Vietnam Infant Formula Market- Trend Analysis and Forecast to 2030

Vietnam infant formula products market valued at USD 1.91 billion in 2022 and is projected to grow at a CAGR of 6.25% from 2020 to 2030. The market is characterized by a mix of domestic and international players, with major global brands establishing a strong presence in Vietnam. Domestic companies are also gaining traction by offering affordable alternatives tailored to local preferences.

Market/ Product Overview

The Vietnam infant formula market has experienced significant growth of 5-6% in recent years, driven by rising incomes, urbanization, and a growing awareness of infant nutrition. As the country continues to develop, there is a strong shift towards modern, high-quality products, including infant formula, which is increasingly preferred by Vietnamese parents. The market is characterized by a mix of domestic and international players, with major global brands establishing a strong presence in Vietnam. Domestic companies are also gaining traction by offering affordable alternatives tailored to local preferences. Vietnam’s young population and increasing birth rates further support the demand for infant formula. Additionally, government initiatives aimed at improving child nutrition and health have bolstered the market, encouraging both local and international companies to expand their product offerings. With a positive economic outlook and ongoing urbanization, the Vietnam infant formula market is expected to continue its upward trajectory through 2030.

Importance of Vietnam in Infant Formula Global Supply Chain

Vietnam is becoming increasingly important in the global infant formula supply chain due to its growing demand and strategic location in Southeast Asia. The country’s rising middle class and increased focus on child nutrition have attracted major international players, positioning Vietnam as a key market in the region. Additionally, Vietnam serves as a potential manufacturing hub, given its expanding dairy industry and improving production capabilities. Vietnam dairy products and alternatives market witnessed a CAGR of 5.25% during the period from 2018 to 2023.

Vietnam Infant Formula Production & Demand Trend

The production and demand for infant formula in Vietnam have been on a steady rise, driven by economic growth, urbanization, and increasing consumer awareness of child nutrition. Domestic production is expanding, with both local and international companies investing in manufacturing facilities to meet the growing demand. While domestic brands are gaining market share, the demand for premium, imported infant formula remains strong, reflecting the preferences of Vietnam's increasingly affluent population.

Vietnam Infant Formula Market Growth Factors

The growth of the Vietnam infant formula market is influenced by several key factors. Rising disposable incomes, particularly in urban areas, have led to a greater willingness to spend on high-quality infant nutrition products. The country's demographic profile, with a large proportion of young people and a growing number of births, drives consistent demand for infant formula. Urbanization is another critical factor, as it leads to lifestyle changes that increase reliance on formula feeding over traditional methods. Furthermore, the increasing awareness of the importance of early childhood nutrition, supported by government campaigns and health initiatives, has spurred demand for infant formula. The entry of international brands into the market, bringing advanced products and technologies, has also fueled growth. Vietnam's integration into global trade networks and free trade agreements has made it easier for foreign companies to enter the market, enhancing competition and product availability. The trend toward premiumization, with consumers seeking high-quality, specialized formulas, is also contributing to market expansion.

Vietnam Infant Formula Market Restraints & Challenges

The Vietnam infant formula market faces several challenges that could impact its growth. One significant challenge is the price sensitivity of the local population, which can limit the market for premium products and make it difficult for international brands to compete with more affordable domestic alternatives. Additionally, the market is highly competitive, with numerous local and international players vying for market share, leading to intense price competition. Regulatory challenges, including strict government regulations on advertising and labeling of infant formula, can also pose barriers to market entry and expansion. Moreover, concerns about counterfeit products and food safety can affect consumer trust and pose risks for manufacturers.

