US infant formula manufacturer ByHeart has acquired its third facility, tripling production capacity to supply the struggling US market.
ByHeart acquired the site in Iowa from US dairy cooperative DairiConcepts, a subsidiary of Dairy Farmers of America.
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By GlobalDataThe New York-based company said the acquisition gave it “full oversight of our end-to-end manufacturing process”.
It added that it would be “maintaining the facility’s workforce and extending its best-in-class benefits to all existing employees”.
It follows the company’s acquisition earlier this month of Cascadia Nutrition, an FDA-registered packaging and blending facility in Oregon.
It also has a manufacturing plant in Pennsylvania and said the three sites combined have the capacity to produce enough formula for 500,000 infants each year.
ByHeart CEO and co-founder Ron Belldegrun said: “When we started ByHeart seven years ago, we committed to taking the longer path and building from the ground up to serve as an example for how this industry can and should evolve.
“By acquiring these additional facilities, we are not only providing critical product to more families, but also further strengthening the vulnerable infant formula supply chain in this country.”
The US infant formula market was brought to a standstill last year after an Abbott Laboratories factory was forced to close due to product-safety concerns at its Michigan plant, followed by flooding.
Dominated by a few large manufacturers, the US infant formula market experienced shortages and supermarket shelves were left empty after a large-scale product recall.
This week it emerged that Abbott Laboratories was reportedly facing a criminal investigation over the outbreak.
In September 2022, an internal review concluded the FDA made mistakes in the way it responded to the infant-formula crisis. The report pointed to “systemic vulnerabilities” at the FDA.
And in December, a wide-ranging report into the practices, culture and structure of the FDA called for change at the organisation.
ByHeart said its acquisition would “yield a crucial incremental supply of infant formula in the US and ultimately contribute to safeguarding the country from future shortages”.
A spokesperson added to Just Food: “A core reason we built this business was that we recognised that the infant formula industry was in need of change. The industry has been dominated by three players who control 90% of the market. This structure makes the industry uniquely vulnerable because if one company experiences a disruption, it has a significant impact on a national scale. This is what we saw in 2022 during the shortage.
“While existing and new formula brands filed enforcement discretion to temporarily increase their production, we were uniquely positioned to be able to submit a comprehensive dossier to the FDA that leveraged our completed clinical trial.
“We are working with the FDA to secure the necessary approvals for our new facilities to expand our supply chain network. We look forward to being able to serve even more parents and babies starting in Q2 of this year.”
Martin Bates, president of Dairy Farmers of America Ingredient Solutions, said: “Infant formula is one of the most value-added dairy products in the world… We look forward to continuing to work with ByHeart, which we believe has the potential to unlock significant opportunity for our 11,500 family farmers across the country.”
ByHeart also has plans for international expansion, it told Just Food. A spokesperson said: “Today, our customers are located across the US. We look forward to bringing our innovations to more families internationally with the highest quality and reliability as just one of a handful of companies in the world providing FDA-registered, US-made infant formula.”
Read Just Food’s analysis: Why there’s no single formula to fix US infant-milk market
