Plant-based kids formula: Danone mulls ‘multi-stage collaboration’ with vegan start-up

The kids formula market is dominated by bovine formula, with more than 90% of industry thought to rely on cow’s milk as its primary ingredient. The remaining 10% is made up formula based on soy and rice.

This is reflected in the size of the global cow milk infant formula, valued at $21.5bn in 2021 and forecast to reach $26.9bn by 2028, according to Business Research Insights.

But change is afoot in the plant-based kids nutrition market. Else Nutrition, a start-up originating in Israel but now headquartered and publicly listed in Canada, is making baby and kids formula from more diverse ingredients such as almonds, buckwheat and tapioca.

Now, Else Nutrition has caught the eye of dairy major Danone, owner of kids nutrition brands Aptamil and Nutricia. The duo has agreed to a multi-stage collaboration that would see Danone license Else Nutrition’s products for sale under its own branding.

The first stage of the collaboration covers a licensing agreement so that Danone can make, market and commercialise Else’s products within its own portfolio. In addition, the parties will negotiate ‘other opportunities’ beyond product commercialisation.

A Danone spokesperson told FoodNavigator the two parties have signed a letter of intent ‘only’ at the stage. “The purpose of the LOI is to explore a potential license agreement, and the parties anticipate concluding the negotiations by Q1 2024.”

Else’s 100% plant-based formula is rich in ‘healthy fat’, gluten-free carbohydrates, and essential vitamins and minerals, co-founder and CEO Hamutal Yitzhak told delegates at the Future Food-Tech event last year​. The start-up’s aim is to mimic the ‘overall benefits’ of human milk on the digestion system. “Our technology is looking at human milk as a whole and at the benefits of it. We’re not trying to replicate a specific ingredient, because it contains hundreds of different substances and we’ll probably never be able to mimic it completely…So why not look at the benefits of it; why not look at the outcome rather than the input.”

Else is currently selling into the US and Canadian markets, and just last month launched its toddler formula into the UK. “The UK represents our first entry into the lucrative European market, and we expect to enter additional European countries in the near term,” ​commented Yitzhak at the time.

Danone has made advances in plant-based kids nutrition in recent years. Last year, the company launched its first Dairy & Plants Blend baby formula under its Nutrilon brand in the Netherlands.

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

“We’ve found that parents and consumers in the Netherlands are very interested in plant-based foods,” ​Manuela Borella, VP of global plant-based strategy & business acceleration told FoodNavigator at the time​.