Organic Infant Formula Market is Expected to Grow at a CAGR of 7.56% from 2023 to 2032

November 2022, Market Research Future has published a Report on the Global Organic Infant Formula Market

Organic Infant Formula Market Highlights

The first organic infant formula was invented by Holle which produces wholesome, nutrient-rich biodynamic baby food. Initially only sold in Switzerland, Holle products are now enjoyed around the world because of widespread demand. Moreover, cow's milk or soy are the two main ingredients in organic baby formula. The sole distinction is that organic formulas employ milk or soy that is devoid of hormones, toxins, and pesticides, making them theoretically safer than non-organic formulas.

The increasing consumers' concerns about giving their infants milk free of pesticides, chemicals, and other contaminants have forced manufacturers to use several tactics to broaden their product offerings and provide better customer service, which is expected to drive market growth. For example, in March 2020, Junlebao launched ultree organic milk powder, the first organic milk powder of the brand using fresh milk from whole-industrial-chain self-owned farms and moderately hydrolyzed protein & probiotics and organic prebiotics. In December 2019, Junlebao launched the world’s first a2 infant & toddler formula produced by integrated industrial chain. Perfeito a2 infant & toddler formula, has been produced by cattle milk from the company-owned farms.

Market Synopsis

According to the MRFR analysis, the global Organic Infant Formula market is projected to reach USD 36.99 Billion by 2032 at a CAGR of 7.56%.

Developed economies, rising middle-class incomes, and high migration rates from rural to urban areas have led to the entry of international retailers into the global market. This has encouraged the expansion of existing retail outlets. The organized sector has grown significantly since many retail and convenience stores have increased. Additionally, many international brands operating in the global market have intensified competition within the retail market. Besides, many international brands operating in the infant formula market have intensified competition. Owing to the larger demand for infant formula globally, retailers and convenience stores display the products in their respective shops. Moreover, online retailing is becoming a popular choice among consumers for grocery shopping, which is expected to contribute to the increasing sales of infant formula products in the coming years. The expansion of e-commerce distribution channels helps infant formula product manufacturers to make their products easily available to customers.

COVID-19 Impact on Organic Infant Formula Market

The outbreak of COVID-19 has resulted in a lockdown across regions, border restrictions, and a breakdown of transportation networks. The economic uncertainty due to the pandemic outbreak is much more intricate than in past pandemics. The availability of labor is an important consideration, and there is a general labor shortage in the manufacture of infant formula products. The labor work which has directly hampered the production process witnessed the slowing down of the process.

The spreading of the coronavirus has affected the organic infant formula market, which has led to strict lockdown restrictions across many countries around the globe as the COVID-19 pandemic has caused disruption in the production process worldwide. During the pandemic, the government imposed certain economic restrictions. Companies producing important commodities were allowed to function with 50% of their personnel which has benefited the major player to sustain. The organic infant formula is obtained from various milk and microorganisms that go through different manufacturing processes. Subsequently, slowing down these processes has hampered the demand and supply of the product during the pandemic, which has created an enormous gap.

Competitive Landscape

The global Organic Infant Formula market is moderately fragmented and consists of some organized and unorganized industry players. Manufacturers focus mainly on expanding production capacities, continuous product launches, and collaborations with key stakeholders to gain a competitive advantage over other players. Key players Nestle (Switzerland), Danone (France), Abbott (US), Reckitt Benckiser Group PLC (England), Bellamy’s Organic (Australia), Perrigo Company PLC (Ireland), Shijiazhuang Junlebao Dairy Co., Ltd. (China), Friesland Campina (Netherlands), Heilongjiang Feihe Dairy Co., Ltd. (China), and Bubs Organic, LLC (Australia).

Segmentation

By Product

• Starting Milk Formula: Organic Infant Starting Formula Powder is manufactured with high-quality organic components, allowing parents to securely nurture their children. Milk from organic dairy cows is used to make the Organic Infant Starting formula. This indicates that dairy cows are raised without the use of synthetic growth hormones, are exclusively fed organic feed, and have year-round access to the outdoors. The formula provides total nutrition, non-GMO, and DHA levels that experts suggest. The Food and Drug Administration closely monitors all infant formulae to ensure they fulfill specific nutritional criteria, but organic baby formulas must meet government guidelines to receive the certified stamp. The materials and processing aid used to manufacture the organic recipe are all certified organic. Additionally GMO-free and required to adhere to the National List of Allowed and Prohibited Substances, these formulas lack various preservatives, flavors, and other ingredients that are included in standard formulas.


• Follow-On Milk Formula: Follow-on formula is used to satisfy the typical nutritional needs of babies aged six months to twelve months, as well as to introduce appropriate supplementary meals as part of a varied weaning diet. An alternative to breast milk that has about the same quantity of vitamins, minerals, proteins, lipids, carbs, prebiotics, linoleic acid, and other nutrients is follow-on formula milk.


• Special Milk Formula: This kind of formula may be beneficial for infants who have milk protein allergies, as well as those who suffer skin rashes or wheezing due to allergies. Lactose-free infant formulae are also used for galactosemia and for kids who have lactose intolerance. Typically, a kid who is sick and has diarrhea needs lactose-free formula. Special Infant Formula is a powdered milk substitute designed for preterm and low birth weight newborns. It is specifically created to support the baby's entire development and growth. For infants with certain health issues, there are specialized formulas.


