A Detailed Analysis of the A2 Infant Formula Market Based on Growing Consumer Health Consciousness and Awareness, New Product Launches, and Increasing Instances of Milk Allergy and Sensitivity Cases
Industry: Food and Beverages
Published Date: January-2024
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 169
Report ID: PMRREP33698
The global A2 infant formula market is forecast to expand at a CAGR of 15.0% and thereby increase from a value of US$843.9 Mn in 2023, to US$2,244.7 Mn by the end of 2030.
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Attributes |
Key Insights |
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A2 Infant Formula Market Size (2023E) |
US$843.9 Mn |
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Projected Market Value (2030F) |
US$2,244.7 Mn |
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Global Market Growth Rate (CAGR 2023 to 2030) |
15.0% |
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Historical Market Growth Rate (CAGR 2018 to 2022) |
12.0% |
Increasing demand for A2 infant formula, which is believed to be a potentially healthier option, is driven by consumers' growing understanding of the nutritional distinctions between A1 and A2 proteins in milk. Consumers concerned about their health can be more aware of digestive health problems. Parents concerned about their infants' digestive health will find A2 infant formula appealing because of its possible ease of digestion. Customers who care about their health frequently look for natural and niche products. A2 infant formula made from cretain milk types supports this demand for natural and specialized nutrition.
Health-conscious parents are more inclined to look for the best nutrition for their babies. Positioned as a high-end and potentially advantageous product, A2 infant formula fits this focus on nutrition for growing children. The demand for A2 infant formula can be positively influenced by awareness efforts highlighting the supposed health benefits of A2 milk, such as simpler digestion. Compared to traditional formulas, parents concerned about their child's sensitivity to allergens may be more likely to select A2 infant formula because they believe it to be hypoallergenic or less allergic.
Ongoing education programs on the distinctions between A1 and A2 proteins and the possible advantages of A2 baby formula raise consumer knowledge and comprehension. Positive feedback from parents who have used the A2 infant formula can help spread the word about it, raising awareness and building consumer confidence.
Increasing Number of Milk Allergies and Sensitivities Worldwide
Some believe A2 milk is less likely to trigger allergy responses than A1 milk since it solely includes the A2 beta-casein protein. For parents of infants who could be at risk of allergies or sensitivities, this makes A2 infant formula an appealing choice. People who are lactose intolerant are frequently offered A2 milk as an alternative. For newborns who might feel uncomfortable or have digestive problems with conventional milk-based formulas, A2 infant formula offers a source of nourishment.
The demand for A2 products may rise due to parents' perceptions that A2 infant formula is a healthier alternative for babies with sensitivity to milk. Medical professionals, including pediatricians, may suggest A2 infant formula to babies with confirmed or suspected milk sensitivities or allergies to encourage its use.
In addition, brands of infant formula with A2 can deliberately target and serve particular customer niches, such as parents looking for hypoallergenic or allergy-friendly solutions for their babies. The market will expand as more parents actively seek out A2 infant formula as a remedy for their infants with allergies or sensitivities as awareness of A2 milk and its potential advantages increases.
The belief that A2 infant formula is a good choice for babies with sensitivities may be strengthened by further research on the possible effects of A2 milk on digestive health. More and more parents are prepared to spend money on high-end, specialized items for their newborns. This premiumization of infant feeding aligns with the characteristics of the A2 infant formula, which is hypoallergenic.
High Production Costs
Specialized dairy herds that exclusively yield milk with the A2 beta-casein protein are needed to create A2 milk. Keeping up with and overseeing these herds can be expensive. During manufacture, more stages, tools, and technologies are needed to separate the A2 and A1 proteins. Compared to traditional formula manufacture, these procedures may result in higher production costs.
Stringent quality control procedures are required to guarantee that the finished A2 infant formula satisfies regulatory requirements and retains the intended composition. Production costs will rise due to the advanced testing and monitoring needed. It can be difficult to guarantee a steady and dependable supply of A2 milk for production. Cost increases may be caused by supply chain-related problems, such as sourcing and logistics.
Sustained Competition from Conventional Formula Products
Conventional baby formulas have been around for many years and have earned consumers' trust. Effective marketing and education are necessary to break this trust and persuade parents to switch to A2 infant formula. In the conventional formula industry, well-known brands are very recognizable. The familiarity and reputation of these established products may be too much for A2 infant formula companies to match.
The most of pharmacies and retail stores carry conventional infant formula. A2 baby formula accessibility issues could arise, particularly in areas with less developed distribution networks. Large multinational companies that make conventional formulas frequently allocate significant marketing costs. A2 infant formula brands may need more resources to compete with these budgets, particularly if they have limited resources.
Rising Birth Rates Worldwide
The market for baby feeding products, including formulae, is growing due to rising birth rates. The market potential for A2 infant formula increases with the number of infants. The demand for infant feeding products is rising with the number of babies born worldwide. By positioning itself as a specialized and potentially advantageous option, A2 baby formula may take a piece of this expanding market. Changes in lifestyles and urbanization frequently result in modified dietary habits, which can increase demand for convenience foods like baby formula. Parents in cities who may choose to use the formula for their infants can be served with A2 infant formula.