Vietnam Infant Formula Supply/Value Chain Bottlenecks/ Challenges

The supply and value chain of the Vietnam infant formula market faces several bottlenecks and challenges. One major issue is the reliance on imported raw materials, particularly for high-quality milk powder, which can lead to supply chain vulnerabilities and cost fluctuations due to exchange rate volatility and global market dynamics. Additionally, the distribution network in Vietnam can be challenging, especially in rural areas where infrastructure is less developed, making it difficult for companies to ensure consistent product availability. The regulatory environment, with its stringent requirements for product approval and labeling, can also slow down the time-to-market for new products, adding to operational costs. Counterfeit products in the market pose another challenge, as they can undermine consumer trust and harm brand reputation. Moreover, the increasing demand for premium products has put pressure on supply chains to maintain high standards of quality and safety, requiring significant investment in technology and quality control measures.

Infant Formula Price Setting Power of Vietnam

Vietnam’s infant formula market has moderate price-setting power, influenced by both domestic and international factors. While local manufacturers can influence prices through affordable products tailored to the local market, international brands often set higher prices due to their premium positioning and perceived quality. The overall pricing is also affected by import tariffs, supply chain costs, and competition from counterfeit products.

Infant Formula End-use Industries

The primary end-use industries for infant formula in Vietnam include the retail sector, which encompasses supermarkets, pharmacies, and specialized baby stores. Additionally, the healthcare sector, particularly hospitals and pediatric clinics, plays a crucial role in influencing consumer choices by recommending specific infant formula brands or products, particularly for infants with specialized nutritional needs.

Vietnam Infant Formula Trade (Export & Import) Trend

Vietnam’s infant formula market is predominantly import-driven, with a significant portion of high-quality and premium products being sourced from international markets, particularly from countries like Australia, New Zealand, and the United States. The demand for imported infant formula has been rising due to the growing preference for premium and specialized products among urban consumers. While domestic production is increasing, it primarily caters to the mass market with more affordable options. Vietnam’s export of infant formula is minimal, as local production is mostly focused on meeting domestic demand. The trade balance is heavily skewed towards imports, and this trend is expected to continue, with increasing consumer demand for high-quality imported products. The market is also influenced by Vietnam’s trade agreements, which facilitate easier access to international products but also increase competition within the local market.

Vietnam Infant Formula Market Competitive Analysis

The Vietnam infant formula market is highly competitive, with a mix of local and international players. Leading global brands such as Nestlé, Abbott, and Mead Johnson have a strong presence, capitalizing on their brand reputation and advanced product offerings. Domestic companies like Vinamilk are also prominent, leveraging their understanding of local consumer preferences to offer competitive products. The market competition is driven by factors such as product quality, price, brand trust, and distribution reach.

With 15 dairy farms in operation and a product portfolio featuring 250 SKUs across four main categories—Liquid Milk, Yogurt, Condensed Milk, and Powdered Milk—Vinamilk's brand value rose to USD 3 billion in 2023, up from USD 2.8 billion the previous year. This growth cements its position as the leading food brand in Vietnam and the 6th largest dairy brand worldwide. The company 84% of the revenue comes from domestic market.

List of Key Companies in Vietnam Infant Formula Market (Manufacturers/ Suppliers/ Exporters),

■ Vinamilk
■ Nestlé Vietnam
■ Abbott Laboratories
■ Mead Johnson Nutrition
■ FrieslandCampina
■ Danone
■ Nutifood
■ Morinaga Milk Industry
■ Dairygoat Vietnam
■ XO Vietnam
■ Fonterra Co-operative Group
■ Hero Baby Vietnam
■ Heinz Vietnam
■ Wakodo Co., Ltd.

Future Outlook

The future outlook for Vietnam’s infant formula market is positive, with steady growth expected through 2030. The market will continue to benefit from rising disposable incomes, urbanization, and increasing awareness of the importance of early childhood nutrition. Demand for premium and specialized products will likely grow, driven by the preferences of an increasingly affluent urban population. However, the market will need to navigate challenges such as price sensitivity, regulatory hurdles, and competition from both local and international players. Overall, Vietnam’s infant formula market is poised for continued expansion, supported by favorable demographic trends and economic growth.