[Updated] 910 Infant Formula Recipes Registered as per China’s New GB Standards

In the past months, the registration information of a number of recipes are changed, involving their company name, recipe name, etc. For example, some recipes produced by Xi'an Yinqiao Dairy Technology Co., Ltd. are changed their registered trademark from "Yinqiao" to "Junlebao". Some recipes changed their manufacturer name from "Hunan Eurbest Nutrition Co., Ltd." to "Danone Special Nutrition (Changsha) Co., Ltd".

The following analysis is based on the data from the official query platform. Although the authority issued another notice on November 17, 2023, since the information of involved recipes remains unchanged in the database at present, this update only analyzes the overall registration status up until November 16, 2023.

• By Country of Manufacturer: China (84%) vs Overseas (16%)

Among the 910 recipes, 768 are produced by local manufacturers in China, including the manufacturers established by overseas players. The rest 142 recipes are from New Zealand, the Netherlands, Germany, Denmark, South Korea, Ireland, France, Switzerland and Singapore. Taking Nestlé as an example, 15 recipes of it are produced in China, while 17 recipes whose registration were applied by manufacturers in other countries.

Graph 1: The number of recipes registered as per new GB standards, by country of manufacturer

• By Group: Top 5 (28.8%) vs Others (71.2%)

Divided by group company, 262 recipes are owned by top 5 groups that own the most recipes.

Table 1: Top 3 Chinese and overseas group companies with the most registered recipes under the new standards

• By Processing Technology: Dry-wet cpmposite Process (58.1%) vs Dry Process (31.6%) vs Wet Process (10.2%)

The majority of recipes (529) are produced using a dry-wet composite process, while dry processing technology is also commonly employed. Wet processing technology is utilized for only 10.2% of the recipes (93).

• By Milk Species: Cow (72%) vs Goat/Sheep (28%)

Among the 910 recipes, 655 are from cow milk while the rest 255 are from goat or sheep milk. In terms of the number of registered goat/sheep recipes, Baiyue Dairy, Yeeper Dairy, Feihe, Wissun and Herds Dairy are the top fivecompanies. More market data of goat infant formula products can be read at ChemLinked report: Exploring China’s Goat Milk Powder Market in the Increasingly Segmented Dairy Industry.

Graph 2: Product layout of top group companies with the most recipes under the new standards, by milk species

The whole list of recipes registered as per the new GB standards can be found at CL Food List: Chinese Mainland: Infant Formula Recipe Registered as per the New GB Standards.

Up until Sept 7, 2023, 892 infant formula recipes from 125 manufacturers have been registered with China’s competent authority as per the new standards. Find the details in ChemLinked’s Food-list: Chinese Mainland: Infant Formula Recipe Registered as per the New GB Standards.

The following analysis is based on the data from the official query platform. (Notes: the information related to some recipes remains unchanged at present.)

• By Country of Manufacturer: China (85%) vs Overseas (15%)

Among the 892 recipes, 756 are produced by local manufacturers in China, including the manufacturers established by overseas players. The rest 136 recipes are from New Zealand, the Netherlands, Germany, Denmark, South Korea, Ireland, France, Switzerland and Singapore. Taking Nestlé as an example, 15 recipes of it are produced in China, while 17 recipes whose registration were applied by manufacturers in other countries.

Graph 1: The number of recipes registered as per new GB standards, by country of manufacturer

• By Group: Top 5 (28%) vs Others (72%)

Divided by group company, 249 recipes are owned by top 5 groups that own the most recipes.

Table 1: Top 3 Chinese and overseas group companies with the most registered recipes under the new standards

• By Processing Technology: Dry-wet cpmposite Process (59%) vs Dry Process (31%) vs Wet Process (10%)

The majority of recipes (529) are produced using a dry-wet composite process, while dry processing technology is also commonly employed. Wet processing technology is utilized for only 10% of the recipes (90).

