When Megan Evans and her husband first heard about the potential shortage of infant formula in May, the young Missouri couple shopped online and made what they thought was a fairly sizable purchase to make sure that their then three-month-old would have plenty of supply. But since that time, “it’s been a mess,” Evans told Agri-Pulse, noting that prices have also increased. She’s constantly looking online for supplies or driving — sometimes 1-3 hours to larger cities — when they can find the Enfamil product they’d like for their child.
“We’re OK for now, but I’m still scared that we might not have supply in the future,” Evans added.
She’s not alone. Millions of families and their friends are on the hunt for infant formula wherever they can find products. Those living in less densely populated rural areas like Megan seem to be bearing much of the pain.
Industry sources tell Agri-Pulse that more product is on the way, but it’s complicated and there’s some frustration over the process and the time lag.
Keep in mind: Several different factors contributed to the shortage. The current infant formula crisis started during COVID-related supply chain disruptions but in February 2022, Abbott initiated a voluntary recall of its infant formula products and closed its plant in Sturgis, Michigan, following reports of bacterial contamination at its site. At least two infants died, but the Food and Drug Administration was neither able to establish nor rule out a direct link between the deaths and the formula produced at the plant.
With the plant shut down, additional supply chain disruptions and shortages might have been expected, considering Abbott’s dominant market share. Three manufacturers held 82% of the U.S. infant milk formula market in 2021 including Abbott (36%), Reckitt Benckiser (36%) and Nestle (10%), according to Euromonitor.
The Abbott plant was shut down for four months to address the problem and reopened in May. But just two weeks later, the plant closed again after severe weather caused flooding inside the plant.
During an earnings call last month, Abbott Chairman and CEO Robert Ford said the firm resumed partial production at that facility in July, starting with specialty formula EleCare and metabolic formulas.
“We are in the final phases of testing to restart Similac production. As a reminder, once we begin production, it takes several weeks for product to reach store shelves,” Ford said, while noting that “we will do everything possible to accelerate delivery of product to retailers, so families can have access to the formula they need as soon as possible.”
Tracking precisely what’s available and where can be difficult and varies by region. Nationally, the out-of-stock percentage for powdered infant formula was 30.9% for the week ending July 10, before showing a slight improvement to 27.3% for the week ending July 31, according to Information Resources Inc., (IRI) a Chicago-based market research firm.
As parents struggled to find and pay for formula in recent months, President Joe Biden invoked the Defense Production Act in mid-May to speed production of infant formula and authorized flights to import supplies from overseas
Shortly afterward, FDA Commissioner Robert Califf told consumers his agency is “leaving no stone unturned to further increase the availability of infant formula. We are doing everything in our power as part of the all-of-government efforts to ensure there’s adequate product available wherever and whenever parents and caregivers need it.”
Also that month, the agency announced plans to temporarily exercise enforcement discretion so both domestic and international companies that might not normally be approved to sell infant formula in the U.S. can be enabled to do so and help fill the void. The U.S. retail market for IMF is estimated to be the equivalent of about 400 million 8-ounce bottles each month, according to Euromonitor.
As of Aug. 11, 13 applications have received enforcement discretion for regular infant formula along with six applications for specialty formulas for infants with special medical needs. The most recent approval on Aug. 10 was for Reckitt Nutrition/Mead Johnson Nutrition in Mexico, to produce base powder for PurAmino Hypoallergenic infant formula. The company offered an initial shipment of 331,000 pounds of base powder which will be used to produce about 469,000 cans (about 6 million full-size, 8-ounce bottles).
Thus far, FDA says enforcement discretion will result in the production of an estimated 18.9 million cans, the equivalent of 403 million 8-ounce bottles, over the coming months.
Globally, there is plenty of formula still available and a willingness among major ingredient suppliers and manufacturers to solve the shortage problem more quickly, according to sources interviewed by Agri-Pulse. But there are concerns about the pace of approvals for enforcement discretion.
“We’ve had companies that have gone over 30 days after submitting applications and heard nothing,” Michael Dykes, president and CEO of the International Dairy Foods Association, said in an interview with Agri-Pulse last week.
IDFA, which represents almost all of the major ingredient suppliers and manufacturers, has been meeting with FDA staff on a weekly basis, trying to find solutions. Dykes says part of the challenge is helping everyone understand that “you just can’t start making the infant formula tomorrow and get it distributed in the U.S.
For example, New Zealand-based a2 Milk Company, which already has U.S. operations, submitted an application on May 27, committing to provide 1 million tins of formula. The company has yet to be approved.
“It’s a highly-specialized, highly-regulated product to make, but we have members who make it and sell it all around the world,” Dykes said. “These folks are stepping up to the plate. They genuinely want to help and explore the business opportunities.”
Dykes said before companies applied to FDA, they would need to make sure they could work it into existing production schedules, plus have all the ingredients and logistics to move the final product to store shelves.
“If you aren't selling infant formula here already, you don't have that. And if you're selling some other dairy products here, it may not be the right distribution system for infant formula,” he adds.
IDFA has encouraged FDA to bring more transparency to the firms applying. For example, they’ve asked the agency to tier the application process, so applicants can understand if they are still being considered or not going to make the cut. And if they are being considered, assign an FDA person to keep them informed about the process.
Dykes said this would be a way for companies to know how much time and expense to expend and what the timeline might be to prepare to deliver the quantity of infant formula they promised in their application.
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Instead, this week the agency issued letters to some applicants, indicating that they were deferring further consideration of their requests for FDA enforcement discretion, and approved one additional applicant, Reckitt Nutrition/Mead Johnson Nutrition out of Mexico for specialty formula.
Asked why more applicants had not received enforcement discretion and been allowed to move more quickly to fill some of the gaps in U.S. infant formula production, an FDA spokesperson said the agency generally does not provide information about pending infant formula notifications or enforcement discretion requests.
“However, we support the addition of infant formulas to increase the resiliency of the U.S. market,” the spokesperson noted.
FDA confirmed that it has sent letters to some — not all — firms notifying them that the agency is deferring further review of their enforcement discretion request at this time. The letters include a general list of issues the agency has identified with these requests that have led the FDA to defer further consideration of these specific requests.
“For firms that received letters, they do not mean that the infant formulas are unsafe; rather, they indicate that we have found issues that would be unlikely to be resolved quickly. However, these issues might be able to be resolved through FDA’s routine infant formula submission process,” a spokesperson said in an email.
“Given the nature of the infant formula supply challenges and the need to quickly address the shortage, the FDA is deferring consideration of these specific requests at this time and prioritizing others for review.”
One of the firms receiving a notice of deferral was a2 Milk Company. Blake Waltrip, U.S. CEO of the a2 MC said his firm believes that “the infant milk formula crisis has not been solved with significant retail out-of-stock issues continuing across the country.
“The a2 Milk Company stands ready to support US parents and caregivers during this critical shortage with approximately 1 million tins (27 million 8oz bottle serves) through to the end of the November discretionary period and has one of the largest capacities in the industry to provide long term supply.”
For its part, FDA says the agency is doing everything it can to move quickly and consider applications.
“The FDA continues to work around the clock to address current supply challenges, including reviewing a number of requests from manufacturers for enforcement discretion, as quickly as possible,” noted a spokesperson in a statement. “This includes a review of information pertaining to nutritional adequacy and safety, including microbiological testing, labeling, and additional information about facility production and inspection history. The FDA will continue to use this information to consider on a case-by-case basis opportunities to exercise enforcement discretion to increase the supply of infant formula on the U.S. market.”
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