Chinese infant formula consumer preferences are shifting toward trust in domestic brands, nutritional science value, and online channels

Overview

This report is Citi's sixth annual proprietary China infant formula survey, produced by Citi's global infant formula team in collaboration with the Citi Research Innovation Lab. The sample includes 1,200 Chinese parents and caregivers from tier-1 to tier-5 cities who purchase infant formula. Across 11 key findings, the report analyzes the impact of recalls and stockouts, perceptions of domestic brand quality, consumption upgrading, changes in breastfeeding, HMO and added nutrients, online channels, parenting plans, government support, zodiac factors, expansion into adjacent categories, and attention to shelf life on the industry and related companies.

Core views

The core views include: first, recent recalls and stockouts have driven consumers more toward Chinese brands rather than simply toward other international brands; second, perceptions of domestic infant formula quality continue to improve, consumers place greater importance on nutritional value and scientific efficacy, and the importance of country of origin is declining; third, premiumization and higher spending are cushioning the volume pressure caused by falling birth rates; fourth, the importance of HMO and other added nutrients is rising, benefiting brands with R&D, registration, and premium product capabilities; fifth, emerging channels such as online, CBEC, and Douyin/TikTok continue to gain importance, though the pace of further penetration may slow; sixth, stock implications are clearly differentiated, with Feihe and H&H relatively benefiting, a2 Milk weighed down by supply constraints and domestic substitution pressure, Danone and Nestlé facing recall and domestic substitution pressure but still benefiting from premiumization and online channels, and Abbott having lower direct relevance to China's infant formula market.

Analysis framework

The report uses a combination of consumer questionnaires, annual trend comparisons, event impact analysis, and company mapping. The survey covers parents and caregivers across tier-1 to tier-5 cities in China and maps consumer responses on brands, country of origin, nutritional value, HMO, price, channels, breastfeeding, and parenting plans to companies such as a2 Milk, China Feihe, Health and Happiness, Danone, Nestlé, and Abbott.

Methodology notes

• Consumer researchCiti China annual proprietary infant formula survey

  Sample of 1,200 parents and caregivers

  By surveying Chinese consumers who purchase infant formula, the study identifies brand preferences, purchase factors, channel changes, spending changes, and shifts in feeding methods.

• Event-driven analysisRecall and stockout impact mapping

  Availability of recalled brands and consumer brand-switching behavior

  The report combines recall and stockout experiences related to Danone and Nestlé Wyeth brands with the proportions of consumers switching to Chinese brands or other international brands to assess the potential winners and losers across companies.

• Category structure analysisPremiumization and nutritional science value framework

  Nutritional value, HMO, added nutrients, and premium product mix

  The report argues that as consumers shift from brand and country of origin toward nutritional science value, premium products, HMO additions, and R&D capabilities become key competitive priorities in the industry.

• Channel analysisAnalysis of online channels, CBEC, and emerging platforms

  Online pricing, breadth of selection, and convenience

  The report tracks the trend of consumers shifting toward online channels, cross-border e-commerce, and emerging online channels such as Douyin/TikTok because of lower prices, broader selection, and convenience.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• a2 Milk

  International brand affected by China infant formula consumption trends

  Strengths

  Premiumization, the new Genesis launch, HMO and added nutrient trends, and growth in online English-label products all provide potential support.

  Weaknesses

  Chinese consumers shifting toward domestic brands, improving perceptions of domestic quality, and the company's own supply constraints weaken its ability to capture recall-related opportunities.

  Comparison

  Compared with domestic brands, a2 Milk relies more on New Zealand production and international brand positioning; compared with other international brands, its English-label products perform better in online channels.

  Risks

  Persistent supply chain constraints, Genesis stockouts, high customer reacquisition costs after losing customers, and a deepening domestic substitution trend.

• China Feihe

  Leading domestic infant formula player and potential beneficiary

  Strengths

  Its positioning as 'better suited for Chinese babies,' 68% of 2025 sales from premium and ultra-premium products, progress in HMO registration and R&D, 26% online revenue mix, and the launch of a fresh ingredient traceability system in January 2026.

  Weaknesses

  The industry still faces a low-single-digit decline in the 0-3-year-old infant and toddler population in 2026E, and Feihe's direct incremental benefit from the recall event may be less obvious than H&H's.

  Comparison

  Compared with international brands, Feihe benefits more from improving perceptions of domestic quality and consumers' emphasis on freshness.

  Risks

  Declining birth rates, price competition, weak industry demand, and weaker-than-expected ramp-up of new HMO products.

• Health and Happiness

  Beneficiary in premium and ultra-premium infant formula

  Strengths

  Its Europe-produced premium and ultra-premium products align with consumer demand for safety and quality; ultra-premium share reached 22.1% in Jan-Feb 2026, online sales grew 45% in 2025, infant formula sales grew 72% in 1Q 2026, and it launched an HMO-added product in April 2026.

  Weaknesses

  Its global supply chain model may come under pressure as consumers place strong emphasis on shelf life and freshness.

  Comparison

  Compared with Feihe, H&H is more likely to directly capture some consumers shifting away from recalled foreign brands; compared with a2 Milk, its recent execution and inventory performance are stronger.

  Risks

  Rising sensitivity to shelf life, supply chain management pressure, and the drag of declining birth rates on the BNC business.

• Danone

  International infant formula brand and participant in the imported segment

  Strengths

  Premium products such as Aptamil, local production capability, upgrading in nutritional science value, and online channel scale provide support.

  Weaknesses

  Improving perceptions of domestic quality create pressure, and the drag from the infant formula business will still take time to digest.

  Comparison

  The report believes Nestlé's recall had a broader impact on shelf availability, and Danone may gain some share from Nestlé in the imported segment.