• By Milk Species: Cow (72%) vs Goat/Sheep (28%)

Among the 892 recipes, 640 are from cow milk while the rest 252 are from goat or sheep milk. In terms of the number of registered goat/sheep recipes, Baiyue Dairy, Yeeper Dairy and Feihe are the top three companies. More market data of goat infant formula products can be read at ChemLinked report: Exploring China’s Goat Milk Powder Market in the Increasingly Segmented Dairy Industry.

Graph 2: Product layout of top group companies with the most recipes under the new standards, by milk species

Up until July 19, 2023, 786 infant formula recipes from 114 manufacturers have been registered with China’s competent authority as per the new standards. Find the details in ChemLinked’s Food-list: Chinese Mainland: Infant Formula Recipe Registered as per the New GB Standards.

The following analysis is based on the data from the official query platform.

• By Country of Manufacturer: China (85.8%) vs Overseas (14.2%)

Among the 786 recipes, 674 are produced by local manufacturers in China, including the manufacturers established by overseas players. The rest 112 recipes are from the Netherlands, New Zealand, Germany, Ireland, South Korea, France, Denmark, Switzerland and Singapore. Taking Nestlé as an example, 15 recipes of it are produced in China, while 17 recipes whose registration were applied by manufacturers in other countries.

Graph 1: The number of recipes registered as per new GB standards, by country of manufacturer

• By Group: China (88%) vs Overseas (12%)

Divided by group company, 691 recipes are owned by Chinese companies and the rest 95 are owned by overseas companies like Nestlé, Danone, FrieslandCampina, Hipp, a2, etc. [Notes: Recipes under Mead Johnson are regarded as recipes owned by Chinese company, since Primavera Capital Group acquired the Greater China business of Mead Johnson.]

Table 1: Top 5 Chinese and overseas group companies with the most registered recipes under the new standards

• By Milk Species: Cow (72.9%) vs Goat/Sheep (27.1%)

Among the 786 recipes, 573 are from cow milk while the rest 213 are from goat or sheep milk. In terms of the number of registered goat/sheep recipes, Baiyue Dairy, Yeeper Dairy and Feihe are the top three companies. More market data of goat infant formula products can be read at ChemLinked report: Exploring China’s Goat Milk Powder Market in the Increasingly Segmented Dairy Industry.

Graph 2: Product layout of top group companies with the most recipes under the new standards, by milk species

Up until March 6, 2023, there are 454 effective infant formula recipes from 72 manufacturers that are registered as per the new GB standards, as disclosed by the official query platform.

• By country

Among the 454 recipes, 86.6% are from local manufacturers in China, including the manufacturers established by overseas players. The rest are from the Netherlands, Ireland, Germany, New Zealand, Denmark, Switzerland and Singapore. Taking Nestlé as an example, 15 recipes of it are produced in China, while 17 recipes whose registration were applied by manufacturers in other countries.

• By Group

Top five groups that own the most registered recipes are Firmus/Feihe, Junlebao, Nestlé, Yili and Beingmate. It is worth mentioning that Firmus/Feihe has an extraordinary share of 63 recipes registered based on the new national standard. Mead Johnson and Danone own 16 and 15 recipes, respectively.

• By Milk Species

Divided by milk species, 367 recipes are from cow milk, and 72 are from goat or sheep milk. Regarding the goat or sheep recipes, 15 are from Firmus/Feihe and 9 from Yatai Dairy.

Before the release of the new GB standards, China’s infant formula industry once has around 1,300 valid recipes on the market. Since the new GB standards came into effect yesterday, lots of recipes registered as per the old standards became invalid. Up until Feb 22, 2023, there are only 290 effective recipes which are registered according to the new GB standards (hereinafter “new effective recipes”) as disclosed by the official query platform². Most of them are from Firmus (16.2%), Junlebao (14.4%), Nestlé (10.3%), Beingmate (6.2%) and Yili (6.2%). Please note: Due to the update lag of the official query platform, the actual number of new effective recipes shall be more than 290 recipes. According to Mead Johnson³, they have already got 16 effective recipes, but the query platform shows it owns 7 effective recipes. (Recommended reading: A Glimpse into China’s Latest Infant Formula Recipe Registration Data by Dec 12, 2022)

How Greatly Will China’s Infant Formula Market Be Affected?