• Others: The other segments include toddler milk formula. Children between the ages of 12 and 36 months are the target audience for toddler formulas. They vary from the baby formula in that they are designed to support the transition to a family diet; as a result, newborns less than 12 months old should not use them. According to the American Academy of Pediatrics (AAP) and the American Academy of Family Physicians (AAFP), young children between the ages of 12 and 24 should start drinking 16 to 24 ounces of whole dairy milk per day. The rising demand for toddler milk formula over cow’s milk is due to the benefits of fortification of toddler milk with fatty acids, vitamins, and minerals.

By Formulation

• Powdered Formula: The powdered formula is packaged in a jar with a measuring scoop. It's simple to locate and available in a wide range of flavors, including milk- and soy-based, hypoallergenic, organic, and a long list of others. Anyone may buy powder formula in little travel packets, but it must first be diluted with water before they can give it to their child. It is the most cost-effective formula available.


• Concentrated Liquid Formula: In terms of preparation, concentrated liquid formula is comparable to powdered formula. Users just combine a liquid concentration with water in this instance rather than a powder. Concentrated liquid formula, which the customer pours from a container, is more expensive than powder formula, but it is easier to make. This is the recipe that says to "simply add water as suggested and shake." Because all concentrate brands ask for equal parts water and concentrate, mixing and measuring are once more extremely simple. Although the necessity to mix liquid concentrate and powdered formulas with water may make them less practical in some situations, such as when traveling or in the middle of the night, these might still be excellent options for daily feedings. Growing social media usage and increased disposable income are two major factors in the industry's success.


• Ready to Feed Formula: The most useful kind of formula is one that is ready for use. It is less likely than powder formula to cause constipation in infants. The most convenient type of infant formula is ready to feed because users don't need to add any water to it before feeding as it is rich and thick and just opens and feeds. To prevent the error of mixing, this makes it a great alternative for traveling or leaving with a grandmother or other caretaker. It is less likely than powder formula to cause constipation in infants. The simplicity of ready-to-feed formula, a premixed liquid formula, comes at a significant price for bottle-feeding parents. Due to increasing awareness among parents regarding Infant formula products for children, the segment is anticipated to witness exponential growth during the review period.

By Distribution Channel

• Supermarkets and Hypermarkets: The segment includes stores, shops, and other outlets that provide several categories of products where customers can directly buy products. Supermarkets & hypermarkets account for most sales of Infant formula products.


• Convenience Stores: Convenience stores and neighborhood businesses have traditionally supported families and local communities in significant ways. As customers shifted to convenience stores instead of big supermarkets, they noticed a considerable increase in the overall amount of convenience shopping. From this change, the penetration of baby nutrition has grown year to date. The convenience channel is expected to develop further. To keep these new customers in the future, it will be even more important for store owners to guarantee adequate availability of infant feeding goods by stocking a suitable selection.


• Specialty Stores: An intensive range of Infant formula products and similar products made available in specialty stores are boosting the further growth of the products. Customers appreciate personalized suggestions at the store as the main element for help to make a rational selection. Ease of access to buying, availability of the store, and convenience of shopping have further increased the overall sales of global Infant formula products. Specialty stores or drug stores also contribute significantly to the distribution of Infant formula products. Due to the convenience of one-stop purchasing, consumers favor store-based channels.


• Online: The online segment includes e-commerce, wherein manufacturers distribute organic Infant formula products through various online shopping sites and their websites. Due to lockdowns and limitations, the pandemic, however, promoted a shift from dependence on traditional stores to online distribution channels. Because of the benefits and discounts associated with online purchasing, as well as the availability of consumer reviews and social media influencers, this market is growing. Companies are launching new products with enhanced quality and formulations, which cannot always be made available to consumers in different regions. The e-commerce channels help expedite this process so manufacturers may reach a wide consumer base. Additionally, this mode of distribution helps the company create brand awareness.

By Region

• North America: Key companies are creating partnerships with drugstore chains and online retailers to meet the growing demand for vegan and organic baby food, which is leading to significant income generation across the U.S. Through the introduction of new products, the introduction of new companies has assisted market expansion. For instance, a new newborn formula firm located in the United States named ByHeart announced in June 2021 that its largest infant formula clinical trial had been completed. ByHeart is now on the path to becoming the fourth fully integrated, FDA-registered infant formula brand in the nation. The country now has a greater demand for baby formula due to increase per capita healthcare costs and an increase in working moms. The percentage of working women in the United States is relatively high and will increase during the following ten years. According to the Catalyst Organization's report for 2021, women make up 56.1% of the US population and nearly half (47.0%) of the workforce. The number of working-age women was around 75,699,000, and it is anticipated to increase during the ensuing years.


• Europe: The rising demand for baby formula across the region is being facilitated by the increasing penetration of retail outlets and internet pharmacies. The manufacturing of baby formula is rising because of an increase in the number of working moms in the UK, Germany, and France. As a result, the aforementioned information is helping to fuel the market's overall expansion in terms of value sales.


• Asia-Pacific: The rising birth rates in nations like China and India are a major factor in the APAC market's growing demand. Furthermore, domestic industry and increasing dependence on imports is in the face of rising demand for growth, quality, and higher premiums for Infant formulas.


• Rest of the World: Demand is rising in the Middle East and Africa because of a growth in the number of working women and greater awareness of the benefits and nutritional value of the products. Additionally, the greater familiarity with the western way of life and the underlying strength of the economy is expected to have a favorable effect on product growth. The retail industry in Saudi Arabia is expanding quickly, and the demand for infant formula has been constantly increasing. Additionally, the expansion of major industry players in the area is anticipated to assist market expansion. For instance, a major producer of infant formula, Nestlé, revealed in 2018 that it had reached a deal to purchase Pfizer's infant nutrition division for USD 11.8 billion to broaden its distribution network in the Middle East and Africa.