Research Report on Infant Formulas Market in China

This report carries on a comprehensive and detailed analysis by six aspects including China’s supply of raw material milk and milk-based raw materials, China’s related policies on infant formula milk powder industry, China's infant formula milk powder market, major competitors and respective market shares of China's infant formula milk powder market, China's development trend of infant formula milk powder, and threats and opportunities that infant formula milk powder market are facing.

Research Background

In terms of the current dairy products with large commercial scale and profitability, infant formula milk powder is undoubted focus and hotpoint of industrial competition. According to the preliminary estimation of BOABC, currently the sale gross profit margin of foreign-funded infant formula milk powder brands represented by Mead Johnson and Dumex has reached 60%, and that of domestic infant formula milk powder brands represented by Yili, Beingmate, Shengyuan and Yashili has also reached 40-60%, which far exceeds 25% average gross profit margin of the entire dairy production industry, and attracts a large number of milk processing enterprises to turn to produce infant formula products, meanwhile, the capital outside the industry also saw the tremendous profits of the product, and has made strong capital penetration to the product. In recent years, infant formula milk powder companies have got listed in and outside China, and have obtained a wealth of capital, so they have made the formula milk powder to become one of the products with the highest investment value.

At present, the entire market size of China's infant formula milk powder is almost $50 billion, there are a hundred of production and processing enterprises with business license issued by the state, the whole market is obviously divided into high end and mid & low end, brand concentration is higher in the markets with different grades. With the increasing monitoring efforts of Chinese government on the whole dairy processing industry including infant formula milk powder companies, the brand concentration of infant formula milk powder market is expected to continue to increase.

This report carries on a comprehensive and detailed analysis by six aspects including China’s supply of raw material milk and milk-based raw materials, China’s related policies on infant formula milk powder industry, China's infant formula milk powder market, major competitors and respective market shares of China's infant formula milk powder market, China's development trend of infant formula milk powder, and threats and opportunities that infant formula milk powder market are facing. The data in this report includes the relevant official data of China, the data provided by dairy enterprises, data from terminal market research institutions as well as those that BOABC accumulated through years of cooperation with the industry. The data is authoritative, objective and forward-looking.

BOABC is a domestic well-known professional agricultural consulting company, and has strong R & D strength and excellent market research team, over the years, it has provided services for Chinese relevant government departments, international organizations, multinational companies, domestic well-known companies, boasting a good reputation. BOABC has attached great importance to China's dairy industry development, its main R & D personnel are the members of the related dairy policy "think tank" of the Chinese government, have a deep understanding on the China's whole industrial chain of dairy industry, and have maintained a good relationship with Dairy Association of China, China Dairy Industry Association and local related associations, also have a good cooperative relationship with domestic well-known dairy companies (such as Yili, Mengniu, Bright and Sanyuan, etc.) and foreign-funded companies (Pfizer/Wyeth, Dumex, Mead Johnson, etc.). The report shall provide valuable reference for domestic and foreign dairy enterprises, raw materials and ingredients suppliers infant formula milk powder, equipment suppliers, investment and financing institutions to understand, know and research Chinese infant formula milk powder market, and expand Chinese infant formula milk powder market.
 
CONTENTS

1. Analysis of China’s Milk Powder Production 11

1.1 Classification of Milk Powder in China 11
1.2 Analysis of Milk Powder Production 12
1.2.1 WMP 13
1.2.2 SMP 14
1.2.3 Modified Milk Powder 15
1.2.4 Infant Formula Milk Powder 15
1.3 Production Distribution of Infant Formula Milk Powder 16
1.4 Management Policies of Production and Sales of Infant Formula Milk Powder in China 16
1.4.1 Regulations on Supervision and Administration of Dairy Products Quality and Safety 16
1.4.2 Rules for the Examination of Licensing Criteria for Enterprises Producing Infant Formula Milk Powder (2010 version) and Rules for the Examination of Licensing Criteria for Enterprises Producing Milk Products (2010 version) 17
1.4.3 Policy on Regulations on Supervision and Administration of Dairy Products Quality and Safety Issued by State Administration for Industry & Commerce 18
1.4.4 Administrative Methods on Breast Milk Substitutes Issued by Legal Office of State Council and Ministry of Public Health 18
1.4.5 Infants’ Formula Milk Production License System 19
1.4.6 Impact of New National Safety Standards on Chinese Infant Formula Powder Market and the Tendency 19
1.5 Prediction on Production Capacity of China’s Dairy Processing Industry in the Coming 5 Years 32

2 Analysis of Import of China’s Infant Formula Milk Powder 34

2. 1 Overview of Dairy-based Ingredients Import 34
2.1.2 SMP 34
2.1.3 WMP 35
2.1.4 Whey Powder and Demineralized Whey Powder 36
2.1.5 Lactalbumin and Whey Protein Concentrate (WPC) 38
2.1.6 Lactose 39
2.1.7 Milk Fats 40
2.2 Original Infant Formula Milk Powder for Retail 42
2.2.1 Import Volume and Price of Infant Formula Milk Powder 42
2.2.2 Origins of Infant Formula Milk Powder 42
2.2.3 Import Volume of Other Infant Forumla Food 47

3. Analysis of Infant Formula Milk Powder Market in China 48

3.1 Introduction to Infant Formula Milk Powder Market in China 48
3.1.1 Analysis of Market Consumption Characteristics of Infant Formula Milk Powder 48
3.1.2 Production and Layout of Infant/young Child’s Milk Powder 49
3.1.3 Market Capacity and Distribution of Infant Formula Milk Powder 51
3.1.4 Growth Rate of Infant Formula Milk Powder Market 54
3.2  Marketing Analysis of China’s Infant Formula Milk Powder 54
3.2.1 Marketing Channel of Infant Formula Milk Powder 54
3.2.2 Promotion Model of Infant Formula Milk Powder 55
3.2.3 Comparative Analysis of Different Marketing Model Procedures 55
3.3  Retail Price Analysis of China’s Infant Formula Milk Powder 56
3.3.1 Market Price Summarization of China’s Infant Milk Power 56
3.3.2 Infant Milk Power Price Comparative Analysis of Domestic and International Brands 57
3.4  Analysis of Different Infant Formula Milk Powder Markets in China 58
3.4.1 Phase I Infant Formula Milk Powder (for 0-6-month-old infants) 58
3.4.2 Phase II Infant Formula Milk Powder (For 7-12 months) 61
3.4.3 Phase III Infant Formula Milk Powder (for 1-3 years-old children) 63
3.4.4 Infant Formula Rice Cereal 65
3.4.5 Analysis of Selling Points of China’s Infant Formula Milk Powder 69
3.4.6 Analysis of Packaging of China’s Infant Formula Milk Powder Products 71
3.5 Consumption Demand Potential Analysis of Infant Formula Milk Powder Market in China 74
3.5.1 Analysis of Consumption Demand Status of Infant Formula Milk Powder 74
3.5.2 Analysis of Infant Formula Milk Powder Consumption Demand Trend in Future 3-5 Years 74
3.6 Formula Milk Powder Market for Pregnant Women and Breast Feeding Women 75
3.6.1 Market Characteristics 75
3.6.2 Market Size 75
3.7 Formula Milk Powder and Formula Food Market for 1-7-Year-Old Children 76
3.7.1 Market Size of 4-6-Year-Old Children Formula Milk Powder 76

4.  Analysis on Main Players (TOP10) of Infant Formula Milk Powder of China 77

4.1  Chinese Infant Formula Milk Powder Producing Enterprises and Regional Distribution 77
4.2 Market Shares of Infant Formula Milk Powder Brands and the Change Features 78
4.3  Analysis on Top 10 Players 80
4.3.1 Inner Mongolia Yili Industrial Group Co., Ltd 80
4.3.2 Zhejiang Beingmate Scientific-Industrial-Trade Co., Ltd 85
4.3.3 Dumex Baby Food Co. Ltd 90
4.3.4 Mead Johnson Nutrition (China) Co. Ltd 93
4.3.5 Wyeth Nutritional (China) Co., Ltd 95
4.3.6 Biostime Inc. (Guangzhou) 96
4.3.7 Synutra Nutritional Co., Ltd 99
4.3.8 Abbott (China) Co., Ltd 105
4.3.9 Ausnutria Dairy (China) Co., Ltd 107
4.3.10 Nestle (China) Co., Ltd 110

5. Development Trend of Chinese Infant Formula Milk Powder 114

5. 1 Technical Level of Products 114
5. 2 Pricing 114
5. 3 Market Brand Concentration 114
5. 4 Market Structure 114
5. 5 Enterprise Competition 115
5. 6 Marketing mode 115

6. Analysis on Threats & Opportunities of Chinese Infant Formula Milk Powder Industry 116

6. 1 Analysis on Substitution of Chinese Breast-milk to Infant Formula Milk Powder    116
6.1.1 Breast-milk Value Analysis 116
6.1.2 Analysis on Reasons for More and More Choices for Infant Formula Milk Powder 
6.2 Analysis of Opportunities for Chinese Infant Formula Powder Industry 118

Annexes 119
Annex I: Balance Sheet of Supply and Demand of Raw Milk in China,2011-2013 119
Annex II: List of General Situation of Infant Milk Powder Manufacturers with annual production of 5000 tons, 2012 119
Annex III: List of Enterprises Regaining Infant Formula Milk Powder Production License, as of March 31, 2011 121
 Annex IV: List of Leading Importers (with import volume of 1000 tons)of Infant Forumla Food（HS1901.1000） for Retail of China, 2012 128

Contents of Figures & Tables

Figure 1.1 Structure of Dairy Products in China, by output，2011 
Figure 1.2 Structure of Dairy Products in China, by Output，2011
Figure.1.3 Output Trend of China’s Milk Powder, by Month, 2008-2012 
Figure.1.4 Output Trend of China’s Whole Milk Powder, 1999-2012
Figure.1.5 Output Trend of China’s Skimmed Milk Powder, 1999-2012 
Figure 1.6 China Infant Formula Milk Powder Output, 1999-2012
Figure 1.7 China Production Layout of Infant Formula Milk Powder, 2011
Figure 2.1 China SMP Import Volume & Price, by Month, 2000-2012
Figure 2.2 China Import Origins of SMP, Jan-Aug 2012
Figure 2.3 China WMP Import Volume & Price, by Month, 2003-2012
Figure 2.4 China Import Origins of WMP, Jan-Aug 2012
Figure 2.5 China Whey Products Import Volume & Price, by Month, 2004-2012
Figure 2.6 China’s Import Structure of Whey and Modified Whey Products, 2011
Figure 2.7 China Lactalbumin & WPC Import Volume & Price, 2002-2012
Figure 2.8 China Products Structure of Lactalbumin & WPC, 2011
Figure 2.9 China Import Origins of Lactalbumin & WPC, Jan-Aug 2012
Figure 2.10 China Lactose Import Volume & Price, 2000-2012
Figure 2.21 China Import Origins of Lactose, Jan-Aug 2012
Figure 2.12 China Milk Fats Import Volume & Price, by Month, 2004-2012
Figure 2.13 China Import Origins of Milk Fats, Jan-Aug 2012
Figure 2.14 China Imports of Infant Formula Milk Powder, by Month, 2000-2012
Figure 2.15 Origins of Infant Formula Milk Powder, by Volume, Jan-Aug 2012
Figure 3.1 China Infant Formula Milk Powder Output, 1999-2012
Figure 3.2 China Production Layout of Infant Formula Milk Powder, 2012
Figure 3.3 Regional Distribution of Urban Infant Population and Infant Milk Powder Market Capacity (By Consumption Volume) in China’s Different Provinces and Regions, 2012
Figure 3.4 Flow of Infant Formula Milk Powder Promotion Model 
Figure 3.5 Comparison of Infant Milk Power Price of Domestic and International Brands, 2005-2012
Figure 3.7 Factors influencing the consumers’ purchase of infant formula milk powder 
Figure 3.8 Judge Standards of Consumers on Quality of Infant Formula Milk Powder after "the Melamine Scandal" 
Figure 3.9 Demand Changes on Infant Formula Milk Powder Before and After the Melamine Scandal 
Figure 4.1 Market Share of Famous Brands of Infant/young Child’s Formula Milk Powder
Figure 4.2 Market Share of Famous Brands of Infant/young Child’s Formula Milk Powder, by Sales Value,  Jan. 2009 – Dec. 2011 
Table 4.5 Market Share Change of Beingmate Infant Milk Powder, by Sales Value, 2008-2011
Table 4.6 Market Share Change of Synutra Infant Milk Powder, by Sales Value, 2008-2011

