Pediatric Nutrition Market - Insights
Pediatric nutrition refers to the nutritional products given to infants or children as a sole source of nutrition or supplement. These products support physical and mental growth of children, in turn supporting balanced growth in their formative years, from infancy to adolescence. The usage of these products is critical in cases of premature birth or babies suffering from severe allergies such as lactose intolerance. In premature birth, baby can’t be directly breastfed and hence, these products are the sole source of nutrition till they get switched to breastfeeding. According to Centers for Disease Control and Prevention (CDC), 2016, around 10% (1 in every 10) of births recorded were premature in the U.S. Moreover, globally, every year around 15 million births are premature, according to the World Health Organization (WHO). Products are also being developed for infants suffering from certain inborn diseases such as maple syrup urine disease or phenylketonuria.
Increasing demand for nutritional products in Asia Pacific is expected to boost growth of the pediatric nutrition market
Asia Pacific is home to two of the most populous countries in the world, India and China. Number of births in these countries is also among the highest, every year. Moreover, in October 2015, China abolished its one-child policy, which in turn is expected to increase the birth rate in China. According to World Bank, in India, crude birth rate (birth per 1,000 people) was recorded to be 19 in 2015, which was much higher as compared to developed economies such as the U.S., U.K., Germany, France, and Italy which recorded crude birth rate of 12, 12, 9, 12, and 8, respectively. Significant year-on-year increase in the crude birth rate in India, is expected to increase in the number of total births in the country in the near future.
Furthermore, Companies such as Mead Johnson Nutrition have operated with very high gross margins accounting for 64.2%, 64.3%, and 61.4% in 2016, 2015, and 2014, respectively. This in turn, indicates lucrative opportunity for market players in this market, which in turn is increasing the entry of large players. Due to the high gross margins, new manufacturers are competing with leading players by selling their products at a reasonable but profitable price.
The global pediatric nutrition market was valued at US$ 35,211.6 million in 2016 and is expected to witness a CAGR of 6.4% over the forecast period (2017 – 2025).
Figure 1. Global Pediatric nutrition Market, Company Share Analysis (%), 2016 and 2025
Innovative products for babies with special needs is boosting market growth
Lactose intolerance, allergy to cow’s protein milk, maple syrup urine disease, phenylketonuria, and insulin resistance are some of the most common health complications faced by infants and children. These children require special nutrition, which can be provided by nutritional products. Mead Johnson Nutrition (acquired by Reckitt Benckiser Group Plc) developed a separate category of products specifically designed for children suffering from such diseases. These products include Mead Johnson BCAD, for children suffering from maple syrup urine disease and Mead Johnson PhenylFree, for children suffering from phenylketonuria. Other players such as Nestle S.A. and Abbott Laboratories also sell product for children with special needs. Increasing number of products to serve this special population coupled with increasing awareness about such diseases is expected to support growth of the global pediatric nutrition market. Furthermore, companies are focusing on development of products that may serve as nutrition enhancer or taste modifier, for the general population. Such products include ChocoMilk and Cal-C-Tose, which when added to milk enhance its nutritional value.
The four leading players holding a dominant position in the market are Reckitt Benckiser Group Plc, Nestlé S.A., Abbott Laboratories, and Groupe Danone, owing to a spree of market consolidation. Manufacturers are focusing on inorganic growth strategies such as mergers and acquisitions to strengthen their foothold in the global market. For instance, in 2012, Nestle S.A. acquired Pfizer Inc.’s infant nutrition business. In June 2017, Reckitt Benckiser Group Plc acquired Mead Johnson Nutrition, a leading player in pediatric nutrition.
Pediatric nutrition is an important source of nutritional supplement for babies during their formative years. These products are available in milk-based, Soy-based, amino acid-based, and organic forms. These nutritional products support brain development and also helps in the management of allergies and metabolic disorder. Highest number of births are recorded in Asia Pacific, and hence, the region holds maximum opportunity for market players. Due to this, companies such as Mead Johnson Nutrition (acquired by Reckitt Benckiser Group plc), Nestle S.A., and Abbott are trying to maximize their market share in Asia Pacific, especially in China. High return on investments in this market is influencing large players to opt for inorganic methods of growth, as well as increasing the entry of new players in the market. For instance, Reckitt Benckiser Group plc acquired Mead Johnson Nutrition Company in June 2017.
Increasing per capita income in emerging economies of Asia Pacific, emergence of new player in the market, and increasing investment from leading players such as Reckitt Benckiser Group Plc, Nestlé S.A., Abbott Laboratories, Groupe Danone, and Royal FrieslandCampina, in high demand countries such as India and China are major drivers for growth of the market. In the age of significantly lower birth rate in developed economies such as Germany, Canada, U.S. and UK, countries like India, with higher birth rate, presents an opportunity for the player in the market. Moreover, continuous effort from non-government organizations such as WHO, Save The Children, UNICEF and other similar minded organizations to end malnutrition has resulted in formulation of policy that recognizes the importance of nutritional products at very early age, and hence, supports this. For instance, National Nutrition Strategy formulation by Government of India in 2017. These favorable policies is expected to support growth in adoption rate for pediatric nutrition products which in turn will result in growth in the market.
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“*” marked represents similar segmentation in other categories in the respective section.
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