China formula approval opening new doors for French dairy firm ESI Nutrition

By Cheryl Tay contact

- Last updated on GMT

The latest approval adds to ESI Nutrition's existing liquid formula approval for China, which ESI received about two years prior. ©Getty Images
The latest approval adds to ESI Nutrition's existing liquid formula approval for China, which ESI received about two years prior. ©Getty Images

Related tags: Infant formula, China, France

ESI Nutrition, a division of French dairy cooperative Laïta, is banking on both its powder and liquid milk formula capabilities to expand in China and the wider Asia-Pacific region.

The company recently received approval from the General Administration of Customs of the People's Republic of China (GACG) to produce powdered infant formula at its new manufacturing plant in Brittany, France, for the Chinese market.

This adds to its existing liquid formula approval for China, which ESI received about two years prior.

Speaking to NutraIngredients-Asia​, marketing manager Mathieu Lucot said, "At ESI Nutrition, we manufacture both powder and liquid dairy products, and these are the two main sales categories for us.

"We've been developing liquid formula for about 30 years, and like our liquid fornula, our powder formula is now also used for OEM manufacturing.

"Our goal now that we have received this approval is to target certain major players in the China market and secure a number of agreements with them, so we can boost their brands by providing them with specific formulations.

"Though we also have the existing approval for our liquid formula, we know Chinese consumers are generally not used to taking liquid formula.

"However, we have a good opportunity in this area, especially for maternal nutrition. It's common in Europe, and Chinese mothers have become more open to trying new formats to supplement their own health."

He added that ESI also anticipated that it may have to incorporate special ingredients, such as HMOs (human milk oligosaccharides), lactoferrin, probotics, prebiotics and DHA into its standard formulations should any of its customers require it, though it had not gotten such an order yet.

Satisfying the standards

According to Lucot, the latest certification represents a yet another milestone for ESI, as well as a recognition of its long-term investment in top-of-the-line equipment, high quality ingredients, and high manufacturing standards.

The company uses ingredients sourced from France and other parts of Europe, and the infant formula approval in China will allow it to fulfil contract manufacturing obligations for brands and manufacturers selling in the Chinese market.

At present, this covers stage one to stage three powdered infant formula, but ESI also has the potential to further broaden its presence in China with more products for different demographics.

Lucot said: "We get all our ingredients only from suppliers who are certified infant nutrition ingredient providers and are highly graded, so we can make the best formula possible.

"China's standards are now much higher than before, and it's not only finished products that are held to these standards, but ingredients as well."

Indeed, the infant formula ingredients and finished products sold in China — both imported and domestic — have been pegged as 'safer than ever' by industry experts, fulfilling a regulatory goal sparked by the infamous 2008 melamine scandal.

Lucot said this approval was indicative of the quality of ESI's products and processes, and would do well to build consumer trust and confidence.

Furthermore, as a foreign company, ESI has a market advantage in China, where imported products continue to be viewed more favourably than domestic goods, particularly in the area of food and nutrition.

The low proportion of Chinese mothers who breastfeed also make the country's constantly growing infant nutrition market one of the world's biggest.

Adult supervision

Outside of China, Lucot said ESI has an ongoing project with a Taiwanese company, but declined to reveal further details just yet.

He added: "We are sure there are opportunities for us in South East Asia. China is our primary market, but we won't close the door to other markets in Asia.

"Japan is one example. It is a very mature market, and the recent liquid formula approval could definitely provide some interesting opportunities for us. We also see possibilities there in the area of powdered formula."

He also expressed interest in sectors beyond infant nutrition in APAC, saying that while there was certainly potential for ESI's infant nutrition products in the region, the company was also looking to develop adult nutrition products for the APAC markets.

Broadening ESI's prospects further beyond infant and adult nutrition, Lucot also referred to Asia's ageing population as a lucrative market opportunity.

"We know that in Asia, there are also good opportunities for companies involved in clinical nutrition in both powder and liquid formats, depending on the needs and preferences of older consumers.

"We need to keep developing products to maintain our visibility and secure agreements with key players in the market, both in China and elsewhere in APAC.

"So far, things are looking good for our liquid formula production — we have a project in the pipeline (that I can only speak more about in future) and we have high expectations for it."

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