Formula marketing, as for other fast-moving consumer goods, starts with a detailed understanding of the customer; on this can be built long-term relationships which are strengthened with careful segmentation and targeting. The resulting campaigns work at both a brand and generic level. Maintaining stakeholder support is also important. The fiscal strength of the key players ensure that this marketing activity is guided by the best global expertise.
The quotations in the results section come primarily from the interviewees with direct experience of BMS marketing (formula marketing experts [FMEs]), but the sentiments expressed reflect the comments of all the marketing experts interviewed. In addition, references are made to marketing and business documents, and in these cases citations are included.
Understanding your customer
Marketing is a complex and sophisticated art. In the formula industry, as in other consumer goods sectors, marketers seek to solve their customers’ ‘problems’, and to do so effectively it is essential to gain a detailed understanding of “who are you talking to, what’s in their head, how can you engage them, how do you sell yourself to that person” (FME). The approach is indirect, very much “a soft sell” building faux-friendships rather than making an overt sales pitch: “we want to build a relationship with you as a mother, we want to support you, we want you to see us as an ally and we want to subtly insinuate ourselves as your friend and support in a healthy pregnancy and a happy baby” (FME). Paradoxically, the only unmistakably factual material that is always included is the ‘breast is best’ declaration required by the WHO Code, but this is also used to good marketing effect. First, it aligns the company with WHO and the public health establishment. Second, it raises the topic of “first milk”, which is supposed to be a no-go area for marketing: “they cannot legally communicate about the first milk, it’s legally forbidden in most of the countries so they are always playing with the … [requirement to] mention that it is the best thing after the maternal milk” (FME). For example, one company’s ‘breast is best’ statement continues “unfortunately, not all mothers can breastfeed …”, and so into an overt pitch for its products (see Fig. 1).
Third it helps maintain a pretence that formula milk does not compete with breast milk: “so they are not even competing … they are smarter than that, they are just saying yeah, yeah of course the milk from the woman is the best, right, however we bring you this, this and this” (FME). At the same time, the commercial realities are clear: “in the ‘Baby Book’ they do track the percentage of what they call ‘share of stomach’, that is breast milk, so they are aware of rates of breastfeeding in a country, but I never saw any documents or strategies anywhere that were about how to get women away from breastfeeding. I mean it must be. Surely, it’s in the back of their minds; this is the free alternative that is reducing their market share, but there wasn’t conscious recognition of that so maybe that’s political I don’t know. Maybe the most senior people, they do talk about it” (FME).
Building long-term relationships with baby clubs and carelines
The relationship-building, its nuance and subtlety notwithstanding, is equally strategic; well-established relationships will last for years: “[corporation name] is always on a quest to find ways to identify women who are pregnant for the first time … right when they find out they are pregnant or early in their pregnancy because … how a woman feeds her first baby is how she is likely to feed her subsequent babies … first time mothers are the holy grail” (FME). Relationships can also span generations: “the music of [brand name], Baby Love [by The Supremes], has been there for more than forty years … so imagine your mum heard it, now you are hearing it; that’s an iconic asset; it’s running through generations” (FME).
Baby ‘clubs’ (Fig. 2) and telephone advice lines are the favoured vehicles for establishing and fostering these relationships: “we had a particular focus on what they call ‘one to one marketing’ which is reaching mothers individually and building individual relationships with mothers. The two big tools in their arsenal, their two favourite tools, were the [telephone advice line] and the [baby club] … I’d spend a lot of time advising marketing teams [in different countries] that the first two things you do are set up your [baby club and telephone advice line]; you can then do other things, but those are the two direct relationship building [tools] with mothers; those are the two ace cards to play”. And it is still very much a soft sell: “there is no mention of formula on the [telephone advice line], it’s just about insinuating the products as your friend”.
Digital technology has greatly enhanced these tools: “I have decks and decks of the different apps and digital things that [corporation name] created. Basically, their process was to ask in a given country what kinds of mothers are we talking to, what are the needs that those mothers have, and therefore what digital marketing do we create to meet those needs” (FME). These apps range from “an online ovulation calculator, to help women get pregnant in the first place” to “an app for mothers to reach other mothers who were up all night, so mothers who have a newborn baby and they are up at three am and they are lonely and bored, could connect to other mothers who are up at the same time and have a chat” (FME). Similarly, “when you sign up to the [baby club] you tell them what your due date is and whether you are at two months or eight months or wherever you are, and then you step into a series of emails that are timed to your stage of pregnancy” (FME). In return for this targeted support, the company gets a constant stream of personal data as well as enhanced sales: “they had significant evidence to show that these are effective at driving sales literally … they had very good evidence to show that if a woman is in the [baby club], if a woman has called the [telephone advice line], there is a significant correlation with her ultimately buying [corporation name’s] products” (FME).
