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Baby-Formula Shortage Deepens, Defying Replenishment Efforts

Out-of-stock levels remain high in U.S. stores: ‘Until those shelves are full, the crisis continues’

Baby-formula shelves this spring in Utah, a state where shortages remain acute.

PHOTO: RICK BOWMER/ASSOCIATED PRESS

By Jesse Newman and Jaewon Kang, WSJ

July 14, 2022 7:00 am ET

U.S. stores are still struggling to stock baby formula despite monthslong efforts by manufacturers and the Biden administration to boost supplies.

Availability of powdered formula products in U.S. stores earlier this month dropped to the lowest level so far this year, with about 30% of products out of stock for the week ended July 3, according to the market-research firm IRI. While availability improved slightly last week, out-of-stock levels remain higher than in recent months, and shortages remain acute in states including Alaska, Utah and Wyoming, IRI data showed.

At the same time, consumers are finding fewer choices of brands, sizes or formats of formula on grocery-store shelves as the variety of available products shrinks. U.S. supermarkets over the four weeks ended June 26 sold an average of 11 different formula products per store weekly, according to IRI, compared with a weekly average of 24 from 2018 to 2021.

Keith Milligan, controller of Piggly Wiggly stores in Georgia and Alabama, said his stores are carrying five of the 30 formula products they typically sell, compared with about 10 in late spring. Store shelves aren’t empty, but have many gaps, Mr. Milligan said, and customers are purchasing what is available.

“It has not improved at all,” Mr. Milligan said of Piggly Wiggly’s formula supply.

Formula supplies have run low partly because of a surge in buying earlier this year that depleted store inventories, said Krishnakumar Davey, president of client engagement at IRI. Mr. Davey said consumers are now working through supplies at home and buying smaller-size containers when they do make purchases.

The baby-formula shortage, sparked by supply-chain problems and the shutdown of a major plant, has for months left parents and caregivers scouring stores and websites for formula to feed their babies. The Covid-19 pandemic caused disruptions beginning in 2020, with problems for some formula makers tied to shipping, raw materials and packaging. In February, Abbott Laboratories, which makes Similac and other brands, halted production at its factory in Sturgis, Mich., and initiated a recall while food-safety regulators investigated a possibly deadly contamination.

Abbott restarted its Michigan plant—which had been responsible for producing roughly one-fifth of U.S. formula—in early June, but stopped less than two weeks later after thunderstorms flooded part of the facility. Abbott said last weekend that it had reopened the plant again on July 1 and restarted production of EleCare formula, made for babies with digestive problems, which will begin shipping in the next few weeks. Abbott is working to resume production of its widely sold formula Similac as soon as possible, the company said.

Abbott has imported tens of millions of pounds of formula from its manufacturing facilities in Ireland and Spain, the company said.

The FDA has been investigating consumer complaints related to four cases of a bacterial infection in infants who consumed formula from Abbott’s Sturgis plant, including two babies who died. Abbott said there is no definitive link between the deaths and its products.

The Biden administration has sought to augment U.S. formula supplies through efforts such as bringing in overseas products to be sold at stores or online and distributed to hospitals.

In May, the White House directed the Defense Department to use its contracts with commercial air-cargo lines to bring formula from other countries into the U.S. The effort, known as Operation Fly Formula, by July 17 will have flown in baby formula on nearly 50 flights from places such as Europe, Australia and Mexico, and transported the equivalent of more than 55 million 8-ounce bottles to the U.S., according to the administration.

U.S. consumers typically purchase enough powdered formula to make about 65 million 8-ounce bottles a week, according to IRI data.

A nationwide baby-formula shortage has some desperate parents driving hours in search of supplies. Dr. Steven Abrams, a pediatrician at the University of Texas at Austin, explains what parents should and shouldn’t do amid the crisis. Photo illustration: Laura Kammermann

A senior Biden administration official said imported formula has served as a critical bridge for consumers until increased U.S. production is expected to begin hitting shelves this month. The administration in May invoked the Defense Production Act to require suppliers to give priority to ingredient shipments to formula makers, which the official said was enabling U.S.-based manufacturers to boost production by as much as 40%.

The official said consumers would likely start to see greater formula supplies hitting the market this month, with retailers already rebuilding inventories following recent surges in demand during which families stocked their pantries.

This year through July 3, sales of powdered baby formula were more than 4% higher by volume compared with a year earlier, according to IRI data. Sales surged 52% during a single week in mid-May when President Biden announced efforts to address the shortage but have declined in recent weeks.

The senior Biden administration official said individual companies are handling distribution of imported formulas to retailers and medical facilities, with some supplies dedicated to medical channels for the neediest infants.

Some food retailers said the supply of baby formula hasn’t changed much in recent weeks, while others said overall inventory has improved but that they are receiving a narrower variety of products. Imports appear to be “a drop in the bucket,” said Piggly Wiggly’s Mr. Milligan, whose stores don’t have access to overseas supplies.

Robert Cleveland, head of infant-formula operations in North America and Europe for Reckitt Benckiser Group PLC, which makes Enfamil, said the company is importing the equivalent of 66 million 8-ounce bottles between now and November, while increasing production in its U.S. facilities.

“We’re shipping as much as we possibly can as fast as we can,” Mr. Cleveland said. “Until those shelves are full, the crisis continues.”

Formula makers such as Reckitt have been adjusting production to increase volumes during the shortage. Reckitt has reduced production of its powdered formula packaged in tubs, favoring products packaged in cardboard boxes because they are faster to manufacture and contain more, Mr. Cleveland said.

Kroger Co. said that it is maintaining a purchase limit of four formula containers per customer, and that it is receiving some products through the White House effort, though overall availability hasn’t much improved.

In the Midwest, Hy-Vee Inc. said that overall supply has increased, but that not all items are available, with availability changing week to week. Tops Markets LLC, based in Williamsville, N.Y., said that challenges remain and that it expects improvements later this month.

In Columbus, Ohio, Marissa Jones said she has seen more formula on store shelves recently, but not the Similac Advance Ready to Feed product she needs for her 6-month-old son. Ms. Jones said that giving her son other formulas has led to vomiting and gassiness.

Ms. Jones said she has traveled to stores farther away from home to find the product, while scouring social media for tips from other parents and storegoers.

“Me and other moms are battling to see who can get formula first,” said Ms. Jones. “It shouldn’t be that way.”

The Baby-Formula Shortage