Infant formula market in China remains a growth market for global players


Infant formula market in China remains a growth market for global players

More than a decade after tainted infant milk powder in China killed six children and exposed institutional neglect of food safety, Chinese parents still don’t trust local companies to feed their babies. That could mean another goldmine for foreign producers as the battle for infant milk shifts to the hundreds of smaller cities beyond the metropolises of Shanghai and Beijing. The deadly milk scandal of 2008 was a watershed moment for China’s consumers. Some 300,000 children were poisoned after Chinese suppliers added melamine, a chemical used to make plastic, to powdered milk to artificially boost protein levels. Tuesday marks the 10th anniversary of the sentencing to death in China of those at the center of the contamination and its concealment. The scandal fueled a new era of consumer suspicion and China’s $27 billion infant-formula industry was reshaped to the near-exclusion of homegrown companies among the market leaders. Nestle SA’s share of China’s milk-formula market has quadrupled since the scandal to make it the clear leader, while annual revenue at Australia and New Zealand upstart A2 Milk Co. has soared to close to NZ$1 billion ($673 million) from only NZ$1.5 million before the crisis. Foreign milk labels are still viewed by consumers as safer, higher-quality and a mark of affluence, but domestic suppliers are fighting back with savvy branding and lower prices. The prize is clear: With only a quarter of Chinese moms breast-feeding, China’s infant-formula market will expand 21 percent to about $32 billion in 2023, according to Euromonitor International.….. Read

More than a decade after tainted infant milk powder in China killed six children and exposed institutional neglect of food safety, Chinese parents still don’t trust local companies to feed their babies. That could mean another goldmine for foreign producers as the battle for infant milk shifts to the hundreds of smaller cities beyond the metropolises of Shanghai and Beijing. The deadly milk scandal of 2008 was a watershed moment for China’s consumers. Some 300,000 children were poisoned after Chinese suppliers added melamine, a chemical used to make plastic, to powdered milk to artificially boost protein levels. Tuesday marks the 10th anniversary of the sentencing to death in China of those at the center of the contamination and its concealment. The scandal fueled a new era of consumer suspicion and China’s $27 billion infant-formula

industry was reshaped to the near-exclusion of homegrown companies among the market leaders. Nestle SA’s share of China’s milk-formula market has quadrupled since the scandal to make it the clear leader, while annual revenue at Australia and New Zealand upstart A2 Milk Co. has soared to close to NZ$1 billion ($673 million) from only NZ$1.5 million before the crisis. Foreign milk labels are still viewed by consumers as safer, higher-quality and a mark of affluence, but domestic suppliers are fighting back with savvy branding and lower prices. The prize is clear: With only a quarter of Chinese moms breast-feeding, China’s infant-formula market will expand 21 percent to about $32 billion in 2023, according to Euromonitor International.….. Read

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