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America needs more baby formula. Here’s why it’s so hard to make it – Pittsburgh, Pennsylvania

Pittsburgh, Pennsylvania 2022-05-23 14:45:00 –

Industry insiders have long been afraid of this situation: American parents are desperately seeking a proper supply of infant formula during the nationwide shortage of infant formula. Related video above: Doctors advise parents in a national milk powder shortage reveals that milk powder shortages are dominated by inflexible industries Most of formula production in the United States By only 3-4 major players who own. By May, the store had powdered milk, as the Abbott Nutrition plant in Sturgis, Michigan did in February after bacterial contamination, when one plant suddenly closed. 40% of products are out of stock, continuous supply chain slowdown and formula recall. According to market research firm Euromonitor International, Abbott, Reckitt Benkiser and Nestle manufacture the top five milk formula brands in the United States (Enfamil, Similac, Gerber, PediaSure and Isomil). In such an important industry? There are too many barriers to entry. High Barriers to Entry Brothers Ron Verdegrun and Mia Fant have spent more than five years advancing in a highly focused formula market. They are co-founders of New York-based By Heart. Organic grass-grown milk that does not contain ingredients used in well-known brand formulas that are no longer popular with health-conscious parents, such as corn syrup, maltodextrin (a starch additive in foods), and soybeans. Consumer formula brand or palm oil to use. Getting their products to market has never been so easy. Prescribing Verdegran and Fant was a long and difficult process that had to meet all federal nutritional requirements. After looking for a manufacturing partner for two years, they decided to acquire a facility in the United States and manufacture it in-house. After that, we built a supply chain to directly procure all raw materials to ensure quality and safety, and conducted more than 6 rigorous clinical trials. -One month period with 300 babies to test the safety and efficacy of infant formula. Bringing new milk powder to market is very expensive. According to Fant, the startup has raised more than $ 190 million in market capitalization from investors such as Polaris Partners, D1 Capital Partners and Bellco Capital. The nutrition of the source should be filled with the highest rigor. ” “But for the benefit of babies and their parents, new brands need more incentives to face the challenge. More support for the production and product innovation of infant formulas at the state and federal levels. Needed. “Video below: Obtaining fact: Lack of milk powder According to Belldegrun, ByHeart is the first new infant formula manufacturer registered with the FDA in over 15 years. “We own the manufacturing, source the raw materials directly and sell them directly to the consumer,” he said. ByHeart launched its brand in late March as the country’s milk shortage worsens. ByHeart’s percentage of new customers has skyrocketed to nearly 15 times its annual forecast. ByHeart temporarily suspended new subscribers and increased production at the facility 24 hours a day, 7 days a week. It was acquired by Danon 10 years later. Visram began working on the brand’s organic infant formula in 2012. HappyBabyOrganic Infant Formula hit the shelves in 2017. Danone’s Happy Family Organics brand left in 2017 to launch its second company, Healthy Baby, in 2020. The most aggressive timeline to market is 3-5 years from recipe development to supply chain development, clinical trials, FDA reviews, and finally production. It was already approved for sale in the United States, so there was no need to conduct clinical trials of the new formulation. Still, it was a multi-year process to secure enough line ti. I’m in the facility. ” “The hurdles for innovation in this category are very high, and this current shortage is a call for awakening, with a regulatory framework that supports the path to innovation while maintaining the highest quality and safety for babies. It is necessary. ”Food scientist and entrepreneur Laura Katz is developing infant formula that uses precision fermentation to reproduce the human protein in breast milk. Katz, who launched her formula startup Helaina in 2019, aims to produce formulas with health characteristics that were previously only available in breast milk. She began to study her ideas. She is now 29 years old and she knows that Katz is approaching the finish line, but she can still take more than a year. She has raised $ 25 million so far from Siam Capital, Spark Capital and others to start her production. she said. “But continuous innovation gives consumers more access to choices.”

Industry insiders have long been afraid of this situation. American parents are desperately seeking an appropriate supply of infant formula in the face of a national shortage.

Related video above: Doctors give advice to parents in the nationwide shortage of infant formula

The shortage of formulas has exposed an inflexible industry dominated by just three or four large companies that own most of the formula production in the United States. There is room for a bit of shaking when one plant suddenly closes, as the Abbott Nutrition plant in Sturgis, Michigan did after bacterial contamination in February.