Segmentation and targeting
This type of bespoke marketing means that one size will not fit all. The personal data are therefore used to segment customers into smaller, more homogenous target groups which then receive suitably honed approaches: “so, globally, [corporation name] target basically three kinds of mothers, and this is true in every country, so they call them Blue, Yellow and Red mothers (Fig. 3) … speaking of segmentation there’s your big three global categories” [FME]. In western countries, for example, the market principally comprises Blue and Yellow mothers, and there is a clear difference in the type of advertising they receive. Blue mothers (and fathers) get reassuring technical claims and promises about their child’s future from “our most advanced formulation yet” (Fig. 3): “‘inspired by forty years of breast milk research’, that’s a very clever claim, which essentially doesn’t mean anything technically, but which is a very clever way to imply to reduce guilt about not breastfeeding” … “That is a bang on for Blue mothers, ‘their future starts today’, she (mum) absolutely believes that” (FME). Meanwhile, for Yellow mothers the pitch is to “nourish their happiness” (FME) backed up by lots of gurgling, happy babies doing endearing things. The call-outs for the baby clubs (Fig. 2) epitomise these distinctions.
Again, this is strategic: target groups do not just get their own advertisements, they get their own brands, each backed by multifaceted marketing effort. New product development, such as ‘follow-on’ milks, ‘specialist’ formulas, or, the “BabyNes for It Moms baby nutrition system” (an espresso-like machine which uses pods to deliver “the exact perfect dose of milk for your baby”) [28], keeps the category vibrant, and in the case of specialist formulas, builds useful links with the medical establishment (see below). Point of sale display in both pharmacies (for associations of quality and medical respectability) and supermarkets (for associations of value) ensures ready access. Pack design reinforces brand values and links first milks with other products. (See for example, p.35 of Harris et al. for images [29].) All of this brand support is vital because “it’s brands that give things meaning, … it’s a short cut for communication, it bestows white powder with meaning that attracts a certain kind of woman and gets her to buy it” (FME). They give product and company a human face, a personality, a story to tell; and the sales pitch remains subtle, it is possible to “create a brand affinity without mentioning product” (FME).
This makes regulation extremely difficult: “When [corporation name] market infant formula they do need to tiptoe a bit around stuff before 12 months [promoting formula for babies under 12 months is supposed to be prohibited], but they still do all sorts of things. They don’t talk about product at all, it’s like, ‘Call our [telephone advice line]’, ‘Join our [baby club]’, no mention of a product, so you can still market without talking about a product” (FME).
Generic effects
Formula promotion also has a generic effect, as an award-winning campaign from a US multinational demonstrates (Fig. 4). A dramatic rise in US breastfeeding rates was identified as a threat, and this was being exacerbated by negative media coverage about BMS. As a result, the brand was being undermined. An advertising agency was therefore commissioned to “reinvigorate the Similac brand” and also “change the face of an entire industry” [30]. The result was the “Sisterhood of Motherhood” campaign using the formula trope of “doing what’s best for baby” [30]. At its core is a video showing a group of parents arguing in a public park, criticising each other for their choices and differences (about nappies/careers/sexuality/gender/feeding) but when one of the buggies (strollers) runs away down the hill they stop fighting and become united in their instinct to save the baby, which, with palpable relief, they succeed in doing [31]. The strapline then appears: “no matter what our beliefs, we are parents first – welcome to the Sisterhood of Motherhood”. It “was the most successful campaign ever for Similac” resulting in increased sales and vastly improved media coverage [30]. It also succeeded in changing the narrative about infant feeding, which is no longer a matter of scientific evidence, but lifestyle choices and beliefs. Breastfeeders are positioned as just one minority, with one set of beliefs.
Cognitive dissonance
This conceit that breast and bottle equate may help ease dissonance among formula marketers: “everyone ‘drinks the Kool-Aid’ that it’s a good thing, it’s based on breast milk research, it’s fairly genuine from the inside. No, I don’t think anyone thinks about it as reducing rates of global breastfeeding, most people come from commercial marketing backgrounds in which you sell software, you sell sausages, oh we are selling baby food, fine …” (FME). But, it does not entirely remove the disquiet: “So, did I have qualms at the time? No. Would I go back to it? No, I wouldn’t” (FME). The change of heart comes from external stimuli (in this case participating in the study played a role), not the industry: “Nowhere is there mention of that within [corporation name] there is no sense that you know we are basically selling tobacco, there is no, there is no consciousness of that that I detected … I don’t think we would have worked in it if we thought we were doing something evil” (FME).
