Country’s baby food market can expand further: Nestlé corp affairs director

Nestlé Bangladesh, one of the top infant formula manufacturers, has been marketing baby food in Bangladesh for almost three decades. A year ago, the company also set up a processing, filling and packaging plant in the country. Debabrata Roy Chowdhury, who has recently been promoted as the director of corporate affairs of the multinational company, talks to The Business Standard about the country's baby food market and Nestlé's business. 
 
How big is the baby food market in Bangladesh and what is Nestlé's position here?
 
The baby food market in the country is worth around Tk4,000 crore. Nestlé supplies 55-60% of the 10,000 tonnes of baby food needed in the country per year.
 
There are markets for Lactogen in more than 180 countries around the world, but it is processed in only 34 countries. Bangladesh has recently entered the list by setting up a processing, filling and packaging plant in Bangladesh.
Our growth in the baby food business is about 10%. Baby food accounts for about 50% of Nestlé's business. We also have products for adults, such as dairy, noodles, beverages and chocolate.
 
How healthy is baby food as an alternative to breast milk?
 
We never compare processed baby formulas with breast milk. We always say that breastfeeding is best for the baby. However, we make baby formulas for mothers who cannot breastfeed their children. Breastfeeding is helping to keep such babies in good health by providing an alternative to mothers.
 
Doctors also say when a baby is six months old, he or she should be fed other foods besides breast milk for proper nutrition. In some cases, mothers cannot breastfeed if they are sick.
 
Mothers often do not know what baby food would be suitable for their child. If the formula is not right, the children will fall sick. Using scientific research, baby food companies prepare formulas according to the children's age.
 
Could you elaborate on that?

Lactogen 1 – one of our baby formulas – is a spray-dried formula suitable for children from their birth to six months. Lactogen-2 is for children aged from six to 12, Lactogen-3 is for children from 12 months to two years and Lactogen-4 is for children above two years.
 
There is three times more protein in cow milk than breast milk. Besides, cow milk contains a lot of iodine, so children cannot absorb it directly. We market the cow milk after modifying it by adding nutrients that the children can absorb.
 
Families with limited income struggle to provide baby formulas for their children as branded products are costly. What do you think of it?
 
A big reason for the high price of branded products is the tax structure. We have to import materials by paying huge taxes and paying VAT on all the expenses. Our cost of producing a tonne of milk is at least one and a half times higher compared to normal milk. We have to comply with all kinds of regulations at every level to ensure the product's quality.
Full cream milk or other over-the-counter products available in the market are cheaper but they increase the health risks. So, consumers should buy baby formulas even if they are costlier.
 
Unilever and Arla Foods have recently started aggressive marketing in Bangladesh. Would this be a problem for you?
 
Having good competitors in the market is a good thing. I see this as an opportunity. Creating a market for a product through good competition is also useful for others. In such conditions, consumers become more interested in good companies. When large companies grow, the market for small companies and over-the-counter products shrink. If there is a company that complies with the market, everyone has to increase compliance.
Besides, we cannot supply according to demand in the country. There is a huge demand here.
 
What is the market potential of baby food products in Bangladesh?
 
The empowerment of women in our country is an example even for developed countries. The number of working women here is quite large and employment opportunities for women are increasing constantly. Breastfeeding is not possible in the case of working mothers, and so they need alternatives.
 
We play a role under these circumstances. So there is scope for expanding the market. Our growth in the baby food market is currently below 10%. We believe it will grow further. Moreover, Bangladesh is not a country that is self-sufficient in milk production, so there is scope for the milk market to grow.