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Nestle’s Gerber CEO Sees Formula Shortage Improving By October

Published: September 12, 2022
Shelves of baby formula are seen in a Walmart Supercenter on July 08, 2022 in Houston, Texas. Consumer goods continue seeing shortages as the country grapples with ongoing supply chain issues stemming from the pandemic. (Image: Brandon Bell/Getty Images)

Nestle SA’s Gerber Products Company is still in “critical task force mode” due to the U.S. infant formula shortage, its CEO Tarun Malkani said last week, adding that he expects the crunch to improve by October.

Gerber added market share as it pumped out formula to meet the heightened demand during the shortage, caused by supply chain crunches and the closure of an Abbott Laboratories plant in Michigan, Malkani said last Thursday during a media event at Nestle’s U.S. headquarters in Arlington, Virginia.

The Nestle brand, which makes the Good Start line of infant formulas, now has market share of roughly mid-9%, Malkani said. Before the crisis, its market share was around 8.5%, he said.

“We need the marketplace to rebalance,” he said.

Availability of powder baby formula, the bulk of the market, has been improving on store shelves, with roughly 79% in stock as of Sept. 4, according to data provider IRI. It reached as low as 69% mid-July, according to IRI.

To ease the shortage, the U.S. government and Food and Drug Administration made it easier for manufacturers to get shipments into the country from overseas.

Gerber “pruned” novelty infant formulas in the beginning of the crisis to focus on those needed most, he said.

Nestle also flew in infant formula supplies from Europe to the United States

Major U.S. retailers including Walmart Inc and Target Corp both said last month they have seen formula supplies improve. Target said it was still rationing the product online and in store.

By Reuters (Reporting by Jessica DiNapoli in Arlington, Virgina; Editing by Andrea Ricci)