(A very interesting article from BusinessWeek.com, on Martek and its
additives - it really shows how business thinks about this, and gives some
insight into what business thinks is the future market for infant formula).
A Growing Boost for Baby Formula
Despite patent trouble in Europe, Martek, a maker of nutritional supplements
for infant sustenance, is set to further penetrate the field
http://www.businessweek.com/investor/content/jan2005/pi20050111_1011_pi008.h
tm
Your shorter link is: http://makeashorterlink.com/?H2276253A
Excerpt:
Supported by scientific data, infant formula producers have embraced the
idea of offering a DHA-inclusive product. In fact, all of the most
significant market participants (approximately 14 infant formula
manufacturers and 19 companies overall) have been licensed to offer Martek's
additive in formula, and we see strong incentive for them to do so. At the
start, this offered formula makers the opportunity to differentiate their
product and charge premium prices for the DHA-inclusive product. We suspect
that as they continue to grow shelf share of the inclusive formula, these
producers are boosting earnings growth by expanding margins in a business
where top-line growth had matured.
Furthermore, to win Women, Infant, and Children programs (state food-stamp
programs), formula manufacturers have presented the DHA-inclusive formula.
Since early 2002, about 46 state WIC programs have adopted a brand of infant
formula supplemented with Martek's oils, so all food-stamp purchases in
those states go for formula that includes Martek's additive.
We estimate the global market for infant formula at $7.9 billion, and
Martek's portion at about $400 million. In 2002, the first full year the
additive was offered by licensees, penetration exceeded 10%. In the most
recently reported quarter (ended October 2004) market penetration in the
U.S. was nearly 75%, and the company believes it will reach 100% penetration
in 2005. Our model predicts average global penetration of 64% in fiscal 2005
(ending October), 70% in fiscal 2006, and 75% in fiscal 2007.
(see link for full article)
Janice Reynolds
Saskatchewan, Canada
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