As America continues to grapple with a shortage of baby formula, a new player is coming on the market.
ByHeart, which only started making baby formula this year, is asking the FDA for permission to run two more manufacturing facilities. Its immediate plans include $30 million to increase manufacturing capacity, including expansion of its existing plan in Pennsylvania.
ByHeart started selling formula online in March, right when the baby formula shortage hit. It had 15 times the expected number of customers and had to establish a waiting list, according to a report in the Wall Street Journal.
The shortage was sparked by the closure of an Abbott Laboratories baby formula plant in Sturgis, Mich., due to allegedly unsanitary conditions. Because the baby formula market is so concentrated, with Abbott and one other company holding about 80% of the market between them, the closure completely disrupted the supply chain for baby formula.
In-store availability of powdered formula in July was at its lowest level since the shortage began, according to IRI statistics quoted in the Journal. Its manufacture is highly regulated, and opening a new processing plant is a slow and difficult process. ByHeart is one of only five companies allowed to process baby formula in the U.S.
Meanwhile, a New Zealand dairy company has been denied permission to sell infant formula in the U.S. The FDA notified a2 Milk Co. that it was “deferring further consideration” of the company’s request to import formula.
The Biden administration has loosened the rules for baby formula imports to help alleviate the shortage, but applications are still on a case-by-case basis. The FDA told Reuters that rejecting applications for importation does not mean that the would-be importers make unsafe product but that “we have found issues that would unlikely be resolved quickly.”
