Even as an Australian company comes to the aid of US parents struggling to procure baby formula for their children, another local founder says a similar shortage could happen in Australia if there is contamination.
Bottle of Nutrition founder Charlotte Hill spoke to SmartCompany about potential US-style baby formula shortages in Australia, particularly given the reliance on the powdered variety.
According to its website, Bottle of Nutrition is a “no nasties infant formula made with Australian grass-fed organic milk”, and the company hopes to offer a home-grown alternative to the powdered formula that dominates the market.
Hill notes that powdered infant formula is not sterile, and as the Centers for Disease Control and Prevention (CDC) has stated, it may contain germs that could spark rare but serious illnesses in infants.
According to the CDC, powdered formula “can be contaminated in homes or in processing facilities that make it”. At home, Cronobacter germs can get on formula lids or scoops if placed on contaminated surfaces, or if contaminated water or contaminated bottles are used. Salmonella is also a leading cause of concern.
“If one contract manufacturer [in Australia] goes down [for similar reasons], you could have a supply chain issue,” Hill said.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
“Australia is not immune to it.”
The baby formula shortage in the US was sparked by the closure of a major Abbott Laboratories manufacturing facility, following a recall of product. The recall was caused by a federal investigation into bacterial infections four babies contracted, leading to the deaths of two infants.
While Abbott claims there is no link between the illnesses and the formula, the company eventually closed its plant in Michigan. The US market is dominated by four companies, which hold 90% of the market share. Of this Abbott holds at least half the market, and the closure of its factory led to a shortage in a market already strained by COVID-related supply chain issues.
Hill says that inconsistencies in guidance around baby formula reconstitution can lead to a potential risk of contamination, with consumer research demonstrating negative attitudes towards reconstitution advice. The key, Hill adds, is safe preparation, with products like liquid formula reducing risks because it is already sterile.
These alternatives, however, are inaccessible commercially in Australia, with no liquid infant formula manufacturers operating in the country. It’s a gap Hill hopes to bridge with her startup Bottle of Nutrition, providing a safe alternative to powdered baby formula to the Australian market in the next 12 months.
Recalls of Abbott’s products, notably Similac, EleCare and Alimentum have also affected Australia as recently as February this year, in addition to shortages caused by pandemic related panic buying and supply chain issues. Australia also exports infant food, with its primary markets based in the east and southeast Asia.
Other companies have managed to stay in strong production however, with Bubs Australia recently announcing that its Australian operations will not be affected by its increased supply to the US market.
“Due to our strong control of our supply chain security and our wholly owned production facility, we have already manufactured what is required and have been able to take steps to immediately increase the level of our future production, as needed,” Bubs said.
With the potential for a US-style domino effect, Australian manufacturers face the challenge of meeting local and international demand while working within supply chain constraints and disruptions.
Given Australia’s reliance on powdered formula milk for infants innovations like liquid formula could help prevent future shortages.