Recently, the news of second formula registration of the infant formula milk powder (hereinafter referred to as infant formula) industry and new national standard will soon be landed came in an endless stream. As the epidemic promoted the industry reshuffle, further intensified the market stock competition, the second formula registration and the landing of the new national standard will make the industry further reshuffle, industry competition is more intense.

New standard will be implemented soon, and the industry will be reshuffled again

As the formula registration is valid for 5 years, and in the current existence of about 1400 formulas mostly registered in 2017, these products will need to registered again before 2022. According to the registration process, the second registration of infant formula will be carried out in 2021. The industry generally believes that, compared to the first formula registration, the threshold of the second formula registration will be higher.

At the same time, the new national standard for infant formula has been in the making for many years. The National Health Commission had publicly solicited opinions on new national standard for infant formula in 2018, which added the provisions of some nutrients. In June 2020, the new national standard for infant formula was internally consulted again. The new standard is likely to be released in 2021.

The release of the new standard is also a reshuffle for the industry. The new national standard will set the upper and lower limit values of the nutrients for infant formula, which makes the process more difficult, and for many small and medium-sized enterprises, the technical threshold is higher.

Product homogenization is serious, infant formula brands to upgrade the competition

In the recent two years, especially for the reason of the 2020 epidemic, big brands took advantage of the opportunity to seize the market, the infant formula market competition is extremely fierce. The second formula registration and the landing of the new national standard has undoubtedly accelerated the strategic upgrading of infant formula brands.

From the action of major brands, the battle of formula upgrade has been fought. In 2020, among the domestic brands, Yili re-registered and upgraded 12 formulas, Feihe registered and upgraded 9 formulas, Wyeth, Biostime were also registered or upgraded 9 formulas respectively.

In terms of products, more than 20 brands have launched more than 90 new milk powder products last year with a focus on new family nutrition products.

The second formula registration and the landing of the new national standard will accelerate the product formula upgrade, and therefore many companies will greatly improve their formula level, which also accelerates the homogenization of infant formula.

High-end has become the "standard", to explore the potential of market segments

Nielsen released the 2020 Maternal and Infant Consumer Insight Report, which shows that the high-end market segments such as organic, goat infant formula and infant formula milk powder for special medical purpose have been exploding. Mid- and low-end product lines are in a downward trend, especially the low-end line sales share, while the high price segment sales share increased significantly, up 5%.

In addition to the layout of the high-end market, it has become a new strategy for many dairy companies to focus on segment market.

For example, as consumers become more aware of the concept of A2 protein, grass-fed and other high-end categories, the ranks of segmented infant formula categories are growing.

Take the segment market of goat infant formula as an example, data shows that China’s overall sales of goat infant formula was only 300 million Yuan in 2008, but by 2016, the market size of goat infant formula alone had exceeded 5 billion Yuan.

More details about this trend please click:【行業】二次配方注冊+新國标落地在即 乳企向高端與細分(fēn)市場要增量

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- 2020 Industry Report for Infant Formula Milk Powder (Excerpt),

Lillian Fan

Tel: 010-51301566

email: Lillian.fan@ruibole.com