ByHeart CEO on launching new baby formula in a supply crisis
WASHINGTON (AP) — The co-founders of baby formula startup ByHeart began working on their product long before the current shortage that’s rattled many American parents.
It took Ron Belldegrun and his sister Mia Funt six years to research, test and win regulatory approval for their company’s formula. When the Pennsylvania-based company launched in March, it was first new formula to hit the U.S. market in 15 years.
Belldegrun spoke with the AP about the lack of competition in the formula industry and the ongoing shortage. His remarks have been edited for length and clarity
Q: Why is it so hard to introduce a new formula in the U.S.?
A: This is appropriately the most highly regulated food in the world. It’s the only food that requires clinical trials for a novel, new formula. Until us there were only four companies in this country that made it. So it’s a supply chain bottleneck for a new company because three companies have owned 90% of the category for decades.
We believed that the only way to really change that was to own our supply chain, and therefore build it from scratch. That meant delivering a truly new infant formula and new manufacturing capacity. We really desired to translate troves of advancements in breast milk research and nutrition science into products that would set the strongest foundation for health, while combining the functional benefits of breast milk with the cleanest ingredients. Ironically, we didn’t get into this because we saw a shortage like this coming. We got into this to innovate.
Q: What has demand been like?
A: Out of the gate, we saw unprecedented demand. We were pacing at levels 15 times our most aggressive yearly projections. That validated our approach to own our supply chain because we had levers in our control to ramp up.
We’ve been investing very heavily in manufacturing at our facility here in Reading, Pennsylvania. We are moving from 24 hours, five days a week to 24 hours, seven days a week. We’re very focused on building that infrastructure to be part of a sustainable solution.
Because of those moves we were recently able to announce we would reopen orders to new customers — taking customers off our waitlist.
Q: The Food and Drug Administration plans to allow some foreign manufacturers that entered the market under emergency terms to stay permanently. What’s your reaction?
A: The solution to this issue, in our view, shouldn’t come from relaxing standards. So it will be interesting to see the FDA put out more guidance on what will be required for companies to stay.
I’m hopeful that more companies will invest in doing the work we did. Hopefully one of the structural solutions here will be that other companies decide not to outsource manufacturing but build manufacturing here; so that one day it’s not five of us, it’s 10 of us manufacturing formula and we don’t have these issues again.