Organic Infant Formula Market

Growing concerns related to child health are driving the market growth

Market CAGR for organic infant formula is being driven by the growing concern about consuming artificial ingredients infused food products by infants and young children has grown over the few years. Parents have become more aware of different food ingredients and are more concerned about what their babies and toddlers consume than what they consume as adults. With rapid internet penetration, parents know what's new in the market and suitable for their kids and are ready to spend more on baby food than adult food.

Moreover, the availability of organic products in smaller towns is also increasing, and this factor is playing a significant role in driving the organic infant formula market revenue.

Additionally, growing health problems such as cancer in women drives the market growth. As the prevalence of health complications like breast cancer and diabetes increases, overall breastfeeding rates have witnessed a steep fall in recent years. According to a WHO report, around 2.3 million women across the globe had breast cancer in 2020, whereas 685,000 lost their lives. Moreover, 1 in 3 female cancer cases in the US is attributed to breast cancer. Not just United States but breast cancer has become the most common cancer form worldwide as it accounts for approximately 12 percent of all cancer cases annually.

As a result, the breastfeeding trend is on the decline, ultimately driving the demand for organic infant formula.

The market is driven by promising demand dynamics such as fertility and suboptimal breastfeeding rates, indicating early dependence on breast milk substitutes. The modernization and evolving lifestyles of consumers are also driving product growth. The convenience of the product, along with compositional enhancement, is propelling the demand among parents. The increasing investment by prominent key players in the research and development of creative products is anticipated to positively impact the infant formula market growth. For instance, in January 2019, Nestle S.A. opened a new research center in Ireland.

The center will focus on developing inventions in milk-based infant and maternal nutrition products for the world market.

The market is slowly transforming from a niche category to a significant industry category. The availability of products differs widely in each country depending on the market environment. In developed countries, such as Germany, the market for organic infant formula is strong, as large retail chains account for about 70% of products sold in Germany. Although these products are costlier than conventional products, retailers apply higher discounts, which make the consumer buy the products.

The expansion of supermarkets and hypermarkets in tier 2 and tier 3 cities is a major driving factor for the growth of the market in developing countries, as consumers are aware of the products and have been buying them for the last few years.

The rise of e-commerce platforms is transforming the Global Organic Infant Formula Market Industry by enhancing accessibility to organic products. Online shopping provides parents with the convenience of purchasing organic infant formulas from the comfort of their homes, often with a wider selection than traditional retail outlets. This trend is particularly significant in urban areas where busy lifestyles may limit shopping time. E-commerce also facilitates the dissemination of information regarding product benefits, further influencing purchasing decisions. As online sales channels expand, the market is likely to witness substantial growth, aligning with the overall upward trajectory of organic product consumption.

The Global Organic Infant Formula Market Industry is poised for remarkable growth, with projections indicating a market size of 22.2 USD Billion in 2024 and an anticipated increase to 44.8 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate of 6.58% from 2025 to 2035, reflecting the increasing consumer demand for organic products. The market dynamics are influenced by various factors, including rising health consciousness, regulatory support, and changing consumer preferences. As these trends continue to evolve, the organic infant formula sector is likely to expand significantly, presenting opportunities for manufacturers and retailers alike.

The Global Organic Infant Formula Market Industry is experiencing a surge in demand driven by increasing health consciousness among parents. As more caregivers prioritize organic products for their infants, the market is projected to reach 22.2 USD Billion in 2024. This trend is likely influenced by growing awareness of the potential health benefits associated with organic ingredients, such as reduced exposure to pesticides and synthetic additives. Parents are becoming more discerning, often seeking certifications and labels that indicate organic sourcing. This shift in consumer behavior is expected to propel the market forward, as organic infant formulas are perceived as safer and healthier alternatives.

The Global Organic Infant Formula Market Industry is also benefitting from rising disposable incomes, particularly in developing regions. As families experience improved economic conditions, they are more inclined to invest in premium products, including organic infant formulas. This trend is evident in emerging markets where parents are willing to pay a premium for perceived health benefits. The increasing purchasing power is expected to drive market growth, as more households prioritize quality over cost. This shift could potentially lead to a compound annual growth rate of 6.58% from 2025 to 2035, reflecting the growing inclination towards organic options.