Moreover, rising birth rates are frequently linked to a growing middle-class population. As income levels grow, parents may be more inclined to spend money on specialized and high-end goods such as A2 newborn formula for their babies. Increasing birth rates are a worldwide phenomenon, not limited to one area. This gives A2 infant formula brands the chance to reach a wider audience and serve a more varied group of customers.
The demand for A2 infant formula may increase due to parents' growing knowledge of the value of early childhood nutrition and their desire to provide their babies with high-end, specialized formulas. Pediatricians and other medical professionals are frequently very important in advising parents on newborn feeding. The recommendation of A2 baby formula as a viable choice may encourage consumer acceptance.
The market for A2 infant formula is expected to develop at a healthy rate due to growing consumer awareness of its possible health benefits. Due to its improved digestion, the A2 formula is anticipated to increase demand sharply as lactose intolerance and other dairy-related sensitivities grow increasingly common. A trend towards premium and organic A2 formulations is anticipated in the market, in line with consumers' increasing desire for clean-label and nutritionally enhanced products. With a growing middle class and increased awareness of nutritional options, Asia-Pacific is expected to dominate the global A2 infant formula market.
Maintaining market momentum will depend heavily on ongoing innovation in product composition, packaging, and marketing tactics. Technological developments in production combined with regulatory support for A2 milk products could increase market competitiveness. The competitive landscape is expected to change due to strategic mergers and acquisitions, partnerships, and industry collaborations. The market's future will likely be shaped by changing consumer preferences and the emphasis on ethical and sustainable activities. To succeed in the changing A2 infant formula business, industry participants must be flexible in facing possible obstacles, including pricing pressures and regulatory complications.
Supply-side Dynamics
The a2 Milk Company in New Zealand is a major player in manufacturing A2 milk and formula worldwide. They operate in the United States, China, Australia, New Zealand, and other nations. A2 infant formula brands, such as NAN SUPREME, are distributed in multiple countries by this global food and beverage conglomerate based in Switzerland. Different sites are used depending on the market to generate Nestle's A2 formulations. American-based Ripley Farms manufactures dairy products, notably baby formula, derived from A2 milk. The US is the location of their manufacture. This Indian company sells Vedaaz A2 Platinum, an infant formula brand, for A2. Most of their manufacture takes place in India.
Additionally, the largest consumer market for A2 infant formula is China. With growing discretionary means and knowledge of the possible health benefits of A2 milk, Chinese parents are quick to accept premium formula options. In China, businesses such as a2 Milk Company and indigenous brands like Feihe, and Yashili have experienced notable success. A2 infant formula is growing in the US's second-largest consumer market due to premiumization tendencies and rising consumer awareness. It is still smaller than China or the Oceania region, though. The US market is home to brands like Bellamy's Organic, which provides A2 alternatives, and a2 Milk Company.
Which Age Group is at the Forefront of Demand Generation?
The Infant Formula (0 to 6 months) Category Surges Ahead as Digestive Sensitivity in Infants Prevails
The age group segment is segmented into infant formula (0 to 6 months), follow-on formula (6 to 12 months), and growing-up formula (12 to 36 months). The infant formula (0 to 6 months) segment is expected to dominate the market. Some ingredients in conventional formulas may cause gastrointestinal distress or intolerance in certain newborns.
With its emphasis on the A2 protein, the A2 Infant Formula is touted as easier to digest, making it appealing to parents of young newborns. Nonetheless, the follow-on formula (6 to 12 months) segment of the A2 infant formula market is expanding at the quickest rate. A2 Follow-on Formula offers an option emphasizing the A2 protein for parents who start formula-feeding their babies between 6 and 12 months.
What is the Most Preferred Form of A2 Infant Formula?
Liquid Infant Formula Most Preferred for its Convenience
The form segment is bifurcated into powder, liquid, and semi-liquid. The liquid market segment is the largest for A2 infant formula. Because liquid A2 infant formula doesn't require measuring or mixing like powdered formula, it can be more convenient for parents. Options that are ready to feed can be more tempting to working parents. Nevertheless, the market segment exhibiting the most rapid growth is powder. By varying the proportions of powder and water, parents can tailor the concentration of powdered formulations. Parents may find this flexibility crucial to customize the formula to meet their infant's unique needs.
Which is the Largest Contributing Distribution Channel?
Hypermarkets or Supermarkets Remain the Largest Revenue Contributors
The distribution channel segment is sub-segmented into hypermarkets or supermarkets, convenience stores, departmental stores, wholesale stores, specialty health and wellness stores, independent retailers, specialty stores, pharmacies and drugstores, and online retailers. Hypermarkets or supermarkets represent the greatest market segment for the A2 infant formula industry. Supermarkets and hypermarkets generally sell A2 infant formula in various forms, including powder, liquid, and follow-on formulas. This variety of options helps meet the needs and preferences of various parents.
