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Nestlé is flying in emergency baby formula to the U.S. and running factories flat out to help ease critical shortage

May 17, 2022, 3:58 PM UTC

Nestlé, Europe’s most valuable company, is ramping up production of hypoallergenic (HA) baby formula in an effort to serve the most pressing needs of infants amid an acute shortage in the United States.

In a statement sent to Fortune, the company said it “significantly increased” production of Gerber Good Start Extensive HA from the Netherlands and Alfamino from Switzerland, both used to treat babies that respond allergically to sugars like lactose.

“Both products were already being imported, but we moved shipments up and rushed via air to help fill immediate needs,” the Swiss food group said on Tuesday, confirming a report in Reuters.

“We prioritized these products because they serve a critical medical purpose as they are for babies with cow’s milk protein allergies.“

It is believed that as much as 5% of children aged three and below suffer from such an allergy and in rare cases of so-called immunoglobulin E (IgE) mediated allergies, it can be life threatening. Cow’s milk protein allergies are not to be confused with an intolerance for lactose, which is an inability to catalyze a specific dairy sugar. 

Nestlé declined to be more specific on the size of increased shipments, some of which were being sent to hospitals directly, but the group said it was running formula factories flat out already.

Nevertheless it said it was just a “small player” in the U.S. infant formula market.

A recall by dominant provider Abbott Labs along with persistent supply-chain issues and a highly concentrated market combined to form what one consumer goods expert calls a “perfect storm”.

The shortage is affecting the supply of essential formula to millions of babies across the U.S. and it could last for months. 

The most recent statistics suggest Abbott, the manufacturer of Similac, had a 43% share of the market, while Mead Johnson, maker of Enfamil, controlled another 40%. By comparison, Nestlé was a distant third with just 15%

Since the mid-1990s, these three firms have been the sole infant formula manufacturers awarded government “WIC” contracts that target lower-income mothers often unable to breastfeed their children due to work. 

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