PHOENIX — It started at a plant in Sturgis Michigan. An FDA inspection of one of the largest infant formula manufacturing facilities in the country detected a rare and potentially deadly bacteria that can live in powdered formula. In late February, a recall is issued after one infant died, causing massive disruption to an already strained supply chain.
Three companies produce 98% of the infant formula consumed in the United States, Abbot Nutrition, the makers of Similac, have the largest share of the market at 43%. It is their Michigan plant this is offline and causing the ripple effect.
The startup analytics company Datasembly collects what they call a hyper local dataset of over 155,000 stores and over a trillion pricing and product records. Their nationwide data shows the stock level for formula remained stable in the first half of 2021. An uptick in the out-of-stock rate began last summer, reaching 23% in January. The last two months have seen a severe increase, a 12-point jump from 31% out-of-stock rates in April to 43% in May.
In Phoenix, the shortage is worse.
Weekly numbers from Datasembly show eight major metro areas where out-of-stock rates for formula is above 50%. Phoenix is one of them with a rate just under 51% for the first week of May.
Phoenix rates have fluctuated around the nationwide out-of-stock rate since early last year. In the past few weeks, however, the formula shelves in Phoenix emptied out faster than the national rate by seven points.
What is being done to alleviate the situation?
The FDA recently said that Abbott’s shuttered formula plant in Michigan is likely to reopen in åbout two weeks. If that occurs, Abbot expected that shelves would begin to restock in larger numbers in about six to eight weeks. Until then, the company said that they are importing formula from their FDA certified plant in Ireland. The White House also announced that they will work with the FDA to increase formula imports from U.S. trading partners.
Social media posts are circulating that infant formula is available on Amazon’s Canadian website that can be purchased and shipped to the United States. This is false. Once a U.S. shipping address is selected, a flag will appear that notifies the user that “the selected item cannot be shipped to that address.”
