With China’s declining birth rate reshaping the infant formula market, The a2 Milk Company is aggressively expanding into senior nutrition, launching China-label fortified adult milk powders to capitalize on a rapidly growing, yet competitive segment. CEO David Bortolussi highlights the higher profitability of fortified products and the need to diversify beyond infant formula. Meanwhile, the company is also eyeing South East Asia, the Middle East, and the U.S. for expansion, with potential future moves into the supplements sector.
Insights & Strategic Moves
Senior Nutrition as the Next Growth Engine
a2 Milk plans to launch China-label versions of its fortified adult milk powders to target bone, joint, muscle, and immune health.
The segment is growing at a double-digit rate, though margins remain lower than infant formula.
Shifting Focus from Basic to Premium Products
The company’s high-priced fortified milk powders with lactoferrin and Fortigel have outperformed basic milk powders, which struggle due to price pressures.
This premiumisation strategy aligns with evolving consumer demand for functional dairy.
China’s Infant Formula Market Faces Headwinds
a2 Milk holds 7.3% of China’s infant formula market, trailing behind Feihe (17.1%) and Danone’s Aptamil (13.6%).
With birth rates falling (-5.6% YoY), key players like Feihe and Biostime have seen profit slumps of 33.5% and 24.3%, respectively.
The super-premium segment—a former growth driver—has contracted by 23% (Sep 2023–Sep 2024).
Expanding Beyond China
South East Asia & Middle East: Expanded distribution in Vietnam and Singapore.
United States: Entered under FDA’s enforcement discretion policy and is now seeking permanent regulatory approval for its infant formulas.
Potential Entry into Supplements
While a2 Milk sees whey protein supplements as challenging due to its beta-casein focus, the company may explore fortified nutritional supplements in the future.
Future Outlook
With China’s senior population growing rapidly, a2 Milk is well-positioned to capture long-term demand in the functional dairy segment. Success in premium fortified milk powders will determine its ability to offset infant formula declines, while expansion into new regions and supplements could fuel future revenue streams.
As China’s demographic shifts disrupt traditional dairy markets, a2 Milk’s strategic pivot to senior nutrition, premiumisation, and international expansion marks a crucial step in sustaining long-term growth.
Comments