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In today’s edition: Ty Haney is back at Outdoor Voices, Planned Parenthood gets a reprieve, and a new infant formula hits the market.
– Feeding frenzy. Over the past five years, parents have gained more options to feed their new babies. In an industry traditionally dominated by giants Abbott, Mead Johnson, Nestlé, and Perrigo, the startup brand Bobbie has earned a loyal following and positioned itself as an advocate for parents and a better way to feed babies.
Today, another startup launches its own infant formula—a product seven years in the making and poised to compete with Bobbie’s corner of the market.
Nara Organics is selling an imported whole-milk infant formula, made in Germany. After a nationwide clinical trial that required enrolling babies at less than 14 days old, Nara’s formula will retail for $27 per 14.1-ounce can. Nara CEO Esther Hallam argues that its whole-milk formula is its distinguishing quality, compared to a skim milk-based formula with a small percentage of whole milk added. “We painstakingly formulated something that uses the highest percentage of milk fat,” she says. Bobbie, meanwhile, argues that it has an edge as an organic formula manufactured in the U.S., rather than imported (as are brands like the U.K.’s Kendamil and Australia’s Bubs). Other brands like Bobbie are moving toward greater whole milk in their formulations, too. It’ll be up to customers to decide which they prefer for now—more whole milk, or made in the USA.
Esther Hallam, founder of Nara Organics. But the better-for-baby startups are fighting for what is, still, a minuscule piece of the overall market. Bobbie CEO Laura Modi said earlier this year that the company has about 3.5% market share in the U.S. More than 90% of what is approximately a $2 billion market belongs to the corporate giants. Much of the market is controlled by the federal government, which is the biggest buyer of formula in the U.S.
The market for higher-quality, more expensive formula, however, is growing. The 2022 infant formula shortage scarred parents, who are looking for brands they can trust. “It completely eviscerated the trust between consumers and the big brands, and it happened pretty much overnight,” Hallam says. They want more choices. “The awareness, or even the desire to have a whole-milk formula even two years ago was non-existent,” Hallam says. “It’s really exciting to see consumers excited about a product like this and wanting more products like this.”
While going through the lengthy process of selling a new infant formula (which is closely regulated by the FDA as a sole source of nutrition), Nara launched a popular baby-tracking app. It has more than 1 million users, and the company is now using its app as a way to understand its potential formula customer base—what products they want when they’re awake at 2 a.m. Nara is launching with a waitlist of 30,000 who are eager for the five airplanes’ worth and two ocean shipments of baby formula that just arrived in the U.S.
Emma Hinchliffe
emma.hinchliffe@fortune.com
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This story was originally featured on Fortune.com
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