On the contrary, online retailers are the market segment characterized by the most rapid growth. Parents can easily get A2 infant formula from the comfort of their homes with the help of online retailers. Those who are busy parents or have limited access to physical stores will find this extremely helpful.
Asian Markets up from Pacing Adoption Due to Consumer Affluence, and Growing Fondness for High-end Baby Products
The disposable income of individuals rises in tandem with their entry into the middle class across Asian economies. Parents with more purchasing power can afford high-end, specialized products like A2 baby formula. The growing middle class frequently shows a preference for high-end, superior goods. Positioned as a high-end and potentially advantageous option, A2 infant formula suits this group's tastes.
The growing middle class is more likely to be health-conscious and prepared to spend money on goods considered better for their health or more nutritionally sound. A2 baby formula's health-conscious posture can draw in this customer base. Due to industrialization and economic growth across the major Asian countries, more people are relocating to metropolitan regions, altering eating and lifestyle habits. Due to its convenience and supposed health benefits, A2 infant formula may be chosen by urban parents.
The Continued Consumption of High-end, Specialised Products Keeps North America Afloat
North American customers, particularly parents, highly value nutrition and overall well-being. The belief that high-end, specialty infant formulae such as A2 have improved nutritional value fuels the market for these products. In North America, parents are frequently prepared to spend money on goods to improve their children's general health and well-being.
Positioned as a luxury product, A2 baby formula corresponds with this tendency among parents. North America has an increasing trend towards natural and organic products, including infant nourishment. A2 baby formula, made from a particular kind of milk, fits this larger market trend well.
Prominent organizations, including The A2 Milk Company and Bellamy's Organic. are at the vanguard of this sector; their whole approach is centered on emphasizing the possible advantages of A2 milk, particularly on its lack of A1 beta-casein protein, which some people think makes children with sensitivities more prone to gastrointestinal distress and other problems. They use scientific studies and professional recommendations to establish credibility and confidence about the difference in A2 milk.
As a premium product, The a2 Milk Company charges more for its A2 Platinum infant formula than other formulas. To develop a brand image of quality, exclusivity, and exceptional nourishment for newborns, they spend on stylish packaging, focused marketing campaigns, and collaborations with influencers.
Bellamy's Organic caters to health-conscious parents looking for natural ingredients and the possible health benefits of A2 milk by utilizing the twin advantages of organic certification and A2 milk protein in their infant formula. They market their formula as a natural option for sensitive kids, highlighting the benefits of organic agricultural methods and A2 cows produced without growth hormones. Throughout their supply chain, Bellamy's Organic strongly emphasizes sustainable practices and ethical sourcing. They put animal welfare first and collaborate with certified organic farms. Customers who care about the environment will respect their dedication to ethical business methods, improving their brand's perception.
New Product Launch
The A2 Milk Company introduced its A2 Platinum® Premium Infant Formula to the American market in September 2023. The formula contains exclusively A2-type protein and is prepared with A2 milk®, acquired from dairy farmers in the South Island of New Zealand.
Market Impact: The introduction may greatly increase public knowledge of A2 milk and its possible advantages for babies allergic to A1 beta-casein protein. This can result in a rise in the demand for A2 baby formulae, not simply from the a2 Milk Company. The US market for A2 infant formula is already expanding, and the a2 Milk Company's arrival could spur this expansion by drawing in new customers. Other manufacturers of A2 formula might also profit from this. The premium positioning and pricing of The a2 Milk Company may contribute to the premiumization trend in the baby formula industry. Other high-end brands, such as organic and specialist formulae, may profit from this.
(Source: Dairy Foods Magazine)
In November 2022, Perrigo Company Plc announced its intention to acquire the Good Start brand and a Wisconsin manufacturing facility from Nestle SA, as American merchants were finding it difficult to meet the demand for baby formula. While the specific financial details of the agreement remained undisclosed, Perrigo said it was investing US$ 170 million to fortify and grow its infant formula production in the US.
Market Impact: The purchase assisted in reducing the scarcity of baby formula that afflicted the United States in 2022. Thanks to Perrigo's expanded capacity, more Good Start and other store-brand formulas could be produced, providing much-needed relief to parents with difficulty finding formulas for their infants. With Perrigo's big-time debut in the market, there is more competition among well-known brands like Abbott and Reckitt Benckiser. Customers may benefit from reduced costs and a greater selection of infant formula options as a result of this.
(Source: Reuters)
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Attribute |
Details |
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Forecast Period |
2023 to 2030 |
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Historical Data Available for |
2018 to 2022 |
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Market Analysis |
US$ Million for Value |
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Key Regions Covered |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon request |
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The market is anticipated to grow at a CAGR of 15.0% during the projected period.
The A2 infant formula market size was valued at US$843.9 million in 2023.
China held the largest market share in 2023.
The prominent players in the market are The A2 Milk Company, Synlait Milk, Bubs Australia Limited., Care A2+, Bellamy's Organic, Abbott, Mead Johnson, and Perrigo.
The powder segment is expected to grow at the fastest CAGR while the liquid form leads.
