APAC Baby Food Market in Decline

The baby food market in Asia Pacific is shrinking, notably in milk formula sales. Milk formula has seen a decline in its market dominance, expected to drop from 82% of total baby food sales in 2024 to 79% by 2029.

This change centers around China, where the demand for milk formulas is decreasing sharply, expected to lower by USD 4.8 billion from 2024 to 2029. Such a decline will shrink China’s share of the baby food market in Asia from 65% to 56%.

In response, brands are expanding into rapidly growing markets like India, Indonesia, and the Philippines. India's market is projected to grow at a 6% compound annual growth rate (CAGR), while Indonesia and the Philippines each stand at a 3% CAGR during the same period. Companies are also focusing on creating innovative products with science-backed dietary benefits. For instance, new releases like Nan Infinipro in Hong Kong include human milk oligosaccharides (HMO) and probiotics to cater to broad nutritional needs.

However, companies like Feihe, mainly operating within China, are feeling the pinch due to lower birth rates and reduced milk formula consumption. They are now seeking to appeal to different consumer groups to stimulate growth.

The entire baby food sector anticipates a 2% decline in retail value sales from 2024 to 2029 due to demographic shifts like reduced fertility rates and mothers having children at older ages.

Strategic adaptation is key. The industry shifts toward addressing families' broader needs by offering products suitable for older children and adults. While some small players are stepping back or reallocating focus, premium and specialized formulations are gaining traction, especially in China. Here, health-conscious parents are increasingly opting for high-priced formulas that offer added health advantages.