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Canada 14.12.2023

Danone partners with Else Nutrition to enter vegan baby formula market

Source: The DairyNews
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French food giant Danone is making a significant move into the vegan infant formula market through a collaboration with Canadian brand Else Nutrition. With a dominant position in the UK market with brands like Aptamil, Nutricia, and Cow & Gate, Danone will license Else's vegan baby formula products under its own branding.
Danone partners with Else Nutrition to enter vegan baby formula market
The global infant formula sector, estimated at $50.7 billion, is witnessing a surge of 5.6% annually, but it is primarily dairy-based. Else Nutrition's unique approach, using almond butter, buckwheat flour, and tapioca maltodextrin, sets it apart.

Danone, the world's second-largest baby formula maker, is expanding into the vegan market through a multi-stage partnership with Else. The collaboration involves Danone licensing Else's products for sale under its own branding, with negotiations expected to conclude by the end of Q1 2024.

Else Nutrition's vegan instant formula boasts nutrient density, featuring easily digestible, gluten-free carbohydrates, along with essential proteins, fats, fiber, and vitamin E. The Canadian startup has garnered awards for its products and recently expanded its retail presence from 3,000 to 13,000 stores across North America.

The move into the UK market by Else Nutrition raises questions about Danone's agreement to sell the products under its name, given its significant 71% control of the market. The UK Competition and Markets Authority (CMA) is investigating the baby formula market, expressing concerns about rising prices and limited options for parents. Danone, which paid £175.6 million in dividends last year, asserts that the market is competitive and pledges to work constructively with the CMA.

While Nestlé, with a 14% market share in the UK, has filed a patent for a potential vegan baby formula, Else's entry into the market offers a unique plant-based alternative. Other players in the plant-based infant formula space include Australia's Sprout Organic, ProSobee® and Earth's Best® in the US, and Bebe Mandorle in France. Additionally, companies like TurtleTree, Helaina, Wilk, and BIOMILQ are exploring cellular agriculture to produce proteins for infant formula.

As Danone ventures into the vegan baby formula market, it signals a strategic response to the growing demand for plant-based alternatives in infant nutrition.
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