From the number 1,300 to 290, does it mean China’s infant formula shrank an estimated of 78%? Of course not. First of all, the registration process is still going on and speeding up. From Jan 1, 2023 to Feb 12, 2023, the number of new effective recipes increased from 227 to over 290. Second, for manufacturers who haven’t got new effective recipe approvals or want to quit the market, they can still sell recipes registered as per the old standards before the expiration date. Therefore, the market won’t shank suddenly.

So how greatly will the new GB standards affect China’s infant formula market? The industry believes⁴ that one-thirds of the brands will quit the market after the implementation of new GB standards and the corresponding market share will be reallocated by competitors. A report by Haitong International Securities⁵ had assumed that the market share of recipes that failed to pass the registration under the new standards would be around 10% to 15% with corresponding sales value of around 16 billion to 24 billion yuan (estimated factory caliber of about 10.6 to 16 billion yuan). Independent dairy expert Song Liang believes that SMEs will be the major body that may quit the market, since many giant companies have already got most of their recipes passed under the new GB standards. However, due to the competitive market in the past years, the sales value of many small and medium brands has already dropped a lot, accelerated by the pandemic. Therefore, he predicts that the scale of these SMEs won’t be that high and will be around 1-2 billion yuan calculated on the factory price.

Suggestions for China’s Infant Formula Market

Besides the impact of new GB standards, the most influential factor for infant formula stakeholders to consider is still China’s birth rate. According to the National Bureau of Statistics⁶, China has 9.56 million newborns in 2022 (birth rate: 6.77‰) which is only a half of that in 2016. Although the government is keeping raising measures to boost birth rate (e.g. three-child policy, subsidies, etc.)⁷, the effect is still not clear in the long run. But we assume that it shall be effective in a short term. Taking the policy in 2015 as an example, after China announced the “Two-child Policy”, the fertility rate was far from the expectation in a long run (the newborn population dropped to 14.6 million in 2019), but the newborn population peaked at 18.83 million in 2016 and reached 17.65 million in 2017. The report by Haitong International Securities believes that, affected by the released policies, the birth rate of 2023, 2024 and 2025 will be 7.0‰, 7.8‰ and 7.8‰, respectively, with corresponding infant formula market size of 157.8/171.9/191.2 billion yuan.

From a long run, ChemLinked believes that the market will be the battlefield of giant companies, for whom the market is still huge and optimistic. On February 17, 2023, the responsible person of Arla China⁸ expressed their attitudes towards China’s infant formula market. Although the birth rate is not optimistic, not many brands are strong and competitive on the market. The responsible person looks highly upon the performance of its infant formula brand Baby&Me in China and aims to make the sales scale 10 times bigger in the next 7 to 10 years. Recently, Arla reached strategic cooperation with Sam’s Club and will enter Sam's Club at the beginning of March 2023.

For SMEs, although they may confront with more difficulties, there are still some strategies to penetrate into Chinese market. For newcomers, they shall be more prudent and prepare well in market research, not only investigating the overall market, but also issues like supply chain, sales channel, marketing strategy, etc. For companies who want to change sector, foods for special medical purpose are still with a great potential due to its high technician barrier (which ChemLinked can help with), less competitor and large consumption demands. Liquid infant formula and milk powder for certain groups, such as children, students, the elderly, etc., can also be new opportunities for dairy enterprises. (Read more at Strategies to Mitigate Impact of China’s Infant Formula Market Slump: Leveraging the Concept of Generational Care⁹; China Slow to Accept Liquid Infant Formula¹⁰)