Did you know that modern-day baby formula is not that modern after all? This product was the brainchild of Justus Von Liebig, produced for the first time in 1865. This was also a century when women from the elite class employed nurses to feed their babies.
At the time, the liquid or powdered formula was not that popular. It was viewed as something artificial and nutritionally inferior to a mother’s milk. Over the next century, improved versions of the original baby formula were manufactured.
Today, several companies dominate the baby formula market. This market is growing at a rate of 3.3%, expected to become $8456 million by 2033. Strange as it may sound, despite such growth projections, the market is chaotic. In this article, we will discuss four reasons for the disarray in this business vertical.
Supply Chain Disruptions
In 2022, a major baby formula fiasco took place. Abbott Laboratories stopped producing its flagship formula product due to bacterial contamination. The bacteria, cronobacter sakazakii, is known to cause severe infections among infants, often fatal.
Some of the health risks involved include meningitis, sepsis, brain abscesses, and cyst formation. As a result, the voluntary recall of bovine milk formula created an acute shortage. What started in the summer of 2022 is still somewhat ongoing.
Parents have had to bear great pains to feed their babies during this period. This is especially true of those belonging to low-income families. There was a mad rush where parents hastily moved from one store to the other only to find all shelves empty.
According to the Federal Trade Commission, some suppliers started capitalizing on the situation. They began selling available baby formula products for exorbitant prices. On the other hand, parents were stockpiling in case they were to run out of formula soon. Even today, supply chain issues are present, albeit not as bad as two years ago.
Stockpiling
Though mentioned previously, this reason needs a separate mention. Since the first great shortage period, baby formula prices have soared. Parents have had to change their spending habits just to sustain their infants.
By May 2022, over 20% of baby formula was out of stock. Naturally, this generated such panic and fear that prompted stockpiling. Families were willing to spend more and store more, even if they ran out of pantry space.
People even started forming online networks to support each other with a steady supply of baby formula. Since that time, parents have not had a sense of normalcy in this area. The fear lingers still and they are tempted to grab as many bottles as they can.
Industry Concentration and Health Risks
The baby formula market is dominated by a few players. These include Nestle, Abbott Laboratories, Mead Johnson, and Danone. Since these four control the supply of most of America’s infant formula, any disruption in one’s supply chain or product recall has a significant impact.
Moreover, another issue is that of deceptive marketing and health complications. Formula manufacturers of Similac and Enfamil have been criticized for producing products that injure babies, essentially premature ones.
According to TorHoerman Law, infants are developing necrotizing enterocolitis or NEC, a deadly gastrointestinal condition that leads to a perforation in the intestines. Harmful bacteria are easily able to pass through the bloodstream and cause infection. In nearly 50% of severe cases, the baby dies.
Parents of affected infants have filed the Similac and Enfamil lawsuit for fair compensation. The manufacturers were aware of the risks but failed to issue proper warnings. It is being advised that babies should be fed with milk from reliable human milk banks instead of commercial baby formula.
Tight Regulations
This may sound ironic but despite health risks, the baby formula market is highly regulated. This is done because it is the only source of nutrition for vulnerable infants for their continued growth and development.
The Food and Drug Administration (FDA) requires formula manufacturers or suppliers to submit a detailed report on the nutrients present, ingredients, and quality control measures. The agency then inspects each manufacturing facility and its samples.
The product’s nutritional content and packaging must adhere to FDA’s guidelines. Only then is it allowed to enter the market. Since the criteria weren’t being met, baby formula products were not reaching the shelves lined by anticipating customers.
Today, looking closely will show us that the baby formula manufacturing industry is more consolidated than ever. The shortages are not completely gone and remain to be a concern. Any country is only as strong as its ability to feed its people, mainly the most vulnerable. If the disarray does not end, there is no telling what the future will hold.