According to DairyReporter, Aptamil, a company within Danone's portfolio, has signed a letter of intent with Else Nutrition, a start-up producing plant-based formulas for infants and children made from almonds, buckwheat, and tapioca.

A Shift in Progress

The baby formula market is dominated by cow's milk formula, with over 90% of the industry considered to be based on cow's milk as the main ingredient. The remaining 10% consists of soy and rice-based formulas.

This is reflected in the global baby formula market size with cow's milk, estimated at $21.5 billion in 2021 and projected to reach $26.9 billion by 2028, according to Business Research Insights.

However, a shift is underway in the plant-based children's nutrition market. Else Nutrition, a startup originally from Israel but now headquartered and publicly listed in Canada, produces formulas for infants and children using more diverse ingredients such as almonds, buckwheat, and tapioca.

Now, Else Nutrition has caught the attention of the major dairy producer Danone, the owner of child nutrition brands Aptamil and Nutricia. The two have agreed to a multi-stage collaboration allowing Danone to license Else Nutrition's products for sale under its own brand.

Overall Benefits

The first stage of the collaboration covers a licensing agreement, enabling Danone to produce, market, and sell Else's products within its own portfolio. Additionally, the parties will negotiate "other opportunities" beyond product marketing.

A Danone spokesperson told FoodNavigator that the two parties have signed a letter of intent "only" at this stage. "The purpose of the LOI is to explore a potential licensing agreement, and the parties anticipate concluding negotiations by Q1 2024."

Else's 100% plant-based formula is rich in "healthy fats," gluten-free carbohydrates, and essential vitamins and minerals, said co-founder and CEO Hamutal Yitzhak at last year's Future Food-Tech event.

The startup's goal is to mimic the "overall benefits" of human milk on the digestive system.

"Our technology looks at human milk as a whole and its benefits. We are not trying to replicate a specific ingredient as it contains hundreds of different substances, and we probably will never succeed in replicating it completely... So why not look at its benefits; why not look at the outcome rather than the input."

From North America to Europe

Else currently sells on markets in the US and Canada and just last month launched its toddler formula in the UK.

"The UK represents our first entry into a profitable European market, and we expect to enter other European countries shortly," commented Yitzhak at that time.

Danone has made strides in plant-based children's nutrition in recent years. Last year, the company launched the first Dairy & Plants Blend formula for children under the Nutrilon brand in the Netherlands.

The product was developed to appeal to parents interested in offering their babies vegetarian and flexitarian options, with Danone noting the increasing plant-based consumption in Europe.

"We found that parents and consumers in the Netherlands are very interested in plant-based foods," said Manuela Borella, Vice President of Global Plant-Based Strategy and Business Acceleration, to FoodNavigator.