The Hungry Dragon - China in the Global Clinical Nutrition Market

The Hungry Dragon - China in the Global Clinical Nutrition Market

China has yet to claim first or second billing in most major clinical or healthcare product markets, despite its exceptional economic growth, heavy public-private mix in healthcare investment, and its roughly 1.4 billion residents. China’s potential is already evident in clinical nutrition with Kalorama Information estimating it to be the second largest national market. Clinical nutrition products include infant formulas (powdered, liquid concentrate, ready-to-drink), enteral nutrition formulas and beverages (ingested or tube fed liquids), and parenteral nutrition products (delivered intravenously).

Infant nutrition is the largest clinical nutrition market segment in China. Major international formula brands have a strong presence in the country where consumers remain wary of domestic and less-known brands following a melamine scandal and other food quality incidents.  Only 80 out of the approximately 130 domestic formula manufacturers in China will remain in business after failed quality control checks or failed permit applications to the China Food and Drug Administration (SFDA). The remaining producers are expected to consolidate to 10-15 larger domestic companies by the year 2015. Also in November 2013, the SFDA announced that it was prohibiting the production of infant formula milk-based powder through contract, OEM and sub-packaging. Domestic formula industry consolidation is expected to strengthen the hand of domestic manufacturers against international giants such as Danone, Mead Johnson, Nestle, and Abbott Laboratories.

Annual growth in the Chinese enteral nutrition market is projected above 10% with significant market development and penetration into the expanding healthcare system still possible. China’s health professionals remain inexperienced with enteral nutrition versus standard external methods. Greater and informed utilization of standard and specialized enteral nutrition products in China is expected to drive market growth. Companies such as Fresenius have invested in China with a focus on product education and Mead Johnson has invested in added sales staff to China in an effort to increase presence in the country.

China’s 65-and-over population, a group upwards of 130 million people, is increasing at a rate of 3.5% annually. In 2014, this large aging population was partly responsible for the growing parenteral nutrition market. Baxter is one of many companies continuing to invest in China’s parenteral nutrition market. Market growth for parenteral nutrition products in China is projected to average around 10% annually in coming years.