GLOBAL PERFORMANCE OF LEADING MILK FORMULA BRANDS

Enfamil. Mead Johnson Nutrition CoS-26. Nestlé SASimilac. Abbott Laborator-ies IncEnfagrow. Mead Johnson Nutrition CoNan. Nestlé SABeingmate. Hangzhou Be-ingmate Group Co LtdYili. Inner Mongolia Yili Industrial Group Co LtdFriso Gold. Royal FrieslandCampina NVDumex. Danone, GroupeNutrilon. Danone, Groupe

Ret

ail V

alue

(US$

mill

ion)

con

stan

t, fix

ed 2

015

exch

ange

rat

e Local Chinese brands within the leading brands globally MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET



9

Nutritional science as a driver of innovation MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

FF

Probiotics

Prebiotics

Omega-3DHA, EPA

Omega 6ARA

Oth

er C

laim

s

Calcium/Iron/ Zinc

FOS/GOS

Vitamins C, A,D

Choline,Lutein



10

Probiotics

ResearchDigestive Health

Immune Support

Probiotic’s research is still in the spotlight MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

•Nestlé (June 2015) patent

•L. rhamnosus + B. longum•L. paracasei + B. longum

Prevention of Childhood Allergies

• L. reuteri Protectis: reduction in crying time (Szajewska et al., 2012)

• L reuteri DSM 17938: improvement of colic symptoms by reducing crying and fussing

times (Chau et al., 2015)

Colic



11

Milk formula composition becoming more like breast milk MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

• Mimics composition, and structure of human milk fat

• Enhance babies’ immunity, improve comfort and support health growth

New tailored lipid (OPO) (sn-2 palmitate)

• Currently: small fat droplets primarily coated by proteins. Thick protein-only interface

• Nuturis®: large fat droplets with a phospholipid coating. Thin interface -

phospholipids, proteins and cholesterol

NUTURIS: lipidic matrix imitating

structure of human milk

Gallier et al., 2015



12

Explore nutritional requirements in emerging countries MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

DANONE

Health authorities Local associations



13

Good night's sleep and convenience key focus areasMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

• Breast milk easier to digest

• Higher percentage of carbohydrates

• Enrich with sleep-promoting substances: alpha-lactalbumin, uridine, adenosine and tryptophan

Good night's sleep

• Nespresso for babies: 6 types of age-appropriate BabyNes capsules (1 – 36 months)

• China, Hong Kong, France USA, Switzerland

• Future: fortified flavoured milk drinks for children older than 3 years

Increasing convenience

Source: Humana-Baby

Source: Laboratorios Ordesa

Source: Gerber BabyNes



14

Convenience key for working mothersMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

• Handy pack sizes for "ready to drink"

Puleva Peques 3

Lactalis, Spain

• Individually-packaged liquid milk formula

Haihai Stick Pack

Wakodo, Japan

• Solid milk formula cubes

Meiji Hohoemi cube

Meiji, Japan

Source: Lactalis Puleva, S.L.U.

Source: Asahi breweries, LTD

Source: Meiji Holdings Co.,Ltd.



15

Working mothers have increased by 6% and women being the head of household by 16% in 2010-2015


2010 2011 2012 2013 2014 2015440

460

480

500

520

540

560

580

HEAD OF HOUSEHOLD [FEMALE] 2010-2015

Mill

ion

2010 2011 2012 2013 2014 20151.08

1.10

1.12

1.14

1.16

1.18

1.20

1.22

GLOBAL EMPLOYED FEMALE POPULATION 2010-2015

Bill

ion


GLOBAL MARKET INSIGHT

FUTURE OUTLOOK



17

2015 2016 2017 2018 2019 20200

10000

20000

30000

40000

50000

60000

70000

80000

MILK FORMULA PERFORMANCE IN DEVELOPED COUNTRIES VS. EMERGING AND DEVELOPING COUNTRIES

Developed countriesEmerging and developing countries

Ret

ail v

alue

(US$

mill

ion)

, con

stan

t,

fixed

201

5 e

xcha

nge

rate

Growth expected to be more than 20 times higher in emerging vs developed countries


US$ 24mn

US$ 1 mn



18

China will keep leading the growth within milk formulaMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

Absolute growth (2015-2020)

US$20 billion

The end of the “One-child policy”



19

Move towards premiumisation in emerging marketsMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202002

468

10

12141618

20

MILK FORMULA UNIT PRICE IN EMERGING MARKETS

Uni

t pr

ice

(US$

/kg)

, con

stan

t, fi

xed

2015

exc

hang

e ra

te

Growth: 5%



20

MEA is expected to be the 2nd fastest growing region by 2020MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

Asia Pac

ific

Austra

lasia

Latin A

merica

Easter

n Eur

ope

MEA

North

Amer

ica

Wes

tern E

urop

e0

10

20

30

40

50

60

70

80

19.4

44.9

MILK FORMULA MARKET % GROWTH: REVIEW vs. FORECAST PERIOD

2010-15 %2015-20 %

% c

onst

ant,

fixe

d 20

15 e

xcha

nge

rate



21

Where to invest in MEA?MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

South Korea

Spain

Greece

Poland

Egypt

Vietnam

Chile

Turkey

Saudi Arabia

China

-5 0 5 10 15 20

MILK FORMULA GROWTH: TOP AND BOTTOM COUNTRIES IN 2015-2020

CAGR %



22

National policies to further fuel breastfeeding MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

WHO

Exclusive breastfeeding up to

6 months of age

Policies strengthened to

promote breastfeeding

Objective by 2025

Increase exclusive breastfeeding in the first 6 months to at

least 50%



23

South Korea

- Education campaigns

- Academy of Breastfeeding Medicine in Korea

UK

- “Children´s Health” policy

- NHS support

- WHO Code of Marketing of Breast Milk Substitutes

China

- WHO Code of Marketing of Breast Milk Substitutes

- Chinese law update (2015)

USA

- “Surgeon General's Call to Action to Support Breastfeeding”

- “The Baby-Friendly Hospital Initiative” and “La Leche League”

Initiatives to promote breastfeeding across the worldMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET



24

Toddler milk formula outperforms in saturated developed marketsMARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

Toddler milk formula

Follow-on milk formula

Standard Milk Formula

0

5

10

15

20

25

20.7

0.43.9

MILK FORMULA BY TYPE IN DEVELOPED COUNTRIES

%G

row

th 2

015-

2020

, con

stan

t, fi

xed

2015

exc

hang

e ra

te



25

Growing appetite for natural, organic ingredients in developed countries


2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

0

50

100

150

200

250

300

350

400

450

500

ORGANIC MILK FORMULA PERFORMANCE

Developed countries Emerging and de-veloping countries

Ret

ail V

alue

(US

$ m

illio

n) c

onst

ant,

fix

ed20

15 e

xcha

nge

rate



26

Milk Formula Strategies MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET

Focus on toddler milk formula in saturated developed markets

Product diversification, notably through high-margin organic ranges in developed countriesAttempting to establish stronger and premium brand images in emerging markets

Identify local nutritional needs in new regions, mainly in emerging countries

Improve the convenience of packaging brings a key competitive advantage to manufacturers


THANK YOU FOR LISTENING

Q&AMaría MascaraqueAssociate - Health and Wellness [email protected] @MascaraqueMaria https://uk.linkedin.com/in/mariamascaraque

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Market Oveview: Identifying New Trends and Opportunities in the Global Infant Forumla Market