The Baby Formula Shortage: ‘Indian American Parents Understood the Gravity of the Situation Early On’
- Dr. Geeti Ghosh, a pediatrics specialist in Elgin, Illinois, says, “This is a failure both on the part of the formula industry as well as the government. Both were aware of the shortage since last year.”
There are so many privileges we take for granted in America. Access to food certainly tops that list. So, it’s shocking to see the country grapple with the problem of providing milk to the youngest of its citizens.
The infant formula shortage nightmare gripping the U.S. is not an overnight phenomenon. It has been building up since September of last year. While the severity of the shortage hit the headlines in early May this year with the recall of some Abbott products that resulted in the closing of their Sturgis facility in Michigan, the roots of the scarcity go deeper into a market warped by limited competition, exclusive contracts, and just a few large suppliers.
To start with the infant formula market is a difficult one to predict. Its demand is set by the nation’s birth rate. The number of births has been declining every year since 2008, except for one year, according to the U.S. Census Bureau. The market has shrunk each year with that. Then the pandemic set in, in 2020 further exposing the fragility of the supply chains as well as temporarily altering the buying habit of people.
According to the consulting firm Demographic Intelligence’s director of research, Lyman Stone, in 2020 spring formula sales rocketed as Americans stockpiled formulas like toilet paper. Then the sales fell noticeably as people worked through their stockpiles causing oscillation and adding further chaos to the process of production planning. Stone’s research also found a boost in births in early 2022 and a dramatic decline in the rates of breastfeeding among new mothers. This pushed up the demand for formula once again.
But that would not have been a problem had the market for infant formula not been dominated by only a handful of companies (Abbott, Gerber, Perrigo, and Reckitt Benckiser). Of these, Abbott’s one factory (the one they had to close) serves 40% of the market. It’s a classic case of how reduced competition is bad for the economy.
Concentration in the formula market has been further worsened by FDA regulations. 98% of formula consumed in the U.S. is manufactured domestically and more than half is purchased through a nutrition program for low-income families known as WIC. Abbott has the exclusive provider contract with WIC, USDA’s supplemental nutrition program. So, in a way, it’s the overdependence on Abbott that has caused an escalation of the formula problem.
Bewildered by the fact that a country obsessed with hoarding could be blindsided so completely when it came to infant formula, I reached out to Dr. Geeti Ghosh, a pediatrics specialist in Elgin, Illinois, and a household name in many Indian families with infants.
With more than 30 years of experience under her belt, she has had the opportunity to observe how the industry, as well as the government, have mismanaged child nutrition for years. She mentioned with dismay how the WIC program encourages new parents to have too many formulas which they end up at times selling. And then the crisis happened and still, the government didn’t regulate the extra stock they were distributing through WIC.
“This is a failure both on the part of the formula industry as well as the government. Both were aware of the shortage since last year,” she said.
Since she has a lot of Indian families with infants in her practice, I enquired how the Indian community was affected and how they were dealing with the shortage. “Indian parents are market savvy. They had understood the gravity of the situation early on and started buying off Amazon. The formula can be fortunately stocked up for up to a year so, most have not had a problem,” she said.
She is advising her patient families to turn to generic formulas which are as safe as the big brands. Some generic formula brands in the market have been available for more than a decade, like the Kirkland Signature available in Costco, Sam’s Club carries Member’s Mark Infant, and Target has its own brand, Up & Up Advantage Infant Formula. “The generic brands are as good and also less expensive,” she said.
“This is a crisis that could have been easily averted if there was a will to do so,” she added as she opened up about the bigger systemic problems plaguing the infant formula industry in the U.S.
FDA’s stringent regulations don’t allow European formula brands, some of which according to Dr. Ghosh are better than American formulas. Import duties and restrictions have practically eliminated any competition from Canada and Europe. This level of protectionism might be helping the big brands in the country but not truly serving American families with infants.
Paulami Chowdhury, mother of a six-month-old in South Windsor, Connecticut is part of a Facebook group called Find My Formula that is tracking and exchanging information about the availability of formulas in the vicinity. “There is panic among parents but fortunately also a willingness to come together and share relevant information,” she said.
She observes how creative people have been in trying to manage the problem. She knows of mothers who have turned to Amazon Canada to order formula. “The Facebook groups are also organizing swap events where parents are exchanging formulas,” she stated.
As Abbott reopens its Sturgis plant it is expected that in about six weeks the shelves will fill with more supplies. Till then, Americans can ponder if they want to address this conundrum more permanently by updating regulations and allowing more competition or by throwing emergency arrangements like “Operation Fly Formula” at it.
(Top photo, Facebook photo by Isaac Whitman)
Sreya Sarkar is a public policy analyst based out of Boston, who has previously worked as a poverty alleviation specialist in U.S. think tanks. She is a keen observer of Indian politics and presently, writes non-fiction articles and op-eds for Indian policy blogs and magazines.