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Infant Milk Formula - China - March 2019

OVERVIEW
What you need to know
Products covered in this report
Definitions
Figure 1: Mintel’s definition of different income groups, China
EXECUTIVE SUMMARY
The market
Value growth slowing down amid shrinking demand
Figure 2: Best-and worst-case volume sales forecast of IMF market, China, 2013-23
Figure 3: Best-and worst-case value sales forecast of IMF market, China, 2013-23
Build technology strength to cope with ingredient shortage
Lucrative yet challenging market for international players
Companies and brands
Leading brands gaining bigger share
Expanded categories and distribution to grow business
Innovation centres around additional health benefits
The consumer
Brand preference exists in different regions and generations
Figure 4: Infant milk formula brand bought, December 2018
Demand for more fortified nutrition
Figure 5: Attitudes towards fortified nutrition, December 2018
Finding the best fit is of top priority
Figure 6: Purchase factors ranking, December 2018
Premium and special formula IMF receive high interest
Figure 7: Usage and interest in specific infant milk formula, December 2018
Experience and authority win more trust
Figure 8: Most trustworthy information source, December 2018
Parents have yet to realize benefits of breast feeding
Figure 9: Attitudes towards breastfeeding, December 2018
What we think
ISSUES AND INSIGHTS
Strategy pivot in response to decreasing birth rate
The facts
The implications
Figure 10: NPD of infant milk formula in China, by sub-category, 2016-18
Figure 11: Mengniu’s Doraler goat infant milk powder for bigger babies and young children
Special formula serving rising number of babies diagnosed with allergies
The facts
The implications
Figure 12: Enfamil Nutramigen ready-to-use hypoallergenic infant formula, USA
Solid control of upstream resources can help win the premium sectors
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Stagnant value growth despite shrinking volume demand
Control over ingredient helps increase competitiveness
Market regulation brings pros and cons
MARKET SIZE AND FORECAST
Plummeting birth rate further brings down volume demand
Figure 13: Best-and worst-case volume sales forecast of IMF market, China, 2013-23
Market value expected to remain stable
Figure 14: Best-and worst-case value sales forecast of IMF market, China, 2013-23
MARKET FACTORS
Fewer newborns to be fed
Ingredient shortages highlight need for manufacturing upgrade
IMF market continues to face strict regulations
Changing market dynamic for IMF imports
KEY PLAYERS – WHAT YOU NEED TO KNOW
Game of big players
Competitiveness through expansion or concentration
Rising claims on digestive and eye health
MARKET SHARE
More centralised market
Figure 15: Leading companies’ value share in IMF market, China, 2017-18
Leading players win with big sale items
Brands perform well on ecommerce platforms
Figure 16: Top 10 IMF brands on domestic ecommerce platforms* (based on value sales), China, 2018
Figure 17: Top 10 IMF brands on cross-border ecommerce platforms* (based on value sales), China, 2018
COMPETITIVE STRATEGIES
Branching out to other categories
100% goat becomes selling point
Figure 18: Goat IMF products claiming to use goat whey only
Distribution channel focusing on expansion
WHO’S INNOVATING?
Additional benefits and fortified nutrition as highlighted claims
Figure 19: Select claims of IMF products, China, 2016-18
Figure 20: New IMF products with fortified nutrition or additional benefits, global, 2019
Figure 21: Junlebao’s Lebo K2 growing-up milk formula for children
Product innovation to watch
Figure 22: Banner Dairy IMF stage 1 with milking date shown at can bottom
Figure 23: Wyeth illuma’s HA partially hydrolysed whey formula
Figure 24: Treasure of Plateau yak milk infant formula, China
THE CONSUMER – WHAT YOU NEED TO KNOW
High interest in more fortified nutrition
Quality and suitability high priorities
Yearning for special formula and premium sectors
BRAND PURCHASED
International brands enjoy competitive edge in South and East regions
Figure 25: Infant milk formula brand bought, December 2018
Figure 26: Infant milk formula brand bought, by region, December 2018
Domestic brands are winning younger parents
Figure 27: Infant milk formula brand bought, by age, December 2018
Danone gains the most loyalty
Figure 28: Number of brands consumed by users of different brands, December 2018
Figure 29: Tips on changing IMF brands
ATTITUDES TOWARDS FORTIFIED NUTRITION
Longer list of fortified nutrition is preferred
Figure 30: Attitudes towards fortified nutrition, December 2018
More education and income further drives demand
Figure 31: Percentage with “the more, the better” attitude, by education, December 2018
HMO and casein have potential to prevail
PURCHASE FACTORS RANKING
Calling for more targeted formula
Figure 32: Purchase factors ranking, December 2018
Post-1980s still obsessed with milk source
Figure 33: First priority of choosing infant milk formula, by generation, December 2018
INTEREST IN SPECIFIC INFANT MILK FORMULA
Premium IMF highly coveted
Figure 34: Usage and interest in specific infant milk formula, December 2018
Opportunity in formula transition to win over special-formula buyers
Figure 35: Number of brands consumed, by users of special formula, December 2018
Education on special formula required for older parents and lower tier markets
Figure 36: Percentage of unaware of certain special formula, by age, December 2018
Figure 37: Percentage of consumers having bought or interested in buying certain special formula, by city tier, December 2018
MOST TRUSTWORTHY INFORMATION SOURCE
Value experience and authority
Figure 38: Most trustworthy information source, December 2018
Figure 39: Most trustworthy information source, by household income, December 2018
Polarised opinions on celebrity endorsements
ATTITUDES TOWARDS INFANT MILK FORMULA
Breast feeding undervalued
Figure 40: Attitudes towards breastfeeding, December 2018
Local versions and official sales channels gain popularity
Figure 41: Attitudes towards imported infant milk formula, December 2018
Figure 42: Attitudes towards channels, by attitudes towards imported IMF, December 2018
MEET THE MINTROPOLITANS
Not necessarily pioneers of latest baby feeding concepts
More interested in special formula, liquid and capsule IMF
Figure 43: Percentage of haven't bought but have interest to buy, by consumer classification, December 2018
Authority earns more credit
Figure 44: Most trustworthy information source, by consumer classification, December 2018
APPENDIX – MARKET SIZE AND FORECAST
Figure 45: Total market volume of IMF, China, 2013-23
Figure 46: Total market value of IMF, China, 2013-23
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations

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