Mead Johnson Nutrition helps babies grow up healthy. The company specializes in developing and manufacturing nutritional products for infants and children. It distributes its 70-plus products to more than 50 countries. Mead Johnson's Enfamil line of infant formulas is its most visible consumer brand. Other products in its portfolio include Sustagen and Lactum -- two fortified beverages for children -- and nutritional supplements marketed under the Poly-Vi-Sol name. Besides babies, the company markets nutritional supplements for use by pregnant and breastfeeding moms. Mead Johnson Nutrition also produces specialty nutritional products for premature infants and infants with metabolic and digestive disorders.
The company maintains manufacturing facilities in Asia, Europe, and North America, but also uses third-party manufacturers for some of its supplies. Mead Johnson conducts its research and development activities from facilities in Mexico, the Netherlands, Thailand, and the US.
Mead Johnson operates its business through two segments: Asia/Latin America (with 66% of sales) and North America/Europe (34%). As part of its business, Mead Johnson owns or licenses more than 40 active US patents and another nearly 195 active non-US patents. It boasts more than 70 pending US patent applications and some 710 pending non-US patent applications.
Mead Johnson is focused on growing its core business by building brand loyalty and by developing new products. Because the markets for its products in North American and Western Europe are fairly mature (and birth rates in those regions are flat or falling), the company is finding its fastest growth in Asia and Latin America. It also plans to expand into regions such as Eastern Europe and the Middle East where the markets are still emerging.
To this end, Mead Johnson maintains a 50-50 joint venture with Persian Gulf food and drink maker Almarai, one of the world's largest dairy foods company, to make and sell pediatric nutrition products in the Middle East (specifically in Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the UAE). Through the partnership, inked in 2010, Mead Johnson oversees the manufacture of the products, such as Enfamil, while Almarai manages marketing, distribution, and the dairy supply. The nutrition firm moved to solidify its position in Latin America in 2012 when it formed a joint venture with Argentinean dairy producer SanCor. Mead Johnson will own 80% of the venture, which will produce and sell infant and child nutrition products in Argentina and other countries in the Southern Cone region of South America. It's also investing some $325 million to build a new manufacturing and technology center in Singapore to serve its fast-growing Asia region.
Thanks to growth among its Asia/Latin America and North America/Europe segments, Mead Johnson logged revenue increases of 17% in 2011 as compared to 2010. The company offset decreases due to declining birth rates and lower consumption in the North America/Europe segment by boosting its investments in advertising and promotion, adding to its sales force, focusing on product innovation, and extending the reach of its business geographically. Net income rose 13% during the same reporting period, spurred by revenue increases and tempered with a rise in operating expenses.
Sales and Marketing
The company markets its products to health care professionals and parents regionally in North America, Europe, Asia, and Latin America, complying with the International Code of Marketing of Breast-milk Substitutes in its advertising. It spends its ad dollars on TV and other consumer media. Where permissible by regulation, Mead Johnson promotes its products through product trial and education to health care workers and consumers. The company's products are sold to wholesalers and retailers worldwide. Primary customers for Mead Johnson include global retailer Wal-Mart Stores (12%) and supply chain logistics company DKSH International (14%).
Mead Johnson was a unit of Bristol-Myers Squibb (BMS) before going public in 2009 through a $720 million IPO. BMS gradually reduced its ownership, then sold off the remainder of its shares in 2009 to focus on its biopharmaceutical operations. Mead Johnson used the IPO proceeds, in part, to pay off unspecified financial obligations to BMS. – less