Growing-up milk formula continues to generate the majority of growth in milk formula, as it is less vulnerable to awareness of breastfeeding’s benefits. China is forecast to remain the world’s largest market in terms of its value contribution to growth, although manufacturers face new challenges linked to legislation limiting the number of products available. Premiumisation strategies are likely to remain driven by free-from special milk formula and naturally healthy ingredients such as organic.
Growing-up milk formula is expected to continue generating the majority of actual sales growth in milk formula, as it is less vulnerable to the promotion of breastfeeding, and may benefit from premiumisation based on health attributes. While growing-up milk formula is highly developed in Asian emerging markets including Indonesia, Thailand and Vietnam, expected to remain key growth drivers, it remains underdeveloped in some developed markets, notably Japan, where it may widen its consumer base.
China is forecast to remain the world’s largest growth-contributing market in baby food, thanks to the adoption of milk formula among urban parents, lower breastfeeding rates than in most emerging markets in Asia, and the strong demand for premium brands. However, the market presents new challenges and uncertainties, notably due to the legislation to limit the number of products which came into force in January 2018.
Growing urbanisation and a rise in female participation in the workforce are expected to remain key growth drivers for milk formula in some emerging markets in Asia Pacific, notably in Indonesia and Vietnam, as well as in the Middle East and Africa in Saudi Arabia and South Africa, often fuelling growth across all three main age groups in milk formula: standard, follow-on, and growing-up.
The strong performance of premium products fuels growth globally. Organic represents a key growth area, both in prepared baby food and in milk formula, as it helps manufacturers build brand images centred on natural ingredients. Special baby milk formula such as lactose-free and hypoallergenic variants are boosted by greater awareness of allergies, while liquid milk formula is emerging in Asia Pacific due to the flurry of new product launches, emphasising convenience.
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