China Baby Formula Market Defies Birthrate Slump

Despite China’s birthrate hitting record lows in 2025, the outlook for infant formula suppliers has not collapsed as feared, with market dynamics suggesting resilience and new growth avenues for premium brands and overseas players. Births in China last year fell to their lowest level since at least 1949, prompting a sell-off in shares of companies heavily reliant on the Chinese market, notably New Zealand-based a2 Milk, whose stock dropped sharply on investor concerns.

However, analysts and market data indicate that declining births don’t necessarily translate to a proportional drop in formula demand. Parents in China’s urban and middle-class segments continue to prioritise quality and trusted international brands, often willing to pay premium prices even as demographic trends weaken. This has allowed foreign firms like Nestlé, Danone and a2 Milk to maintain or even grow market share in selected segments, especially super-premium formula categories.

Import volumes tell a nuanced story: while formulas from New Zealand and other major exporters ballooned earlier in the decade, reaching tens of millions of kilograms annually, recent figures show sustained, albeit moderated, import levels, underscoring ongoing consumption despite fewer newborns.

Industry commentary highlights how brand value, quality perception and parent willingness to pay can offset demographic headwinds. Premium segments of the formula market have grown even as the overall population shrinks, and a consumer base that equates imported products with safety and nutrition supports this trend.

For infant milk formula makers, the message is evolving: demographic challenges demand strategic positioning, product quality leadership and deeper engagement with China’s sophisticated consumers, rather than simply relying on volume growth tied to birth rates.

Source : Dairynews7x7 Jan 27th 2026 Businesstimes

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