The infant formula market is projected to grow at a CAGR of 5.42% to reach a market size of US$78.639 billion by 2028, up from US$54.330 billion in 2021.
The milk formula is usually designed for infants under 12 months and is prepared for cup feeding from liquid or powder. The demand for milk formula is increasing due to medical conditions that affect either the mother or the baby. According to WHO and UNICEF, more than half of expecting mothers and breastfeeding mothers are influenced by the marketing done by the companies that produce milk formula products and therefore end up buying those products. The increasing population of newborns is a driving factor for the growth of this market.
The increasing number of newborns, rapid urbanization, and modernization are boosting the infant formula demand.
Millennial parents are well-versed with the required nutritional requirement for their infants due to information that is available online, which creates a healthy atmosphere for gaining knowledge. And therefore, the parents' focus has been on better nutritional and more beneficial products for their children. Millennial parents have also been demanding plant products, as they possess better nutritional value. Therefore, they also like to have such nutritional value in their kid's food intake.
- In 2020, in China, Danone invested US$114 million in opening open science research in Shanghai to acquire infant milk formula. The company aims to develop more relevant nutritional products focusing on mothers' breast milk.
- UK-based infant formula manufacturer Kendamil created the country's first "ready to feed" baby milk formula containing no fish or palm oil. According to the company, the product has a shelf life of 12 months compared to others that only offer nine months. Furthermore, in September 2022, Abbott, a leading brand name in nutrition, announced the launch of "Similac GainSchool," which is said to be the first and only milk formula with the PRODI-G Nutrient System. It is an exclusive blend of five human milk oligosaccharides (HMOs) to support higher IQ, better brain connections, and stronger immunity.
- In August 2022, Danone launched the new Dairy & Plants Blend baby formula to meet parents' desire for feeding options suitable for a flexitarian, vegetarian, and plant-based diet while still meeting their baby's specific nutritional requirements.
- In November 2022, Perrigo announced the expansion of its US infant formula manufacturing capabilities by investing US$170 million. It has recently purchased the US and Canadian rights to the Good Start baby formula brand and Nestle's Gateway infant nutrition plant in Wisconsin. The investment amount will be used to expand the gateway's production capacity. The expansion of Gateway is the first major initiative for their recently announced 'Supply Chain Reinvention' program. It solidifies their long-term manufacturing supply of infant formula in the US and increases the availability of lower-priced and high-quality infant formula to consumers.
- In March 2022, Boobie, an infant formula company, announced that it raised $50 million in a Series B round that was led by Park West. Their new funding round includes $40 million in venture capital and $10 million in inventory debt. The new funding will be used for the production of new formula products. The company will also deepen its partnership with its manufacturing partner Perrigo. Along with this, the company is planning to invest in product development and R&D, which includes the launch of Bobbie Labs, a virtual laboratory that will fund infant feeding research and innovation.
The cow's milk protein-based formula will witness robust growth.
The formulas with cow milk protein as the main ingredient has seen a rise in demand in recent years. Pediatricians frequently suggest formula made with protein from cow's milk as a breast milk alternative. It is fueled by the availability of several cow milk protein-based formula compositions that meet nutritional requirements for newborns. Businesses are spending money on R&D to develop solutions specifically suited to the needs of newborns that are allergic to or intolerant of types of cow milk protein.
Many businesses have witnessed potential business opportunities in the online baby food market, focusing on the baby formula segment, and therefore have settled on e-commerce platforms to establish baby food product stores there. By distribution channel, online platforms have been gaining popularity due to various attributes such as easy accessibility, festive offers, and quality assurance. Furthermore, online platforms are slowly gaining a significant share of the market.
North America is anticipated to hold a significant share during the expected period.
The North American countries- USA, Mexico, and Canada are developed countries. Therefore, they are rapidly modernizing. The families' disposable income is also increasing as both parents are now working, so they aim to provide quality products to their children even if they cost them more than normal. The market players in this region are conducting extensive research and development to make strategic investments and launch new products for catering wide customer base. For instance, in November 2020, in Canada, Abbott launched an infant formula- Similac Pro-Advance with 2'-Fucosyllactose Oligosaccharide† (2'-FL†).
By Formula Type
- Cow's Milk Protein-Based
- Protein Hydrolysate
- Concentrated Liquid
By Distribution Channel
- North America
- South America
- United Kingdom
- Middle East and Africa
- Saudi Arabia
- Asia Pacific
- South Korea