It’s hard to believe that in 2022 food security in America would be an issue, but for thousands of parents, feeding their babies is a daily struggle.
The US baby formula crisis was the perfect storm of a monopolised market, a serious food recall and a sloppy government response. The story in a nutshell? Major US formula manufacturer Abbott, ceased production after it was uncovered that multiple infants had become sick after consuming formulas made in their facility. A recall of the products was subsequently issued, resulting in serious supply issues, leaving parents in a lurch.
After back and forth between regulators and the government spurred serious public criticism, the US finally pulled up their socks and began sourcing baby formula from other countries, including Australia. The Biden administration organised the imports in May to easy supply constraints.
Infant formula and dairy specialist company, Bubs (ASX: BUB) has been a god-send for countless US parents with the first shipment landing in early June.
The Bubs formula was delivered via Operation Fly Formula where the US Department of Agriculture and the Department of Health and Human Services gained the use of Department of Defence contracted commercial aircraft to import infant formula from multiple locales, worldwide.
So far, 172 tons of the formula has been exported and distributed by major retailers, The Kroger Co. and Albertsons.
July 6th is set to bring another plane load of formula to US parents, with Operation Fly Formula’s 4th flight due to land, bringing with it 90,000 tins of Bubs goodness.
Valued at approximately $3 million, the formula will be distributed with two new retail groups, Meijer and HEB.
The HEB Grocery Company is a Texan supermarket chain, boasting a network of 340 stores. Meijer is another grocery store chain with stores located in the Midwest areas of Michigan, Illinois, Indiana, Kentucky, Ohio and Wisconsin.
With Bubs products now in major retail stores nationwide, the Company welcomes the opportunity to expand access to their product via the WIC Program.
The Government’s Special Supplement Nutrition Program for Women, Infants and Children accounts for over 50% of formula consumption in the country. The Program ensures a subsidy for American families to help provide adequate nutrition. Thanks to discussions with the FDA, each US state is now able to consider and authorise Bubs products for Program participants. As of 29 June 2022, Bubs is available to Program participants in 22 states, expanding the Company’s reach and aiding the rapid establishment of the brand in America.
“We are grateful for the opportunity to assist parents under the WIC Program,” said Kristy Carr, Bubs Founder and CEO. “As Bubs continues to replenish retailer shelves with up to six Bubs Infant Formula products, it is comforting that many more American parents will have the opportunity to access our clean nutrition that is and will continue to be available on shelves.”
Since import to the US began, the Bubs share price has lifted considerably, and is trading around $0.63 per share which is almost double their 52-week low of $0.335 in April 2022.
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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