MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET MARÍA MASCARAQUE
GLOBAL MARKET INSIGHT FUTURE OUTLOOK
Retail value (US$ billion), constant, fixed 2015 exchange rate % Y-Y Growth MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Up by 7% in 2015, FF drives once again the milk formula market 3 50 GLOBAL MILK FORMULA MARKET 2010-2015 30 Organic Milk Formula 45 40 25 Special Baby Milk Formula 35 30 25 20 20 15 10 FF Milk Formula FF Milk Formula % Y-O-Y growth 15 10 5 0 2010 2011 2012 2013 2014 2015 5 0-5 Special Baby Milk Formula % Y-O-Y growth Organic Milk Formula % Y-O-Y growth
Absolute Growth (US$ billion), constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET FF milk formula outperforms other HW packaged food categories 4 16 100% Others 14 90% 12 80% NH Nuts 10 8 6 4 2 70% 60% 50% 40% 30% 20% FF Breakfast Cereals NH High Fibre Bread Reduced Fat Milk 0 FF Milk Formula NH Other Non-Dairy Milk Alternatives NH Nuts Probiotic Plain Yoghurt FF Flavoured Milk Drinks 10% 0% FF Milk Formula
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET China alone accounted for 46% of milk formula market in 2015 5 US$20 bn 83 mn children aged 0-4 Exclusive breastfeeding rate (<6 m) 28%
Retail Value (US$ million) constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Nestlé leads, accounting for 21% of the global milk formula market 6 GLOBAL PERFORMANCE OF LEADING MILK FORMULA COMPANIES 12,000 10,000 8,000 6,000 Nestlé SA Mead Johnson Nutrition Co Danone, Groupe Abbott Laboratories Inc Royal FrieslandCampina NV 4,000 2,000 0 2010 2011 2012 2013 2014 2015
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Company competition is fierce and varies regionally 7 MILK FORMULA MARKET: COMPANY SHARES IN 2015 100% 90% 80% 70% 60% 50% 40% 30% 20% Others Abbott Laboratories Inc Royal FrieslandCampina NV Danone, Groupe Mead Johnson Nutrition Co Nestlé SA 10% 0%
Retail Value (US$ million) constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Local Chinese brands within the leading brands globally 8 3,500 3,000 GLOBAL PERFORMANCE OF LEADING MILK FORMULA BRANDS Enfamil. Mead Johnson Nutrition Co S-26. Nestlé SA 2,500 2,000 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 Similac. Abbott Laboratories Inc Enfagrow. Mead Johnson Nutrition Co Nan. Nestlé SA Beingmate. Hangzhou Beingmate Group Co Ltd Yili. Inner Mongolia Yili Industrial Group Co Ltd Friso Gold. Royal FrieslandCampina NV Dumex. Danone, Groupe
Other Claims MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Nutritional science as a driver of innovation 9 Probiotics Calcium/ Iron/ Zinc Omega 6 ARA FF Prebiotics FOS/GOS Vitamins C, A,D Omega-3 DHA, EPA Choline, Lutein
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Probiotic s research is still in the spotlight 10 Digestive Health Probiotics Research Immune Support Prevention of Childhood Allergies Nestlé (June 2015) patent L. rhamnosus + B. longum L. paracasei + B. longum Colic L. reuteri Protectis: reduction in crying time (Szajewska et al., 2012) L reuteri DSM 17938: improvement of colic symptoms by reducing crying and fussing times (Chau et al., 2015)
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Milk formula composition becoming more like breast milk 11 New tailored lipid (OPO) (sn-2 palmitate) Mimics composition, and structure of human milk fat Enhance babies immunity, improve comfort and support health growth NUTURIS: lipidic matrix imitating structure of human milk Currently: small fat droplets primarily coated by proteins. Thick protein-only interface Nuturis : large fat droplets with a phospholipid coating. Thin interface - phospholipids, proteins and cholesterol Gallier et al., 2015
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Explore nutritional requirements in emerging countries 12 DANONE Health authorities Local associations
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Good night's sleep and convenience key focus areas 13 Good night's sleep Breast milk easier to digest Higher percentage of carbohydrates Enrich with sleep-promoting substances: alpha-lactalbumin, uridine, adenosine and tryptophan Source: Laboratorios Ordesa Increasing convenience Nespresso for babies: 6 types of ageappropriate BabyNes capsules (1 36 months) China, Hong Kong, France USA, Switzerland Future: fortified flavoured milk drinks for children older than 3 years Source: Gerber BabyNes
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Convenience key for working mothers 14 Puleva Peques 3 Lactalis, Spain Handy pack sizes for "ready to drink" Source: Lactalis Puleva, S.L.U. Haihai Stick Pack Wakodo, Japan Individually-packaged liquid milk formula Source: Asahi breweries, LTD Meiji Hohoemi cube Meiji, Japan Solid milk formula cubes Source: Meiji Holdings Co.,Ltd.