Targeting the medical establishment
The industry takes care to keep external stimuli supportive by building strong financial and educational links with the medical establishment: “It creates a normality when the Royal Colleges [two names] that lay out the infant feeding guidelines, and set policy [in the UK], and set the standard, and create leadership culture … both now have relationships with [two corporation names]. It sanitises it, in my view, it’s a brand sanitiser, where we have key opinion leaders, Royal Colleges, our leading paediatric institutions in terms of hospitals [two names] all having comfortable and cosy relationships with infant formula” (PHE). The principal vehicle for this stakeholder marketing is ‘specialist formula’: “The Royal College is very clear that it only accepts money for specialist formula, it doesn’t accept money for general formula. Now the [WHO] Code is also very clear about the marketing of breast milk substitutes, and that these specialist formulas are definitely breast milk substitutes, and they normalise interactions between industry and the profession” (PHE). The medical profession can also provide a means of circumventing regulation, as another prize-winning campaign explains: “Mead Johnson communicated the benefits of its Enfa A+ Gentlease baby formula directly to doctors, to work around advertising regulations in the Philippines … The approach resulted in 40% sales growth after three months” [32].
More fundamentally, there was unease about commerce intervening in such a profoundly human area: “the first key moment [of pregnancy]”, “the departure point”, is “really not addressed by anybody except the brands” (FME). The search for competitive advantage can also be disturbing: “one I find awful, in Indonesia, that they are already enriching the milk to help develop the brain even more because [customers] really feel that from childhood [their child] needs to have more, more, more; this I found very tricky … it is going too far you know?”; “In [corporation name], the next big innovation was epigenetics, so the whole idea that a baby’s success starts very early and that genes change generation to generation, so if there are stresses in the environment, that’s encoded in genes. But basically it’s saying you need to be concerned about your baby, not just from birth but from way before birth. And I think the next thing they were going to promote with [brand name] is that it appeals to epigenetics in some way as well, which is very Blue mother. That’s what they were planning; … that was the next big thing coming down the pipeline” (FME). A 2016–17 multimedia campaign for a follow-on milk in Indonesia, is explained as addressing the “sceptical consumer” by launching “the Bebelac Grow Them Great Campaign to talk about Bebelac's functionality story”; that the formula delivers “benefits such as [a] developed brain, good digestive system and well-rounded child” [33].
Fiscal power
Market size and forecast
Processed food production in the global market is dominated by a handful of powerful multinational corporations. Nestlé (US$19,370 m brand value) and Danone (US$9098 m brand value) were ranked globally by Brand Finance as the two most valuable food brands in 2018 and ranked by Kantar Worldwide in 2017 as 13th and 19th, respectively, for household reach among the leading fast-moving consumer goods brands worldwide [34]. The global dairy industry generated sales of US$204.4bn in 2017, based on Rabobank data from the 20 leading dairy corporations [34]. BMS products are just one category within a huge portfolio of products these global corporations produce.
Data from 2015 demonstrated that six multinational corporations controlled more than half of the global baby food market (including BMS), Nestlé followed by Danone holding the biggest shares, and Kraft Heinz, Mead Johnson, Abbott and FriesslandCampina the remaining four (Euromonitor International, 2015, as cited by Save the Children [18]). In 2015, Euromonitor International valued global BMS retail sales at US$47bn globally and Nestlé as the lead company accounted for 22% of these global sales [35]. Forecasting by Euromonitor for the WHO, based on the upward sales trajectory and market research to 2014, predicted that global sales would be worth US$70.7bn by 2019 [11]. Another, more conservative, estimate for investors by a multinational vegetable fats producer using 2016 Euromonitor data suggest the global retail value will be US$62.5bn by 2020, and breaks the forecast down by category: 29% standard formula (0–6 months), 21% follow-on formula (6–12 months), 43% toddler formula (> 12 months) and 7% special formula (e.g. premature and allergy) [36].
Marketing budgets
The marketing budget data we identified are from disparate sources and we concur with Piwoz and Huffman on the difficulty of finding open access comprehensive or verifiable data on how much money companies spend to market BMS products [14]. Overall annual advertising expenditure in 2018–19 for the two companies holding the largest portions of the global baby food and drinks market was US$944.5 m for Nestlé USA, Inc. (Glendale, CA) for national advertising expenditure that included above-the-line advertising channels plus sponsorship [37], and US$1143.3 m for Groupe Danone S.A. (Paris) for traditional media advertising, direct mail, point of purchase and product samples [38]. Another business data source described the US Mead Johnson Nutrition Company as one that markets its BMS and children’s nutrition product lines to both parents and health care professionals in Asia, Europe, Latin America and North America. The company spent $223.8 million on advertising on “TV, print, and other consumer media, with an increasing focus on social and other direct media in 2016, up from $206.2 million in 2014” [39].
