After Prior Shortage, U.S. Infant Formula Production Poised for Growth

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

After a crisis shortage of U.S. infant formula that started in 2022 and lasted well into 2023, U.S. formula producers are preparing to boost production through expansions and additions at existing plants.

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The Crisis

The great U.S infant formula shortage struck in 2022, heralded by the shutdown of Abbott Nutrition's plant in Sturgis, Michigan, because of bacterial contamination. The closure prompted the recall of various products in the company's infant formula lines, including Alimentum, EleCare and its blockbuster Similac, which continues to hold a leading position in the U.S., although Abbott reportedly lost some of its market share after the recall. The formula shortage peaked in May 2022, when out-of-the-stock rates approached 70%, a level they hovered around until July of that year. The shortage was still present but easing in 2023.

Anticipated Construction

The U.S. has three big formula players: Abbott, Reckitt Benckiser (via its Mead Johnson Nutrition subsidiary, which manufactures blockbuster brand Enfamil), and food giant Nestle's Gerber label, which accounts for a much smaller piece of the U.S pie.

Industrial Info Resources data show more than $890 million worth of capital and maintenance projects on the books for U.S. infant formula plants.

Mead Johnson reportedly boosted production of its Enfamil line following the Abbott formula recall, and the company now accounts for the biggest U.S. formula project on the books, the expansion of its plant in Zeeland, Michigan. The expansion requires several hundred million dollars' worth of investment and will add more than 600,000 square feet of new production space to the plant.

Two smaller formula production line additions are on the books for Ohio, coming from players Bobbie Baby Incorporated and PBM Covington LLC. In 2023, Bobbie Baby acquired the Nature's One formula brand, which manufactures the Baby's Only Organic line, which claims to be the U.S.' first organic formula and which picked up market share in the wake of the Abbott recall. The acquisition gave Bobbie, which previously relied on copackers, its own manufacturing facility in Heath, Ohio, which is now under consideration for a new production line.

PBM Covington is a copacker, manufacturing formulas for private labels and store brands. The company is planning extensive work at its Covington, Ohio, plant, including a production line addition and equipment replacements to the facility's baghouse dust collection system and replacing the mixing tanks.

While Mead Johnson is preparing to break ground on its large Zeeland, Michigan, construction project this year, the two Ohio projects are not expected to begin for another two to three years.

Planned Maintenance

In addition to capital projects, Industrial Info also is tracking multiple planned maintenance events at U.S. formula plants for this year and next, including at the Zeeland plant and the Abbott's Sturgis facility that instigated the formula shortage.

Key Takeaways

• U.S. infant formula manufactures are preparing to increase capacity through plant additions.
• The largest anticipated U.S. formula construction project comes from Mead Johnson for an upgrade of its Zeeland, Michigan, requiring several hundred millions worth of investment.
• Smaller players PBM Covington and Bobbie Baby Incorporated are anticipating production line additions, although these are probably a few years out.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).