– Duopoly dangers. Disrupting the infant formula industry is difficult but necessary, founders say, after seeing the devastating effects of a nationwide shortage.

Just four companies make almost 90% of the American supply of formula, which three in four parents rely on to feed their babies, according to the Centers for Disease Control. About 40% of formula is now out of stock nationwide. Abbott, which makes Similac, and Mead Johnson, the maker of Enfamil, account for almost 80% of the market.

The shortage began in February when Abbott recalled products made at a Michigan plant after children who ingested the formula fell ill. Pandemic-related supply chain issues and U.S. regulatory and trade policy (which The Atlantic dives into here) set the stage for this to be more than a run-of-the-mill recall. Abbott now says an internal investigation revealed the plant was unlikely to be the source of the infections and, pending FDA approval, it can restart production. But it will take at least six weeks for new products to hit store shelves, and parents are struggling to feed their children now.

Scott Olson—Getty Images

Formula is a sole source of nutrition for children who consume it and, as a result, the FDA requires producers to meet stringent guidelines. Imports are similarly restricted, with the FDA rejecting products that meet European standards but fail to meet its own, often because of labeling differences.

The infant formula startup Bobbie knows this all too well. The startup first launched in 2019 as a producer of the less-regulated “toddler formula,” only to be shut down by the FDA for failing to meet the standards for infant formula. The company relaunched in 2021 with full FDA approval. When cofounder and CEO Laura Modi first heard about the Abbott recall, she says, “It immediately hit me—we’re going to be dealing with a crisis.”

“When one company the size of Abbott has a recall, it means there’s going to be a huge gap in the market,” she says. “The smaller players are not in a position to ramp up to that level of capacity and meet demand.”

Bobbie’s customers doubled to about 70,000 within two months, before Modi decided three weeks ago to stop accepting new customers and, instead, make sure the company could send formula to its existing subscribers. Bobbie’s product is meant to mimic formulas sold in Europe, often preferred by ingredient-conscious parents, and sells for $24 for a 14-ounce container, a higher price point than drugstore brands.

Courtesy of Bobbie

Modi doesn’t take kindly to suggestions that moms turn to breastfeeding as a replacement amid the shortage. For many parents, it’s “challenging, time consuming, and in many cases physically impossible to breastfeed exclusively,” she says.

Laura Katz, the founder and CEO of the infant nutrition startup Helaina, has been watching the shortage closely. Her company doesn’t yet have a product on the market, but has raised $25 million in funding to use fermentation to develop human milk proteins that it says contain the same health benefits as breast milk. The shortage, to Katz, has validated her food science-based strategy. “I was seeing all this innovation in making a [meat-free] burger bleed,” she says of what inspired her to pursue the idea. “But [feeding infants] is the core of where life starts. This is where we should be putting our time and research and money. And it shouldn’t take a shortage for us to act.”

Try as they might, no single startup can make up for what some deem as the failure of a corporate giant like Abbott. Plus, producing infant formula comes with more responsibility than selling any other kind of food product. “At most businesses, you plan for how a crisis is going to impact your business,” Modi says. “But at that size, you need to crisis plan to protect the safety of the industry. You need to prepare for the country.” The Biden administration took some steps to ease the crisis yesterday, announcing it would allow faster importing and manufacturing of formula. Much attention is on the Special Supplemental Nutrition Program for Women, Infants and Children, or WIC, which accounts for about half of formula purchased in the U.S.

Changing the corporate monopoly moving forward will be critical, founders say. “If we do not diversify the industry, we could find ourselves in this situation again,” Modi says.

Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe

The Broadsheet is Fortune’s newsletter for and about the world’s most powerful women. Today’s edition was curated by Paige McGlauflin. Subscribe here.

ALSO IN THE HEADLINES

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- Opening up. New Zealand Prime Minister Jacinda Ardern announced Thursday that the country will reopen its borders to all international tourists and foreign workers by the end of July. The country, which counts tourism as 5% of its overall economy, has set some of the longest-lasting and strictest foreign travel restrictions. It just opened travel to Australians last month and tourists from a little over 50 countries this month. Associated Press

- Long game. General Motors CEO Mary Barra outlined the automaker's electric vehicle strategy in a New York Times profile. She says that GM, while currently behind competitors like Tesla, will eventually make more affordable EVs that will be available to a larger segment of car buyers. New York Times

- Read the room. Sony Playstation CEO Jim Ryan sent an internal email Thursday asking employees to "respect differences of opinions" on abortion. He then dedicated the next five paragraphs to detailing his two cats' first birthday. Employees weren't pleased, and some women wrote to coworkers that they felt the email disrespects and trivializes their health care rights. Bloomberg

- Solo sport. Tennis star Naomi Osaka is leaving talent manager IMG to form her own agency after contract renewal negotiations fell short. Evolve, Osaka’s newly created management agency, will primarily focus on expanding Osaka’s business investments and will only add a few clients, says cofounder and former IMG agent Stuart Duguid. ESPN 

MOVERS AND SHAKERS: Software as a service company Podium has appointed Mariam Sattar as its first general counsel. Mel Sullivan has been named visual effects studio Framestore’s next CEO. Veeva Systems chief accounting officer Michele O’Connor is joining Checkr’s board of directors. Veriff has appointed former Qualtrics senior vice president of marketing and sales development Caroline Mogford as chief marketing officer. IEX Group has appointed Marija Zivanovic-Smith as its first chief marketing and communications officer. Comedian Amy Schumer joined HER Foundation’s board of directors.

IN CASE YOU MISSED IT

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- Exacerbated symptoms. A new survey has found that a vast majority of women with attention deficit hyperactivity disorder (ADHD) experienced worsening symptoms during peri-menopause and menopause. Over half reported that their ADHD symptoms grew more severe in their 40s and 50s, with the exacerbation of brain fog, memory issues, and feeling overwhelmed making a “life-altering impact." Some said they worried the symptoms would affect their job performance. ADDitude Magazine

- Purpose of protests. Abortion rights protesters aren't necessarily expecting change. Instead, they are using protests as “a physical reminder for the justices of the human cost of their decision,” some protestors told The Atlantic. In Maine, two women wrote chalk messages outside Sen. Susan Collins’s house (Collins made national headlines for calling the police over the messages). "We're sick of being ignored and dismissed and thought that we should try a more creative approach," one chalk-drawer told BuzzFeed.

- Soul without the Cycle. SoulCycle co-founders Elizabeth Cutler and Julie Rice are pursuing their next act: a support group startup called Peoplehood. Volunteers participate in 55-minute “gather” sessions, reminiscent of group therapy. Mental health professionals, however, warn against such groups led by people lacking the professional background and skills needed to guide group therapy sessions (one of Peoplehood’s sessions was led by an actor). New York Times

ON MY RADAR

Waking up from the nap dress The Cut

I went to Lauren Boebert’s restaurant and all I got was a cheeseburger and her lies Mother Jones

Which women do we choose to believe? The Cut

The opposite of abortion isn't motherhood. It's injustice Elle

PARTING WORDS

“Baby Henry’s first earnings call.”

-Bumble founder and CEO Whitney Wolfe Herd, sharing a photo with her newborn son during Bumble’s most recent earnings call.