Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive-Danone ramps up U.S. baby formula shipments to address shortage

Stock Markets May 20, 2022 08:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Shelves for baby and toddler formula are partially empty, as the quantity a shopper can buy is limited amid continuing nationwide shortages, at a grocery store in Medford, Massachusetts, U.S., May 17, 2022. REUTERS/Brian Snyder/File Photo

By Richa Naidu and Lisa Baertlein

LONDON/LOS ANGELES (Reuters) - Aptamil maker Danone SA (OTC:DANOY) has stepped up shipments of infant formula from Europe to address a shortage in the United States, according to U.S customs data and an analysis of ocean cargo data by shipping consultancy Ocean Audit for Reuters.

Danone, the world's second biggest baby milk formula maker but a relatively small player in the United States, shipped much of the product from Britain and the Netherlands by ocean freight through its Nutricia North America arm.

This followed a Feb. 17 recall by top manufacturer Abbott Laboratories (NYSE:ABT) which recalled dozens of types of its Similac, Alimentum and EleCare formulas, creating one of the most urgent food shortages in recent history for U.S. families.

Between January and May, Danone's Nutricia division more than tripled its ocean imports to North America, and more than 90% was delivered to the United States, said Steve Ferreira, CEO of Ocean Audit, which analysed the data exclusively for Reuters.

"We understand how important it is for families to access these specialized formulas which is why our absolute priority has been to increase production and supply of these medical formulas to serve the most vulnerable babies since the shortages arose in February," a Danone spokesperson told Reuters.

On May 10, three days before U.S. President Joe Biden took to the airwaves with his plan for addressing the baby formula shortage, the Independent Quest sailed into the Port of Philadelphia to deliver 42,000 cans of Danone formula.

It was rapidly dispatched to Jeffersonville, Indiana to be distributed to retailers that for weeks had to limit how much infant formula mothers could buy.

"If it comes into the port on a Monday, I'm almost certain that they would have it out by Tuesday or Wednesday because the product's so hot," Ferreira said.

Ferreira said his data showed that from Jan. 1 to May 1 2021 Danone Nutricia sent nearly 770,000 cans of infant formula, filling roughly 100 cargo containers, to the North America. During the comparable period this year, the number skyrocketed to more than 2.4 million cans, he said.

Of that product, 93% went to East Coast U.S. ports, while 7% went to ocean gateways in Mexico, Ferreira said.

Separate U.S. customs data analyzed by Reuters shows that on Feb. 22, five days after the Abbott recall, nearly 38,000 kilograms (83,775.66 pounds) of Danone Nutricia cargo arrived in the United States from Britain and the Netherlands.

The customs data did not specify the exact nature of the cargo, but described some of it as "clinical nutrition powder" and "medical nutrition". On March 9, roughly 34,000 kilograms more arrived, followed by nearly 30,000 kilograms on March 30.

Reuters could not obtain records confirming Danone's airborne baby formula imports.

Danone's shares were up 1.6% in early afternooon trade on Paris' blue-chip CAC 40 index.

FORMULA SHAKE-UP

The deliveries show how the suspension of Abbott's factory and shortages are shaking up the market, giving some players an opportunity to get a share of the lucrative $4.8 billion U.S. baby formula industry.

"Abbott looks to have lost around 2000 basis points of share, going from 40% share to 20%," Barclays (LON:BARC) analyst Warren Ackerman estimated on Friday referring to the U.S. market.

Reckitt Benckiser, the long-time No.2 player in the United States, told Reuters on Tuesday that it now accounts for more than 50% of total baby formula supply in the country.

The British company said it supplied just over a third of U.S. baby formula prior to Abbott's recall.

It has boosted Enfamil production by about 30% and is making more frequent deliveries to stores as it looks to counter a nationwide shortage in U.S. supermarkets.

Exclusive-Danone ramps up U.S. baby formula shipments to address shortage
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Alan Rice
Alan Rice May 20, 2022 2:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Okay. Now let me get this straight : The US Supreme Court wants more babies, but The US Economy ("The Worlds Largest Economy")can't feed them ??
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email