The United States Infant Formula Market is estimated to be valued at USD 7.2 Bn in 2024 and is expected to reach USD 9.3 Bn by 2031, growing at a CAGR of 4.4% from 2024 to 2031.

As more women join the workforce, the demand for nutritious and convenient baby feeding options is growing. Working mothers increasingly rely on infant formula as a substitute for breastfeeding., which continues to drive the size of this market.

Market Driver – Rising Per Capita Income

Rising per capita income has been one of the key drivers of growth in the United States infant formula market. As average incomes grow, American families have more discretionary funds to spend on quality nutrition and care for their infants. Many parents see infant formula as offering balanced, complete nutrition to support baby's growth and development.

With higher incomes, families feel they can better afford premium and specialty formula brands. These formulas often make extra claims around digestion, brain health or immunity support. Some new parents view them as worthwhile investments in their child's early years. For example, a 2020 report by The Brookings Institution found real median household income grew 7.1% between 2017-2019 in the US, as the strong economy and job gains helped lift earning power.

As incomes rise across income brackets, overall demand grows as more households can participate in the infant formula category. This allows companies to achieve more scale and reinvest in innovation. Looking ahead, if economic expansion continues post-pandemic and unemployment remains low, disposable incomes are poised to grow further.

Market Driver – Working Women Population Growth

The increasing number of working women in the United States is a key driver behind the growth of the infant formula market. As more women are entering or remaining in the workforce after having children, the demand for easy to use and portable substitutes for breast milk is rising sharply.

According to data from the United States Bureau of Labor Statistics, in 2021 around 57% of married mothers with children under the age of 3 were employed. This is a significant increase from 25 years ago in 1996 when the employment level was only 47%. Working women need convenient options to feed their babies when they are away from home for long hours at their jobs. This is where infant formula becomes indispensable as it allows new mothers to ensure their babies are adequately fed irrespective of their work schedules and locations.

The trend of more women joining or prolonging their careers is likely to continue in the coming years. International data also supports this trend.

Market Challenge – Stringent Regulations

The United States infant formula market faces significant challenges due to stringent regulations imposed by the Food and Drug Administration (FDA). The FDA regulates infant formula as a food and closely monitors infant formula products for safety, nutrition and compliance with the Federal Food, Drug, and Cosmetic Act. Manufacturers must register facilities and products with the FDA and ensure formulas meet strict composition and quality standards. Significant resources must be devoted to research and development, clinical trials, and compliance programs which increase costs substantially. This deters many new entrepreneurs from entering the market and limits the ability of existing companies to swiftly innovate and launch new customized product lines tailored to different consumer preferences and needs.

The extensive pre-market approval process also slows time to market for new formulations. On average, it takes 1-2 years for the FDA to review a new infant formula submission before granting approval. By the time products reach shelves, market trends and consumer demands may have shifted. Lengthy reviews constrain the nimbleness required to adapt to changing consumer profiles and remain competitive.

Market Opportunity – Premium/Organic Product Segment

The premium/organic product segment in the United States infant formula market provides a unique opportunity for growth in the coming years. As parents seek out formulations made from the highest quality, most natural ingredients for their little ones, the demand for premium and organic options has been steadily increasing.

According to the USDA, sales of organic food products grew by over 14% year-over-year in 2021. Parents feel organic infant formulas provide considerable advantages over traditional formulas when it comes to avoidance of potentially harmful additives, chemicals or GMOs. Some of the popular organic infant formulas contain probiotics and prebiotics for gut and immune health as well as DHA and ARA for brain and eye development.

This concern for "clean labels" among consumers looking to prioritize babes' nutrition aligns well with premium and organic formulas. The commitment to sourcing the highest quality, pesticide-free and Non-GMO Project Verified ingredients also resonates with parents. Premium organic options are perceived as natural, pure and "fresh" compared to conventional formulas. This perception of enhanced purity, premium-ness and benefits for baby's development is expected to attract many new parents and drive future growth.

Insights, By Formulation: Consumer Preference for Flexibility

In terms of formulation, powder sub-segment contributes the highest share of 38.2% in the market owning to consumer preference for flexibility

As the most versatile formulation, powder allows parents to prepare bottles on demand for feeding. This is especially appealing for families with busy lifestyles as it provides the freedom to mix precise amounts of formula only when needed. Powder also permits storing pre-mixed bottles in the refrigerator for later use, eliminating waste from unused portions of ready-to-feed liquid or concentrate.

The do-it-yourself aspect of powder is seen as more natural by some parents compared to the pre-made options. Many find satisfaction in being able to custom-mix formula for their baby with complete control over ingredients. Additionally, powder tends to have a longer shelf life when unopened which provides peace of mind for storage. With its portable packaging, powder formula is also well-suited for travel which adds to its demand. While it requires more preparation time, overall powder remains the preferred choice due to the independence, freshness and value it brings to caregivers in their daily routines.

Insights, By Distribution Channel: Widespread Availability and Discounts in Supermarkets

In terms of distribution channel, supermarkets sub-segment contributes the highest share of 32.2% in the market owning to widespread availability and discounts

Within distribution channels for infant formula in the United States, supermarkets claim the top position in market share due to their widespread availability and discounted pricing. As standard features of most neighborhoods, supermarkets allow parents easy access to a full array of formula options without traveling long distances. Their large shelf space devoted to infant products makes finding specific brands or formulations hassle-free. Supermarkets also regularly offer formula as a “loss leader” item to lure shoppers through discounts and loyalty programs. This value-conscious approach resonates well with budget-minded families. The extra space for bigger package sizes in supermarkets is additionally alluring to those seeking better per-ounce pricing on large formula containers. Due to unparalleled local presence and savings appeal, supermarkets cement their importance as a foundation for infant feeding needs.

The major players operating in the United States Infant Formula Market include Aussie Bubs, Inc., Else Nutrition Holdings Inc., Reckitt Benckiser Group PLC, Walmart Inc., Target Corporation, Abbott Laboratories, Arla Foods amba, Nestlé S.A., Bobbie Baby, Inc., and Danone S.A.

• In July 2023, Similac introduced a new line of organic formula, catering to the increasing demand for natural and clean-label products among parents.
• In June 2023, Enfamil launched a specialized formula designed to address specific dietary needs for infants with allergies, receiving positive feedback from the medical community
• In March 2023, Gerber announced a partnership with a renowned nutritionist to develop a comprehensive guide for parents on infant feeding practices and nutritional needs.

• By Formulation
  • Ready to Feed
  • Powder
  • Liquid Concentrate
• By Distribution Channel
  • Online
  • Hypermarkets
  • Supermarkets
  • Specialty Stores
  • Others