Goldman Sachs has warned investors to expect five years of zero growth in the global market for infant milk formula, as China approaches a critical demographic inflection point and the world’s most important market runs short of new babies.
Chinese infants, whose consumption of higher-end formula has surged in recent decades thanks to the rising middle-class incomes of their parents, had become the most important source of growth for a sector dominated by companies such as Danone, Reckitt and Abbott Laboratories.
However, in a report circulated to clients this week, the US investment bank said it had turned negative on the formula industry in light of its new forecast that China’s infant population would decline at an average 7 per cent per annum over the next five years.