After years of growth, the global infant formula market is showing signs of stagnation, according to a report compiled by Teno Business Insight and Performance.

Results in the first half of 2020 for the ‘Big Four’ infant formula companies (Nestlé, Danone, Abbott and Mead Johnson) indicate a slowing market due to a decline in sales growth in Europe and the Americas, coupled with the impact of destocking post-COVID-19 lockdown.

However, it is China, which has long been the centre of growth in the infant nutrition sector, that is now becoming a major challenge for the ‘Big Four’, due to what infant formula companies are calling the ‘centricity’ of the market.

"While overall sales growth is under pressure, the 'Big Four' continue to develop and introduce new infant formula products. Examples include specialist ingredients and bioactives such as Lactoferrin and - on the back of the A2 success - a number of 'rare' milks including Goat, Sheep and Organic milk based infant formula" said Eamonn Burke, director with Teno.

Danone announced a €100m investment in China

Through a raft of new regulations, the Chinese government has tried to limit the market dominance of imported infant formula and help revive sales for domestic manufacturers.

Nestlé, the market leader in infant nutrition, reported an overall double-digit decline in sales in China, while Danone said its infant nutrition sales in China continue to be negatively impacted by the recent Hong Kong border closure.

Danone announced a €100m investment in China, while Nestlé has started producing its Belsol brand there.

US company Abbott reported very strong infant formula sales in its home market in the US (+8%), but sales to international customers were back 1% year-on-year. Likewise, US-based company Mead Johnson, which is now owned by Reckitt Benckiser in the UK, posted a near 5% decline in infant formula sales.

The ‘Big Four’ infant formula companies account for roughly 70% of global infant formula sales.