Baby Formula Shortage Has Parents and Lawmakers Scrambling

Stores Impose Purchase Limits

There is a shortage of baby formula that has left both manufacturers and lawmakers scrambling. The issue originated during the pandemic and has persisted due to both supply chain issues and production halts.

Since formula must provide babies complete nutrition, parents staring at empty grocery shelves are left without a good alternative. Grocery stores like Kroger (KR) are addressing the shortage by imposing purchase limits. Meanwhile lawmakers are investigating allegations of price gouging.

Few Manufacturers

Part of the problem is that few manufacturers have cleared the strict regulatory hurdles to produce infant formula. In 2021 Reckitt Benckiser Group (RBGLY), which owns Enfamil and Abbott (ABT) sold 80% of infant formula in the US.

In February, due to contamination concerns, Abbott suspended production at a plant that produced over half of the company’s US infant formula. Meanwhile, Enfamil struggled with shipment delays tied to supply-chain snarls.

Possible Remedies

Abbott Labs, which sells the Similac line, is in discussions with the FDA to resume production at a factory in Michigan. It is also bringing in the product from its factory in Ireland. Enfamil has ramped up its factories so that formula is now being produced 24/7.

The FDA claims there should be enough supply to match current demand and is evaluating whether uneven distribution is leading to surpluses in some areas and shortages in others. They are also concerned consumers may be hoarding formula. In the meantime, some parents are asking friends and family to grab a bottle of formula if they make a rare sighting of the product.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender