In 2019, overseas infant formula companies operating in China are facing increased stresses precipitated by a reduced birth rate, a decreased fertility rate in women, regulatory barriers and the continued upward trajectory of China’s domestic enterprise. Faced with these new challenges overseas enterprises are eagerly looking to find ways to offset emerging difficulties and improve their margins.
The standard cookie-cutter advice on offer is to align product development strategy to harness changes in consumer purchasing preference towards premium products and higher growth segments like organic and goats milk formula. Unfortunately, this standard advice has already occasioned a scramble to the top and has meant premium products and high-end niche segments will shortly become not so niche as evidenced by the high number of enterprises which have already launched or are in the process of developing premium products, goats milk, organic or A2 milk powder products. Although growth trends are promising, is launching premium, organic, goat milk or A2 IF enough to deal with the increased market pressures?
Assuming the answer is no, then what strategies are still available to international stakeholders to succeed in China’s IF sector? In this article, I will discuss methods to address current demand in China’s markets, and new strategies to align product development with the rapidly evolving demands of consumers in China’s baby care and infant nutrition sector. I will also touch on key “premium product” trends and will offer my thoughts and insights on the most important topics discussed during the Fourth China Special Food Conference , especially key points made by officials and senior dairy industry experts like Song Liang and Zhu Danpeng. For more general information about the IF market in China, challenges and solutions, you may check out ChemLinked’s recent report China Infant Formula Sector: 2019 Market Movement & Growth Strategy  for more info.