A report of my trip to India

December 14, 2012 by Eric Blanchard

I must say that India will stay as one of my greatest recordings, being at the same time a great personal experience and a performing professional trip.

The Indian market for infant nutrition has an enormous potential for growth, given that:

  • There is a strong latent demand for infant food products;
  • The Indian infant formula market has opened to international trade since September, 2008;
  • Competitive pressure between Indian companies and multinational firms in this market has maintained at a moderate level.

 Notwithstanding, three main issues are facing new potential entrants:

  • Customs duty rates applying to infant milk are very high;
  • There is a strong cultural reluctance both on the part of Indian parents and Indian doctors, towards breast milk substitutes before the age of 6 months;
  • Any form of promotion and advertising upon breast milk substitutes is prohibited in India.

 Key figures

Population

1 148 Million

Demographic growth

1.38 %

Average number of children per woman

2.7

Young children population (0-4 years)

119,5 Millions (10,4 %)

Urban population

321 Millions (28 %)

Middle-class population

57.4 Millions (5 %)

Growth rate of the Indian infant nutrition market in 2010

17 %

Annual growth rate of the Indian infant formula market

+ 7 %

 

 

 

 

 

 

 

 

 

*Source: The World Factbook, 2012

 

India, with more than one billion inhabitants and a birth rate of 2.7 children per woman, is a blessed country for infant nutrition players. The baby food market, in which infant formula accounts for 45%, is rapidly expanding: its turnover increased by 17% in 2010. Within this figure, demand for infant formula is also steadily rising, of +11% a year according to latest estimates.

This can be explained by:

  • Improved living standards, and the emergence of a middle class ;
  • A national concern about strengthening the fragile immune system of infants, by supplementing  their lack of micronutrients;
  • A growing concern about nutritional quality, especially in baby food.

 

Provide the best diet to their babies : a strong maternal concern in India

Despite traditional and cultural habits of breastfeeding, young urban Indian mothers tend to adopt more and more infant formula powders, as well as pre-mixed nutritional supplements with vitamins.

At the beginning of 2000’s, mothers used to administer such products exclusively to their children aged 2 years or more. Now they are extending these habits to even younger babies.

Around 2010, there was a massive introduction of new baby food and baby formulae in the major stores of Indian megacities. This was aimed at responding the needs expressed by a large number of moms, concerned about the poor health of their young children.

Nowadays, urban mothers can find in supermarkets, pharmacies and drugstores, various infant milks and premixed powders with vitamins, under local and foreign brands, considered to be very nutritious and offering a wide range of tastes.

 

Main players of the infant milk market in India

Infant milk is manufactured in India mainly by foreign firms, but also by local small and medium size companies.

main competitors on infant milk market

 

High entrance barriers

However, three main issues are facing new potential entrants:

  • Duty rates applying to infant milk are very high;
  • There is a strong cultural reluctance from Indian parents and Indian doctors, towards breast milk substitutes before the age of 6 months;
  • Any form of promotion and advertising upon breast milk substitutes is prohibited in India.

 

LISA’S ADVICE

With a view to fully take advantage of Indian market opportunities in spite of entrance barriers, various options can be studied:

  • Regarding products, applicant players may focus on follow-up formulae or on specific milks for medical purposes, or on dietary supplements for the child;
  • Regarding the choice of a local counterpart, it is recommended to seek partnership with a well-settled local distributor, having good reputation and strong brand awareness among doctors and consumers;
  • Regarding the terms of partnership, transferring technology to an Indian manufacturer emerges as a particularly profitable and sustainable way of doing business, for both parties and for the hosting country.  

LISA's experts in IndiaLISA's experts in India

Comment by onneile segwai

August 19, 2013 at 10:50 AM

i m having a tender for supply and delivery of 1200000 400g infant formula milk to government of Botswana i m proposing that we be partners in executing this tender

Comment by Jacob Tito

November 28, 2017 at 03:06 PM

Dear Sir/Madam,
We would like to introduce to you our company Swanjo Enterprises Limited. We are given an opportunity by the Government of Uganda to look for Foreign Company which has the Capacity to Bid and Tender for the project below in bulk quantity;

- SKIMMED MILK POWDER & FULL CREAM MILK POWDER

- QUANTITY - 20000 MT in batches

PORT CIF MOMBASA

Please do advise if your Company is ready to participate in the
Government Ministry Tender

Waiting for your response.

Best Regards
Jacob Tito
----------------
SWANJO ENTERPRISES LIMITED
City Light Arcade
Plot 16 Makhan Singh Street
P.O BOX 3986
Mbarara-Uganda
EMAIL: jtito.swanjoentltd@gmail.com | info@swanjoenterprisesltd.com
WEBSITE: www.swanjoenterprisesltd.com
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TEL: +256741670223