The a2 Milk Company is diversifying its nutrition products to target kids as well as seniors in China, as the company seeks to grow beyond the infant milk formula segment.
a2 Milk is expanding into the double-digit growth fortified milk powder category for kids which was valued at US$1 billion, while it is also building presence in the US$1.5 billion senior milk powder nutrition market with new products formulated to support immunity, bone, gut and heart health.
These 2 segments, when combined, is still small when compared to the US$25 billion infant formula segment, however the diversification helps the company to extend its reach to new consumer segments in a country which experiences falling birth rate.
a2 Milk Chief Executive David Bortolussi said, “We have the opportunity to be more relevant over the life cycle of a person. When we look at adjacent categories, the fortified milk market is a growing category, particularly in the kids and the seniors segment.”
In the infant milk formula category, a2 milk is countering the decline in this market with the launch of 2 new formulas namely the ultra-premium a2 Genesis and Gentle Gold, priced below a2 Platinum. Bortolossi added, “In our infant milk formula business in China, we are a top 5 player and one of the best-performing brands, still enjoying 7% growth in a market that declined 6%.”
A2 Milk is also winning more market share in the fast-developing lower-tier cities in China.
China is also projected to have at least 300 million elderly population by 2030, as such demand for nutritional milk powder for seniors will continue to increase and some day in the future, will surpass demand for baby milk.