By May, stores reported that 40% of infant formula products were out of stock, exacerbated by ongoing supply chain slowdowns and milk powder recalls.

According to market research firm Euromonitor International, Abbott, Reckitt Benkiser and Nestle manufacture the top five formula brands in the United States (Enfamil, Similac, Gerber, PediaSure and Isomil).

Why didn’t new companies break through in such an important industry? There are too many barriers to entry.

Barriers to entry are high

Brothers Ron Belldegrun and Mia Funt have spent more than five years moving forward in the highly concentrated milk formula market.

They are co-founders of New York-based By Heart. This is a direct-to-consumer milk formula that uses organically grown milk that does not contain the ingredients used in formulas from well-known brands that are no longer popular with health-conscious parents. Corn syrup, maltodextrin (a starchy additive in foods), soybeans or palm oil, etc.

Getting their products to market has never been so easy. Prescribing Verdegran and Fant was a long and difficult process that had to meet all federal nutritional requirements. After spending two years looking for a manufacturing partner, they decided to acquire a facility in the United States and manufacture it in-house.

Next, we will build a supply chain that directly procures all ingredients to ensure quality and safety, and conduct rigorous clinical trials for 300 infants over 6 months to ensure the safety of infant formula. Tested for effectiveness.

Bringing a new prescription to market is very expensive. According to Fant, the startup has raised more than $ 190 million in market capitalization from investors such as Polaris Partners, D1 Capital Partners and Bellco Capital.

“Baby formula is properly and the most regulated food in the world. The path to providing the only source of nutrition for babies should be met with the highest rigor,” says Verdegran. .. “But for the benefit of babies and their parents, new brands need more incentives to face the challenge. More support for the production and product innovation of infant formulas at the state and federal levels. Is required.”

Video below: Know the facts: Insufficient milk powder

Verdegran said By Heart is the first new infant formula to be registered with the FDA for over 15 years. “We own the manufacturing, procure the raw materials directly and sell them directly to the consumer,” he said.

ByHeart launched its brand in late March as the country’s milk powder shortage worsens.

In just eight weeks after launch, Verdegran said ByHeart’s percentage of new customers has skyrocketed to about 15 times its annual forecast. ByHeart temporarily suspended new subscribers and increased production at the facility 24 hours a day, 7 days a week.

“Wake up call”

Shazi Visram founded Happy Family Organics Baby Food Company at Kitchen Tables in 2003.

It quickly grew into a major organic baby food brand and was acquired by Danone 10 years later. Visram began working on the brand’s organic formula for infants in 2012. HappyBabyOrganic Infant Formula hit the shelves in 2017.

“It’s very difficult to bring a new brand formula to market,” said Visram, CEO of Happy Family Organics in Danone, but resigned in 2017 to establish a second company, Healthy Baby, in 2020. Says.

“The regulatory process for putting products on the shelves is very strict, very slow and capital intensive. If you start from scratch, the most aggressive timeline to the market is from recipe development to supply chain development 3 ~ 5 years, then clinical trials, FDA reviews, and finally production. “

Happy Family uses existing suppliers to represcribe existing infant formulas that are already approved for sale in the United States using probiotics and organic ingredients, resulting in clinical trials of new formulas. Did not have to be carried out.

“Still, getting enough line time at the facility was a multi-year process,” Visram said. “The hurdles for innovation in this category are very high, and this current shortage is a call for awakening, with a regulatory framework that supports the path to innovation while maintaining the highest quality and safety for babies. Is required.”

Laura Katz’s, a food scientist and entrepreneur, is developing infant formula using precision fermentation to recreate the human protein in breast milk.

Katz, who launched formula startup Helaina in 2019, said its purpose is to produce formulas with health characteristics that were previously only available in breast milk.

She was 23 when she first began studying her thoughts. She is now 29 years old and Katz is approaching the finish line, but she knows it can still take a year or more. She has raised $ 25 million so far from Siam Capital, Spark Capital and others to start her production.

“Infant formula is a very sensitive and important product, which is why establishing safety through testing and clinical trials is a very long way to go,” she said. “But continuous innovation gives consumers more access to choices.”

America needs more baby formula. Here’s why it’s so hard to make it Source link America needs more baby formula. Here’s why it’s so hard to make it

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