Nestle launches new high-end milk powder products for adults in China

The increasing demand for family nutrition and slower growth in the infant and baby milk formula market are part of the reasons behind the push by food and nutrition manufacturers to burnish the appeal of milk powder products for adult consumers in China.

Global food and nutrition giant Nestle recently rolled out high-end milk powder products for Chinese family consumers. The milk powder product, named Shu Chun, part of Nestle's Joyful Vitality series which targets family nutrition, is designed to improve digestion and the absorption of proteins for middle-and-high income families.

The milk powder products are made from milk collected directly from cows at dairies in the city of Shuangcheng in Heilongjiang province in Northeast China, Nestle said.

The marketing of milk powder for families has been on the rise despite the strong demand for liquid milk. Henry He, marketing director of the Dairy Business Unit of Nestle China, said the online market for family milk powder products has grown quickly.

Nielsen China statistics showed that online milk powder sales have reached 1.8 billion yuan ($256.2 million), while the level offline stood at 1.5 billion yuan in the past 12 months.

Nestle's dairy unit has developed three kinds of milk power for families. They include full cream, skim milk and Nido, which is an organic product, accounting for 25 to 30 percent of its overall dairy products.

The milk powder for adults is for middle-aged and senior consumers as well as maternity nutrition products.

Ausnutria in October added an adult milk powder business. In August, Yashili International launched its own line of milk powder for family consumers.

Compared with the milk formula sector for infants and babies, the adult category is still in its early stage in terms of market scale and profitability.

Data from Euromonitor International showed that the milk formula market which includes standard, follow-on, growing-up and special milk formula has reached 175.5 billion yuan in 2019 in the country and the market's size is forecast to reach 216.3 billion yuan by 2024.

Song Liang, an independent dairy analyst, said the domestic milk powder market for adults ranges in value from 6 to 8 billion yuan. Its market size has remained unchanged in recent years and gross profits are low, mainly as a result of a lack of consumption awareness among consumers.

"Our data shows that demand for adult milk powder has been growing consistently for the past three years but from a small base," said Jason Yu, general manager of Kantar Worldpanel. "Year-on-year growth was 12 percent up to Sept 2019, higher than the dairy sector average."

A lot of growth is expected in this category, particularly among elder families and consumers with specific nutrition demands such as pregnant women.

The senior population in China makes up about 17.9 percent of the total population in total and the ratio is expected to rise and reach a quarter of the population in six years.