Nestle bullish on China's infant nutrition sector

Global food and beverage giant Nestle will continue to invest in its infant nutrition business in China and is bullish about the market's long-term prospects, driven by the still large number of newborns in the country and the imminent approval of its new Human Milk Oligosaccharide (HMO) product, according to its executives.

"China remains the world's largest market for the infant and maternity sector due to the sheer number of newborns," said Adrian Ho, deputy head of Nestle Zone Greater China and corporate vice-president.

Ho said that this year, the Year of the Dragon — a zodiac sign believed to encourage Chinese families to have more children — could further boost sales of Nestle's infant nutrition products.

In Nestle's first-half financial results released in July, the company reported low single-digit growth in global infant nutrition sales, fueled by continued momentum for its NAN formula, Lactogen and HMO products.

While China's infant nutrition sector saw negative growth, Nestle's performance still outpaced the overall category decline. Globally, Nestle achieved organic growth of 2.1 percent.

The Chinese market's gains were driven by growth in soluble coffee, pet foods, confectioneries and infant nutrition.

Nestle acquired Wyeth Nutrition in 2012 for $11.85 billion from Pfizer Nutrition, further strengthening its global position in the infant nutrition sector.

As a science-led, high-value category, infant nutrition has been central to Nestle's operations since its founding in 1866.

Ho emphasized that its new Illuma infant formula is about to launch with newly approved HMOs which will help communicate the brand's scientific expertise to Chinese consumers.

Isabelle Bureau-Franz, head of Research and Development for Nestle's Nutrition Business, highlighted the importance of HMO technology, which is inspired by human breast milk.

"Our Global HMO Research aims to explore cutting-edge breast milk research, unlock the mysteries of the first 1,000 days of life, and support the healthy development of Chinese babies with advanced HMO formulas," she said.

Since the approval of two new HMOs by China's National Health Commission in October 2023, HMO products of Illuma, a high-end brand of Wyeth, have gained significant attention in China.

The company plans to strengthen its market position with a new generation of HMO-enriched infant formula to be launched soon.

Nestle's advancements in HMO technology come amid growing competition in China, where dairy companies such as Yili are also focusing on HMO products.

Jocelyn Lacida, global marketing manager for Wyeth Premium, said that formula innovation is a long-term process.

"For example, it took us seven years and three iterations to develop Illuma LUXA, evolving from two types of HMOs to six in our latest formula," Lacida said.

She added that Illuma continues to lead the market with innovative products, including the first growing-up infant formula and HMO-enriched liquid formula launched by a foreign brand in China.

"Each formula undergoes years of refinement to ensure both safety and effectiveness, while optimizing the balance of key nutrients like HMOs to deliver clinically proven health benefits," Lacida said.

Illuma's research in China spans 10 provinces, involving over 740 researchers and nearly 1,000 breast milk samples, providing a foundation for continued product innovation tailored to the local market.

"Winning in China means deep understanding of our consumers, knowing where they are, and offering products and services that meet their needs," said Ho.

Zhu Danpeng, an independent food and beverage analyst, said that the approval of two HMOs in China marks a significant advancement for the country's infant formula industry. This development enhances innovation, product iteration, and quality — a crucial step for both domestic and international players, Zhu said.