Table 1.1 Balance Sheet of Supply and Demand of WMP in China, 2010-2013 
Table 1.2 Balance Sheet of Supply and Demand of SMP in China, 2010-2013
Table 1.3 Sensory Requirements 
Table 1.4 Indexes for Protein, Fat and Carbohydrate 
Table 1.5 Vitamin Index 
Table 1.6 Mineral Index 
Table 1.7 Optional Components Index 
Table 1.8 Other Indexes 
Table 1.9 Contaminant Limit (calculated based on powdery products) 
Table 1.10 Mycotoxin Limit (based on powdery products) 
Table 1.11 Microbial Limit 
Table 1.12 Urease Activity Index 
Table 1.13 Sensory Requirements 
Table 1.14 Protein, Fat and Carbohydrate Indexes
Table 1.15 Vitamin Index 
Table 1.16 Mineral Index 
Table 1.17 Optional Components 
Table 1.18 Other Indexes 
Table 1.19 Contaminant limit (calculated based on powdery products)
Table 1.20 Mycotoxin Limit (based on powdery products) 
Table 1.21 Microbial Limit 
Table 1.22 Urease Activity Index 
Table 1.23 Sensory Requirements 
Table 1.24 Basic Nutrition Index 
Table 1.25 Optional Nutrition Constituent Indexes 
Table 1.26 Limit for Carbohydrate Addition 
Table 1.27 Other Indexes 
Table 1.28 Contaminant Limit 
Table 1.29 Mycotoxin Limit 
Table 1.30 Microbial Limit 
Table 1.31 Urease Activity Index 
Table 1.32 Output of China's Major Dairy Products and Their Capacity Utilization, 2011
Table 2.1 China’s Milk-based Ingredients Import, by Volume, 2009-2012
Table 2.2 China Import Origins of Whey Products, Jan-Aug 2012
Table 2.3 China’s Import Origins of Infant Formula Milk Powder, 2010-2012
Table 3.1 Urban Market Capacity of Infant Milk Powder in China’s Different Provinces and Regions, 2011
Table 3.2 Comparison of Infant Formula Milk Powder Marketing Channel Composition of Some Famous Brand Enterprises, 2010-2012
Table 3.3 Retail Terminal Market (online) Price Comparison of Domestic and Intl’ Brands of Infant Formula Milk Powder Phase I, First half of 2012
Table 3.4 Retail Terminal Market (online) Price Comparison of Domestic and Intl’ Brands of Infant Formula Milk Powder Phase II, First half of 2012
Table 3.5 Retail Terminal Market (online) Price Comparison of Domestic and Intl’ Brands of Infant Formula Milk Powder Phase III, First half of 2012
Table 3.6 Retail Terminal Market Price online Comparison of Well-known Domestic and Intl’ Brands of Infant Formula Rice Cereal Phase I, II and III, First half of 2012
Table 3.7 Infant Formula Milk Powder Consumption Level Per Capita of China’s Urban and Rural Babies, 2003-2011
Table 4.1 Infant Formula Milk Powder Enterprises in the “Blacklist” of the Melamine Scandal Table 4.2 Regional Distribution of Enterprises Regaining Infant Formula Milk Powder Production License, as of 2012
Table 4.3 Registration Reference on Yili Group 
Table 4.4 Top 10 Leading Shareholders & Stock Distribution of Yili Group, 2011
Table 4.5 Consolidated statement of profits of Yili Group, 2010-first 3Qs of 2012
Table 4.6 Purchase scale and purchase price of raw material milk of Yili Group, 2007-2011
Table 4.7 Main Product List of Yili Group
Table 4.8 Output List of Main Products of Yili Group, 2007-2011
Table 4.9 Registration Reference on Beingmate 
Table 4.10 Shareholders and share ratio list of Zhejiang Beingmate Technology Industry & Trade Co., Ltd 
Table 4.11 Table for Beingmate’s Total Shareholders and Positions of Top Ten Shareholders without Trading Limited Conditions by the 3rd Quarter of 2012
Table 4.12 Financial Situation of Beingmate, 2008-2012
Table 4.13 Beingmate Infant/young Child Formula Milk Powder Related Production 
Table 4.14 Registration materials of Dumex Baby Food Co. Ltd 
Table 4.15 Product Output List of Dumex Baby Food Co. Ltd, 2007-2011
Table 4.16 Dumex’s Technological Dissemination and Product Promotion in China 
Table 4.17 Product Output List of Mead Johnson Nutrition (China) Company , 2008-2011
Table 4.18 Registration materials of Qingdao Shengyuan Dairy Co., Ltd 
Table4.19 Stockholders & Share Distribution of Synutra Dairy 
Table 4.20 Financial Situation of Synutra International Inc., 2009-2012
Table 4.22 Raw Milk Procurement Scale and Prices of Synutra Dairy, 2007-2011
Table 4.23 Main Product List of Synutra Dairy 
Table 4.24 Main product output of Synutra Dairy, 2005-2011
Table 4.25 Related Infant Formula Milk Powder Production Equipment List of Syrutra Dairy 
Table 4-26 Retail Price of Infant Formula Milk Powder Brands of Abbott in Year 2012
Tabel 4.27 Main Shareholders of Ausnutria Dairy (China), by the end of 2011
Table 4.28 Financial Situation of Ausnutria Dairy, 2006-2012
Table 4.29 Main Product List of Ausnutria Dairy 
Table 4.30 Main Product Output List of Ausnutria Dairy, 2007-2011
Table 6.1 Feeding of infants in different months 
Table 6.2 Percentage of Interviewees Heard of the International Code of Marketing of Breast Milk Substitutes( short for “Code”) or the Administrative Methods on Sales of Breast Milk Substitutes (short for “Methods”) 
Table 6.3  Percentage of Interviewees Understanding of the International Code of Marketing of Breast Milk Substitutes( short for “Code”) or the Administrative Methods on Sales of Breast Milk Substitutes (short for “Methods”) 
Table 6.4 Use of Breast-milk Substitutes of infants in parturition and in hospital