Dec 8, 2022

Mawazo Writing Africa

Writing about the main

Danone ramps up US baby formula shipments to address shortage

Aptamil maker Danone SA has increased shipments of infant formula from Europe to address a shortage in the US, according to US customs data and an analysis of ocean freight data by shipping consultancy Ocean Audit for Reuters.

Danone , the world’s second-largest baby formula maker but a relatively small player in the US, shipped much of the product from the UK and the Netherlands by sea freight through its North American subsidiary Nutricia.

This was followed by a February 17 recall by leading-edge manufacturer Abbott Laboratories, which recalled dozens of types of its Similac, Alimentum and EleCare formulas, resulting in one of the most pressing food shortages in recent history for US families.

Between January and May Danone’s The Nutricia division has more than tripled its marine imports to North America, and more than 90% were shipped to the United States, said Steve Ferreira, CEO of O cean Audit, which analyzed the data exclusively for Reuters.

“We understand how important it is for families to gem Therefore, increasing the production and supply of these medicinal formulas to target those most at risk is our absolute priority to care for babies since the shortage hit in February,” a Danone spokesman told Reuters.

In May On October 10, three days before US President Joe Biden announced his plan to address the shortage of infant formula hit the airwaves, the Independent Quest docked in Philadelphia to deliver 42,000 cans of Danone formula.

It was quickly shipped to Jeffersonville, Indiana for distribution to retailers , who had to restrict how much infant formula mothers could buy for weeks. “If it gets to port on a Monday, I’m almost certain they would have it out by Tuesday or Wednesday because the product is so hot,” Ferreira said.

Ferreira said that its data showed that from January 1 to May 1, 2021, Danone Nutricia shipped nearly 770,000 cans of infant formula filling about 100 shipping containers to North America. During the comparable period this year, the number jumped to over 2.4 million cans, he said.

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

Separate US Customs data analyzed by Reuters shows that on February 22, five days after the Abbott recall, nearly 38,000 kilograms (83,775.66 pounds) of Danone Nutricia cargo from the UK and the USA arrived in the Netherlands.

The customs records did not specify the exact nature of the cargo but described some of it as “clinical nutrition powder” and “medical nutrition”. Another 34,000 kilograms arrived on March 9, followed by nearly 30,000 kilograms on March 30.

Reuters was unable to obtain any records confirming Danone’s baby food imports from the air.

Danone shares are up 1.6% in early afternoon trade on the Paris blue-chip CAC 40 index.

FORMULA SHAKE-UP

The shipments show how the suspension of Abbott’s factory and shortages are rocking the market and giving some players an opportunity to grab a stake in the lucrative $4.8 billion US baby food industry.

“Abbott appears to have lost about 2,000 basis points of market share, up from 40% to 20%,” Barclays analyst Warren Ackerman estimated on Friday, referring to the US market.

Reckitt Benckiser, the long-time No. 2 in the US, told Reuters on Tuesday that it now accounts for more than 50% of all baby supplies

The UK company said it supplied just over a third of US baby formula before Abbott’s recall.

It has cut production of Enfamil by about 30% increased and delivered to stores more frequently to address a nationwide shortage in US supermarkets.

Reuters