Danone to export specialty infant formula to supply-strapped US
01 Aug 2022 --- As the US continues to grapple with infant formula shortages, the Food and Drug Administration (FDA) announces that Netherlands-based Danone will be shipping products from the EU to combat the supply issues.
Specifically, Danone’s Nutricia will be exporting specialty formula – extensively hydrolyzed formula – starting in August. A total of 24,000 cans (about 24,000 pounds or nearly 327,000 full-size, 8-ounce bottles) of Pepticate Syneo will be shipped this month.
Meanwhile, 50,000 cans (about 44 thousand pounds or over 605,000 full-size, 8-ounce bottles) of the company’s Pepticate will be shipped in September.
“The FDA remains in further discussions with manufacturers and suppliers regarding additional supply to ensure there’s adequate infant formula available wherever and whenever parents and caregivers need it,” the agency underscores.
Last week, Danone’s half year financials revealed the company’s “robust results” were fueled by formula exports and price increases.
Companies are reaping profits amid the shortages. Bolstering supply
Pepticate and Pepticate Syneo will be available through medical and retail channels, including national and regional home health care state and government programs such as USDA’s Special Supplemental Nutrition Program for Women, Infants and Children (WIC), MMCAP (state GPO, Medi-Cal and Tri-Care as well as several wholesale outlets and pharmacies).
“The agency is leveraging a number of flexibilities to bolster the supply of products that serve as the sole source of nutrition for many infants while ensuring the infant formula can be used safely and provides adequate nutrition,” highlights the FDA.
The US has been facing an acute shortage of infant formula for months, with parents scrambling to find products to feed their children. A combination of supply chain issues and the war in Ukraine was further accentuated after Abbott Nutrition – one of the country’s biggest producers – shut down, following product recalls, after infant illnesses and death investigations.
Though an FDA inspection found the company’s plant in Sturgis, Michigan had five environmental subsamples positive for Cronobacter sakazakii, Abbott Nutrition received a green light to resume production in a bid to combat the shortages.
Despite the findings, Abbott’s sales reached US$11.3 billion in its second quarter this year, marking a 14.3% organic sales growth. Its organic international and domestic sales in its nutrition segment suffered a 4.5% loss compared to the same period last year.
Profits and market developments
In a bid to increase supply, US President Joe Biden in May invoked the Defense Production Act to accelerate infant formula production and permit flights to import supplies from other countries.
The White House announced “Operation Fly Formula” where the Department of Defense can employ commercial planes to fly formula supplies that meet federal criteria from overseas to the US. https://www.nutritioninsight.com/news/us-president-biden-invokes-defense-production-act-amid-choking-infant-formula-shortage.html
Last week, Biden also signed the Formula Act into law after passing the US Congress and Senate, suspending tariffs on imported infant formulas and making them more affordable for consumers.
Companies from across the world have since been involved in exporting infant formula to the US, including Bubs Australia. Nestlé, which has also been exporting products to the US, saw a sales surge as a result.
By Andria Kades