Billion Million MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Working mothers have increased by 6% and women being the head of household by 16% in 2010-2015 15 GLOBAL EMPLOYED FEMALE POPULATION 2010-2015 HEAD OF HOUSEHOLD [FEMALE] 2010-2015 1.22 580 1.20 560 1.18 540 1.16 520 1.14 500 1.12 480 1.10 460 1.08 2010 2011 2012 2013 2014 2015 440 2010 2011 2012 2013 2014 2015
GLOBAL MARKET INSIGHT FUTURE OUTLOOK
Retail value (US$ million), constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Growth expected to be more than 20 times higher in emerging vs developed countries 17 80000 70000 MILK FORMULA PERFORMANCE IN DEVELOPED COUNTRIES VS. EMERGING AND DEVELOPING COUNTRIES 60000 50000 40000 30000 20000 10000 US$ 1bn US$ 24bn Developed countries Emerging and developing countries 0 2015 2016 2017 2018 2019 2020
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET China will keep leading the growth within milk formula 18 Absolute growth (2015-2020) US$20 billion The end of the One-child policy
Unit price (US$/kg), constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Move towards premiumisation in emerging markets 19 MILK FORMULA UNIT PRICE IN EMERGING MARKETS 20 18 16 14 12 10 8 6 4 2 0 Growth: 5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET MEA is expected to be the 2 nd fastest growing region by 2020 20 MILK FORMULA MARKET % GROWTH: REVIEW vs. FORECAST PERIOD 80 70 60 50 40 44.9 2010-15 % 2015-20 % 30 20 19.4 10 0 Asia Pacific Australasia Latin America Eastern Europe MEA North America Western Europe
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Where to invest in MEA? 21 China Saudi Arabia Turkey Chile Vietnam Egypt Poland Greece Spain South Korea MILK FORMULA GROWTH: TOP AND BOTTOM COUNTRIES IN 2015-2020 -5 0 5 10 15 20 CAGR %
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET National policies to further fuel breastfeeding 22 WHO Exclusive breastfeeding up to 6 months of age Objective by 2025 Policies strengthened to promote breastfeeding Increase exclusive breastfeeding in the first 6 months to at least 50%
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Initiatives to promote breastfeeding across the world 23 South Korea - Education campaigns - Academy of Breastfeeding Medicine in Korea UK - Children s Health policy - NHS support - WHO Code of Marketing of Breast Milk Substitutes China - WHO Code of Marketing of Breast Milk Substitutes - Chinese law update (2015) USA - Surgeon General's Call to Action to Support Breastfeeding - The Baby-Friendly Hospital Initiative and La Leche League
%Growth 2015-2020, constant, fixed 2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Toddler milk formula outperforms in saturated developed markets 24 25 MILK FORMULA BY TYPE IN DEVELOPED COUNTRIES 20 20.7 15 10 5 0.4 3.9 0 Toddler milk formula Follow-on milk formula Standard Milk Formula
Retail Value (US $ million) constant, fixed2015 exchange rate MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Growing appetite for natural, organic ingredients in developed countries 25 ORGANIC MILK FORMULA PERFORMANCE 500 450 400 350 300 250 200 Developed countries Emerging and developing countries 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192020
MARKET OVERVIEW: IDENTIFYING NEW TRENDS AND OPPORTUNITIES IN THE GLOBAL INFANT FORMULA MARKET Milk Formula Strategies 26 Focus on toddler milk formula in saturated developed markets Product diversification, notably through highmargin organic ranges in developed countries Attempting to establish stronger and premium brand images in emerging markets Identify local nutritional needs in new regions, mainly in emerging countries Improve the convenience of packaging brings a key competitive advantage to manufacturers
THANK YOU FOR LISTENING Q&A María Mascaraque Associate - Health and Wellness Research maria.mascaraque@euromonitor.com @MascaraqueMaria https://uk.linkedin.com/in/mariamascaraque