Lactoferrin dominates Chinese infant nutrition market as new trends poised to grow

16 Dec 2021 --- As lactoferrin holds a dominant position in the Chinese infant nutrition market with consumers focused on premiumization, industry is observing potential in organic and goat-milk-based powders for the future, according to Armor Proteines. 

“Because lactoferrin has become a key component in the Chinese market, its marketability will continue for several years,” Armor Proteines notes.

“As for the new trends in organic products and goat’s milk-based infant formulas, observations are still slight if we look at the volume of sales, but they represent significant growth potential nonetheless.”

According to Innova Market Insights, the Asia Pacific (APAC)’s infant nutrition industry recorded a retail value worth US$60.3 billion in 2020. China is observed to dominate the APAC region, with its retail value in infant nutrition reaching 74%.Consumers in China have sparked a premiumization trend.  

Rise of lactoferrin
The origins of lactoferrin’s popularity in China stem from almost 15 years ago when scores of newborns were poisoned after drinking marketed infant formula that was tainted with melamine. As a result, many babies died, causing Chinese consumers to be extremely wary of infant formula found on the market, the company states.

This sparked a premiumization trend, with campaigns highlighting DHA and lactoferrin standards. “Lactoferrin thus became a market standard for the sector, and 50% of its global production is used in China,” it adds.

The nutrient has been spotlighted globally for its links with immunity, leading FrieslandCampina Ingredients to ramp up lactoferrin production as demand for the protein jumped. 

Lactoferrin’s importance in the market was highlighted last month when TurtleTree landed US$30 million in an investment round, aiming to work toward cell-based human lactoferrin.

New players on the market
There are two new trends emerging in China right now, Armor Proteines suggests. Though they are still in their infancy, he outlines organic products are beginning to take hold of the market. 

Currently, organic items represent 5% of the market; however their consumption and reputation are growing, the company notes. 

Additionally, goat milk-based infant formula has also been flagged for its potential. 

“Well-known for its non-allergic, easy-to-digest properties, goat’s milk is currently consumed mainly in rural areas, but urbanites are increasingly opting for this alternative,” the company says.

Earlier this year, Switzerland-based infant formula player Hochdorf unveiled its gut-friendly goat’s milk infant formula touted as easy to digest and a viable alternative to traditional formula.China has tough regulations for the infant nutrition industry.

Tough regulations
The market in China has strict regulations that companies must adhere to, Armor Proteines notes.

For starters, no more than three brands can be produced per production plant. Each brand is limited to producing no more than three products. 

“This means that a production plant dedicated to powdered infant formulas is limited to nine different products,” the company explains. 

The reasoning behind these regulations are two-fold. The first is protectionism, aiming to limit the number of offshore producers found in China while the second is quality control, according to Armor Proteines.

“A production plant restricted to nine different products should have better quality control, and therefore less food safety risk.”

Furthermore, companies also face a mandatory product differentiation rule on the nine products. The rule specifies that “although their main ingredient is identical, their specific ingredients such as calcium, DHA or lactoferrin must be different. Thus, two products from the same plant will not contain the same properties.”

However, China’s regulation around human milk oligosaccharides may be loosening, after its Ministry of Agriculture and Rural Affairs confirmed the safety of six manufacturing strains to produce human milk.

Edited by Andria Kades