Teva enters baby formula market
World's biggest generic drug maker to start marketing Nutricia's kosher breast milk substitutes in Israel in late 2011. 'We'll reach a market share of more than 15% within four years,' CEO says
Materna and Similac face competition: The Teva pharmaceutical company, which specializes in generic drugs, will begin marketing Nutricia's breast milk substitutes in Israel in late 2011.
Nutricia, a unit of international food company Danone, is the biggest company in Europe and the second biggest in the world in the field of milk substitutes. Its brands are sold in 120 countries. The products produced for Teva will be kosher, but not glatt kosher.
"We'll create a substantial change in the market dynamics, and I'm certain that the consumer will benefit," Teva Israel CEO Ron Meron said in a press conference Sunday.
"The collaboration between Teva and Nutricia will create real competition in the market by two dominant players, and we'll sell products for a fair price. Our goal is to reach a market share of more than 15% after four years of activity."
Remedia affair affected competitiveness
Teva Israel, whose activity is estimated at some NIS 1 billion ($29 million) a year, announced its plan to enter the baby formula market in 2010.
The company intends to become a significant player in the market, competing against Materna, owned by Osem-Nestle, and Similac, imported by Neopharm.
The breast milk substitutes market in Israel generates some NIS 500 million ($145 million). The products' prices range between NIS 55-70 ($16-20), and they're usually sold as part of special offers.
Materna holds a market share of 56.9%, Similac – 44.8%, and Optimal – which entered the market in 2008 – holds a share of 1.6% (Market track & consumer panel 2009-2010).
The competition in the baby formula market was badly affected following the Remedia crisis in 2003. Until then, Remedia held a market share of 30%.
Teva is not the only player planning to enter the market. Perrigo Israel has announced that it plans to market PBM's infant formulas in 2012.
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