  Risks

  Repairing consumer trust after the recall, domestic substitution, and weak infant formula growth.

• Nestlé

  Participant in international infant formula and nutrition businesses

  Strengths

  It has a historical foundation in HMO and nutrition R&D, and trends in online channels and premiumization still benefit large multinational companies.

  Weaknesses

  The recall had a broad impact on shelf availability, and consumers shifting toward domestic brands is more unfavorable for it.

  Comparison

  Relative to Danone, the report believes Nestlé suffered a greater negative impact from the recall and from perceptions around inventory availability.

  Risks

  Slower-than-expected recovery in the nutrition business, damaged brand perception after the recall, and substitution by domestic brands.

• Abbott

  Nutrition company with lower direct exposure to China infant formula

  Strengths

  Management continues to emphasize portfolio diversification and focus on restoring growth.

  Weaknesses

  It stopped directly selling pediatric nutrition products in China in 2023, 1Q 2026 Nutrition sales fell 7.7% year on year, and both U.S. and international sales are under pressure.

  Comparison

  Compared with other companies, Abbott has weaker direct sales relevance to the China infant formula survey.

  Risks

  Slow recovery in the Nutrition business, external pressures such as the U.S. WIC contract and NEC litigation, and the impact of improving perceptions of domestic brands on the adult nutrition business.

Key data

• Survey sample1,200Parents and caregivers from tier-1 to tier-5 cities in China who purchase infant formula.
• Survey editionSixth yearCiti has continuously published its proprietary China infant formula survey since 2020.
• Stockout experience for recalled brands84%Respondents currently or previously purchasing Danone or Nestlé Wyeth-related brands said they encountered label unavailability or stockouts this year due to recalls.
• Switched from recalled brands to Chinese brands63%Among respondents who had purchased Danone or Nestlé Wyeth, the majority switched to Chinese brands.
• Switched from recalled brands to other international brands35%The proportion switching to other international brands was lower than the proportion switching to Chinese brands.
• No preference between domestic and foreign brands55%Most respondents had no clear preference for domestic or foreign brands.
• More likely to buy foreign brands produced in China50%Versus 24% in 2025; this indicates a significant rise in acceptance of China as a production location for foreign brands.
• Less likely to buy foreign brands produced in China6%Versus 9% in 2025, reflecting reduced negative resistance.
• Improved perception of Chinese brand qualityNearly three-quarters of respondentsThe proportion whose views of Chinese brand quality improved over the past 12 months was higher than for foreign brands.
• Improved perception of foreign brand qualityAbout half of respondentsThe improvement ratio was lower than for Chinese brands.
• Feihe premium product mix68%Share of 2025 sales coming from premium and ultra-premium products.
• Feihe online revenue mix26%Online sales as a share of total revenue in 2025, with an online market share of 13.2%.
• H&H online sales growth45%Growth in infant formula sales through online channels in 2025, with sales mix rising to 29%.
• H&H infant formula sales growth72%Year-on-year growth in infant formula sales in 1Q 2026.
• H&H ultra-premium market share22.1%Ultra-premium infant formula market share in Jan-Feb 2026.
• Shift to online channelsMore than three-quartersThe proportion of respondents buying more infant formula through online channels because of lower prices, up further from more than half in the previous year.
• Share of emerging online channels as main shopping destination14%Versus 5% in 2025; emerging online channels include Douyin/TikTok and others.
• Abbott nutrition business sales$2.017B1Q 2026 Nutrition sales, down 7.7% year on year.

Impact & implications

At the industry level, the survey reinforces the trend in China's infant formula market away from foreign-brand and country-of-origin narratives toward trust in domestic brands, nutritional science value, and premiumization-led competition. For stocks, domestic leaders and companies with strong premiumization execution are more likely to benefit, especially Feihe and H&H; while a2 Milk benefits from premiumization, HMO, and growth in online English-label products, it is pressured in the short term by supply chain constraints and domestic substitution; Danone and Nestlé still have advantages in premiumization, R&D, and channel scale, but recalls, shelf availability, and improving perceptions of domestic brands create pressure; Abbott is more neutral because it has already stopped directly selling pediatric nutrition products in China, so the survey has less impact on its China infant formula sales.

Risks

• China's 0-3-year-old infant and toddler population continues to decline, leaving ongoing pressure on industry volumes.
• Recall events may accelerate consumers' shift from international brands to Chinese brands, causing long-term market share migration.
• Supply chain constraints may cause brands to miss the demand window created by recalls and premiumization.
• Consumers are paying more attention to shelf life and freshness, which may compress the error tolerance of cross-border and global supply chain models.
• Online price comparison is more transparent, which may intensify promotions and price competition.
• As HMO and added nutrients become competitive focal points, weaker-than-expected R&D, registration, and capacity rollout may reduce the contribution of new products.
• If marriage trends, zodiac factors, or government subsidies provide less support to births than expected, birth rate pressure may still be difficult to fully offset.

What to watch

• Sales ramp-up and gross margin performance of Feihe's new HMO-added infant formula products in 2026.
• Whether H&H's infant formula growth in 2026 can sustain the strong momentum seen in the first quarter.
• Progress in easing a2 Milk's supply chain constraints and whether Genesis products can regain availability.
• Changes in shelf availability, brand trust, and imported-segment market share for Danone and Nestlé after the recalls.
• Penetration rates and price discipline across online channels, CBEC, and emerging platforms such as Douyin/TikTok.
• Whether consumer acceptance of foreign brands produced in China continues to improve.
• Whether shelf life, freshness, and ingredient traceability become new core dimensions of brand competition.
• The actual impact of government subsidies, changes in financial pressure, zodiac years, and marriage and childbirth plans on birth rates.