The extent of the baby formula crisis in the US is unfathomable to most people.
At the start of May, 43% of infant formula was out of stock nationwide. This compares to out of stock fluctuations of 2-8% in the first half of 2021, according to Datasembly.
Stocking challenges emerged in July 2021 and worsened in 2022, when Cronobacter bacteria was found in product from Abbott Nutrition’s Michigan facility.
About half of baby formula purchased in the US is purchased using WIC benefits (Supplemental Nutrition Program from Women, Infants and Children).
Roughly 45% of babies in the US are eligible for WIC. Abbott provides infant formula to almost half of babies receiving WIC benefits and thus has an almost 50% share of the entire market.
Concerns are now emerging about the level of corporate concentration in the supply chain. The top four companies, Abbot, Mead Johnson, Nestlé US and Perrigo, control over 90% of the market
This week, under Biden’s ‘Operation Fly Formula’, UK-based Kendamil sends the first of 2m cans of product to the US. Kendamil, which was already in the process of applying for FDA approval to supply the US market, will be available to US consumers until November this year.
The company is currently investing in dryer expansion, which will more than double current capacity. UK organic milk is antibiotic free since 1 April, which allows Kendamil to meet US organic rules.