Government regulations and support for organic farming practices are pivotal in shaping the Global Organic Infant Formula Market Industry. Various countries are implementing stringent guidelines to ensure the quality and safety of organic products, which enhances consumer trust. For instance, the establishment of organic certification programs helps standardize production processes, thereby increasing the availability of organic infant formulas. This regulatory framework not only encourages manufacturers to adopt organic practices but also reassures parents about the integrity of the products they purchase. As a result, the market is likely to expand, with projections indicating a growth to 44.8 USD Billion by 2035.

Sustainability is becoming a key consideration for consumers in the Global Organic Infant Formula Market Industry. Parents are increasingly drawn to brands that demonstrate a commitment to environmentally friendly practices, such as sustainable sourcing and eco-friendly packaging. This preference is shaping purchasing decisions, as consumers seek products that align with their values. Brands that effectively communicate their sustainability efforts may gain a competitive edge in the market. As awareness of environmental issues continues to rise, the demand for organic infant formulas that prioritize sustainability is expected to grow, contributing to the overall expansion of the market.

By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American organic infant formula market will dominate due to significant market players and the higher spending capacity of consumers in these regions. The booming organic food sector in the region has contributed to the increasing demand for several baby food products, driving market growth in this region. Further, the German organic infant formula market held the largest market share, and the UK organic infant formula market was the fastest-growing market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: ORGANIC INFANT FORMULA MARKET SHARE BY REGION 2022 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe's organic infant formula market accounts for the second-largest market share owing to the growing demand for clean-label and sustainable infant formula. Further, the German organic infant formula market held the largest market share, and the UK organic infant formula market was the fastest-growing market in the European region.

The Asia-Pacific organic infant formula Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to expanding awareness regarding the consumption of organic infant formula and rising per capita disposable income. Moreover, China’s organic infant formula market held the largest market share, and the Indian organic infant formula market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the organic infant formula market grow even more. Market players are also undertaking several strategic activities to expand their footprint, with important market developments including recent product launches, mergers and acquisitions, higher investments, contractual agreements,  and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the organic infant formula industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the organic infant formula industry to benefit clients and increase the market sector. Major players in the organic infant formula market, including Nestle (Switzerland), Danone (France), Abbott (US), Reckitt Benckiser Group PLC (England), Bellamy's Organic (Australia), Perrigo Company PLC (Ireland), and others, are attempting to increase market demand by investing in research and development operations.

Nestle SA is a manufacturer and marketer of food products and beverages. The company's product portfolio comprises baby foods, bottled water, cereals, chocolates and confectionery, coffee, culinary products, plant-based foods, chilled and frozen foods, dairy products, nutritional products, ice cream, and pet care products. Nestle markets its products under the Aero, Purina Alpo, Milkybar, Nestle Ice Cream, Cerelac, Nescafe, Nespresso, Nido, Perrier, S.Pellegrino, Acqua Panna, Nestea, Milo, Maggi, Buitoni, Cailler, Movenpick, Purina, Boost, Gerber, and Kit Kat brand names. In August 2021, Nestle announced the successful acquisition of New York, United States-based The Bountiful Company.

Nestle made a staggering $5.75 billion payment to KKR (the actual owner of Bountiful) to wrap up the process.

Danone SA is a manufacturer and producer of dairy and nutritional products. The company offers fresh dairy products, bottled water, early-life nutrition and medical nutrition products. Its portfolio comprises yogurt, fermented dairy products, dairy specialties, plant-based nutritional products and beverages, and specialized food for babies and frail older people. Danone also offers packaged water and flavored and sparkling water. The company markets its products under the names of Danone, Activia, Evian, Volvic, Aqua, Gallia, Actimel, Nutricia, and Bledina. Danone distributes its products through retail chains, traditional market outlets and specialized distribution channels, including hospitals, clinics and pharmacies.

In August 2022, Danone launched a new dairy and plant blend baby formula to meet parents' desire for more plant-based foods.