London-listed firms join rush to relieve urgent US baby formula shortage

Two London-listed firms join rush to relieve urgent US baby formula shortage after President Joe Biden’s Operation Fly Formula initiative

  • Danone SA and Reckitt have upped efforts to improve supply in the country 
  • Shortages stem from supply chain issues and February factory closure 
  • It follows similar moves from Kendamil, revealed on Tuesday  

Two London-listed firms have joined Kendamil in efforts to help relieve the ongoing baby formula shortage in the US.

Following US President Joe Biden’s calls to help alleviate the crisis via Operation Fly Formula, Danone SA has been doubling shipments to the country while Reckitt has been in talks with regulators in efforts to increase supply, according to reports.

Covid-driven supply chain disruption has hampered domestic formula supply in the US, exacerbating a crisis brought on by the closure of an Abbot Laboratories plant in Michigan over a product recall in February.

US families face empty shelves after Covid-linked supply disruption exacerbated a shortage caused by the closure of an Abbot Laboratories plant in Michigan in February 

Biden launched Operation Fly Formula to get formula to stores as soon as possible.

As US families face a nightmare scenario whereby almost half of the product is out of stock at major retailers, Kendamil joined the Operation Fly Formula initiative on Tuesday.

The brand’s owner, the Cumbria-based family-owned Kendal Nutricare, will ship 100 truckloads of product to the US in the next six months.

Now, Enfamil-maker Reckitt has revealed it is working ‘extremely closely’ with the US Food & Drug Administration on ways to increase supply to the country, including speeding up the approval of products made at a facility in Mexico.

Reckitt’s senior vice president of North America and Europe nutrition Robert Cleveland told Reuters: ‘Accelerating this process, while still ensuring high safety and quality standards, would allow us to significantly increase supply to US consumers.’

The Slough-headquartered firm, which supplies roughly half the US baby formula market, is also working with the US Department of Agriculture to expand the availability of formula under programmes for low-income families.

Meanwhile, Paris-based Danone SA is understood to have been doubling US shipments of Neocate formula, which is for infants allergic to cow’s milk, the firm told Reuters.

Danone’s vice president general counsel of specialised nutrition Magdalena Broseta said: ‘We have increased our supply for Neocate everywhere…the Abbott recall affected 38 markets…it’s not only the US.

‘Our factory in Europe is serving multiple markets…of course, the numbers and the volumes and the US are bigger just because of the size of the market.’

Danone, which has its main listing on Euronext Paris, is the world’s second-biggest baby formula maker after Nestle but has a US market share of just 5 per cent.