Global Baby Food and Formula Industry

Global Baby Food and Formula Industry


Forecast up to 2016

Asia: An Emerging Market For Organic Baby Food

The baby food and formula industry includes food products which are nutritionally sound and safe for infants and toddlers. These products are manufactured keeping each age group’s nutritional needs into consideration such as for infants 0-6 months old, only formula milk

is available in the market and infant formula milk is also available in three forms milk based, protein based and soy based formula. Baby food products include cereals, bottled baby food, fruit juices, soups, vegetable juices and snacks. These foods conform to national regulations,

international standards and expert nutritional views.

The baby food industry is comprised of the below mentioned segments:


  • Infant formulas
  • Solid food




Buying behavior differs according to the age group and need. For children, parent’s buying behavior is mainly driven by emotional factors such as concern for safety and health.

This market is differentiated, as a high degree of involvement in the buying behavior of the mother is witnessed. The brand does play an important role and products that personify safety and nutrition have a greater consumer following. Economy also plays an important role where in developing countries due to the low income or single earning parent

, home cooked food is the preferred one but in developed economy where PPP is high, demand for canned and bottled baby food is high. These days high income group families and families where both parents are working prefer organic baby food, which is generally of high cost.

During global credit crisis with the reduction in available income especially in emerging economies preference for home cooked baby food increased over manufactured food items.

Although, some consumers continue purchasing economy brands, in periods of economic uncertainty the market for premium brands and other

value-added products is adversely affected. Thus, the manufacturers are forced to increase marketing and promotional expenditure, which affects the turnover and profitability of the companies.

With the alarming economic crisis, a decline in the consumer spending on baby food has been witnessed in some parts of the world. Increasing unemployment and lower growth in average wages were the major factors of fall in demand in 2008 & 2009.


In such an environment, customers generally modify their consumption patterns, trading down towards cheaper products.




Infant food manufacturers are held to the highest quality and safety standards. In 1981, the

WHO, various governments and public health campaigners together circulated

The International Code of Marketing of Breast-milk Substitutes as a “minimum” standard to help protect and promote breastfeeding in all the countries.

The Code’s preface explains that “the marketing of breast milk substitutes requires special treatment which makes usual marketing practices unsuitable for these products.

Thus, the law restricts the use of promotional tools such as promotion to the public, gifts to mothers or healthcare workers, promotion to healthcare workers or facilities as well as distribution of free samples or supplies.

These regulations have greatly restricted the baby food manufacturers in promoting their products in major regions of the world such as the US, Europe as well as emerging markets like India. In recent years EU governments, have implemented strategies to try to increase the percentage of mothers that breastfeed their babies by implementing legislations such as the EU legislation (Infant Formula and Follow-on Formula (England)Regulations 2007 (SI 2007/3521) which came into force in January 2008.


Restrictions on Promotion of baby food and formula are:

  • Promote a range of formula products by making the brand the focus of the advert, rather than specific products.
  • Feature text or images that relate to pregnancy (for example pregnancy test kits) or the feeding or care of infants less than six months.
  • Include pictures or text that directly or indirectly relate or compare products to breast milk.
  • Focus on careers’emotions in relation to the feeding or care of infants under six months.
  • It ensures that formula exported to developing countries is of EU standards
  • Feature babies that consumers may perceive as being under six months (even if they are over six months)
  • Focus primarily on the promotion of ingredients or the effect of ingredients, which are common to both follow-on formula and infant formula.


Apart from the developed economies, many emerging markets such as India, Japan,China and others have introduced strengthened regulations for the marketing of baby foods, particularly after the infected milk products issue d in 2008.

With the enforcement of strict regulations and increasing lobbying of child health organizations, legal focus, media attention, focus of the international groups and the various governments, the industry would have to constantly invest in research and development as well as new marketing and sales activities.



Women has a big role in rapidly growing baby food market worldwide because with her changing role from being a mother to a professional, she is always on the lookout for food items which takes less time to prepare and are high on nutritional content. Rapidly expanding emerging economies such as that of India and China are witnessing increasing demand in the baby food market especially since 2003, the industry has been registering phenomenal growth. In 2006 the worldwide baby food and formula market was worth US D 27.30 billion and registered a fall in growth rate in 2008.
Despite of falling growth rate this sector continues to perform positively.

Over the past few years many large and small, new baby food companies have introduced high quality baby food products to meet the market need for quality baby food products. From 2006-2011, the global baby food and formula industry grew at a CAGR 4.17% and is expected to register CAGR of 5.30% during 2011-2016 to reach USD 47.0 billion mark. The industry is expected to witness a strong growth from 2014 onwards because by that time the world economy is expected to settle down from the effect of 2008 credit crisis as well as present Eurozone crisis and falling US currency rate.



Figure1: Global Baby Food and Infant Formula Market and Forecast by Value (2006-2016)



In recent years with rising competition, the companies have started investing in promotional activities such as event marketing and point-of-sale activities. They sponsor conferences, seminars and training sessions for pediatricians, nurses, midwives and nutritionists. In addition to these programs, the companies also employ special displays, brightly colored signs, offers gifts and toys, discounts and coupons in different marketing channels such as supermarkets, grocery stores and others.



During the normal economic conditions, income level all over the world witnessed a high growth. Upper middle class population is growing continuously and large rural population is heading towards urban areas to make a better lifestyle. Globalization has a big role in rising income level because many large international firms have established their offices in developing countries to take the benefit of low production cost and raw material availability.

In 2009 the middle class included 1.8 billion people, with Europe (664 million), Asia (525 million) North America (338 million) accounting for the highest number of people belonging to this group. This expansion continues. The size of the “global middle class” will increase from 1.8 billion in 2009 to 3.2 billion by 2020 and 4.9 billion by 2030. The bulk of this growth will come from Asia: by 2030 Asia will represent 66% of the global middle-class population and 59% of middle-class consumption, compared to 28% and 23%, respectively in 2009


Publish Date: November 2016

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