Older Nielsen data, from 2015, breaks down advertising spend by Nestlé SA in the USA, as US$5.58 m on advertising infant formula and US$4.01 m on toddler milk [29]. Abbott spent US$3.36m advertising infant formula and US$20.71 m advertising nutritional supplements in the USA in 2015, and Mead Johnston Nutrition spent US$12.82 m advertising toddler milk and US$0.81 m on infant formula [29]. Overall, US$9.75 m were spent on advertising infant formula and US$16.83m on advertising toddler milk in the USA in 2015, mostly on television and in magazines [29].
In the UK, Nielsen data show that £13.2 m (approx. US$16.1 m) was spent on advertising BMS in 2018 using traditional media channels (which excludes sponsorship, search and social advertising channels), up 12% from the previous year but 23% lower than in 2015 [40]. BMS advertising comprised 80% of the total advertising expenditure for baby food and drinks [40]. Further analysis of Nielsen advertising data by Mintel, showed that Danone (the UK market-leader in sales value and volume) spent £13.4 m on baby food and drink (including BMS), and spent more advertising its follow-on milks (83% of spend) than other infant formula brands. As the analysts note later in their report, “The key to growth will be in keeping older toddlers/pre-schoolers buying into the category [baby food and drink] for longer, if the birth rate continues to decline”. Advertising spend by Nestlé in the UK in 2018 was far lower (less than £0.1 m), a “dramatically reduced” spend from the historically major spender [40].
Profit margins and pricing strategies
An analysis of company reports from five of the biggest baby food companies gave an indication of the profitability of the broader baby nutrition category. A 23.3% weighted average of profits demonstrates why investors are interested in the category [18, 41]. Some business analyst reports described BMS products as “high-margin” categories, alongside pet food and premium coffee (e.g. by Business Monitor International [42]).
Companies have taken the opportunity to premiumise their BMS products. In an investor seminar presentation, Danone endorsed their brands and strategies for mid- to long-term growth drivers in the Chinese market, including Aptamil Classic, Nutrition Classic and Aptamil Platinum, as being “well suited to address untapped opportunity in ultra-premium IMF [infant milk formula] segments”, divided into pricing segments described as “mainstream … super premium … ultra-premium … [and] ultra-premium+” [43]. Similarly, in 2017 Mead Johnson describe their ‘routine’ infant formula products and their ‘premium-priced’ product, the latter introduced into “certain geographies” (for the United States ‘Enspire’, and in China ‘Enfinitas’) with innovative components alleged to be “naturally found in human breast milk [to] provide important benefits (lactoferrin to support immune health and MFGM [Milk Fat Globule Membrane] to foster cognitive development)” [44].
Global reach
Other global stakeholder companies include, for example, the suppliers of supplementary ingredients and packaging to the BMS industry. One US firm has agreements to supply docosahexaenoic acid to almost 30 BMS manufacturers that market products in more than 75 countries [45]. A packaging firm in Sweden, with 15 production sites in ten countries, counts the BMS industry as key customers of their “high-performance barrier packaging solutions … to protect and promote the content” [46].
The size and global reach are viewed by business analysts as an asset. The acquisition of Mead Johnson Nutrition Company by Reckitt Benckiser Group Plc in June 2017 “supports future growth operations and expansion plans in various developing markets such as China, Vietnam and the Philippines and in various other parts of Latin America region” [47]. Through Mead Johnson’s Enfamil brand (infant formula, children’s nutrition, and other nutritional products) and Nutramigen brand (specialty formula products) the company markets and sells approximately 70 different products to mothers, health care professionals, and retailers in 50 countries in Asia, North America, Latin America, and Europe [47].
Analyses funded by the WHO have estimated the carbon footprint, as greenhouse gas emissions, from the production, emissions from transport and in-home sterilisation of bottles, and preparation of powdered BMS targeted at infants of 0–6 months to be consistently higher than that for breastfeeding in all the countries tested [48]. Breastfeeding’s carbon footprint included carbon cost of the additional food required to maintain the mother’s energy balance while breastfeeding. The WHO have also cited USA data for the vast tonnage of single-use BMS packaging (plastics, cans, metal and paper) that ends up in landfills [11]. Some of the most popular BMS products in the USA are ready-to-feed single-use plastic bottles of formula with teats.
Lobbying power
Marketing to policy makers by “treating government departments as discrete markets to be targeted and sold to, as well as understanding the culture and buying process, … [using] public affairs departments … to influence government and to create good relations with them” is part of a corporate strategy [49]. There is an imbalance of government fiscal policies in many countries that have incentivised families to use BMS rather than to breastfeed [50]. These have included government-subsidised BMS products provided through community welfare programs and BMS companies providing health workers’ education and training within countries’ hospital and public health frameworks. Further, partnerships between the BMS industry and government are increasingly proposed as solutions to infant and child food security issues [51]. Evidence of commercial stakeholders in the BMS industry influencing local policies for infant feed practices has been reported in several countries [14], and more recently in the USA, lobbying by industry stakeholders intensified before a meeting of the WHA in 2018 [52].