ByHeart’s CEO on launching a 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 has unsettled many American parents.

It took six years for Ron Belldegrun and his sister Mia Funt to research, test and gain regulatory approval for their company’s formula. When the Pennsylvania-based company launched in March, it was the first new formula to hit the US market in 15 years.

Belldegrun spoke to AP about the lack of competition in the formula industry and the continuing shortage. His comments have been edited for length and clarity.

Q: Why is it so difficult to introduce a new formula in the US?

A: This is appropriately the most regulated food in the world. It is the only food that requires clinical trials for a new and novel formula. Until us there were only four companies in this country that did it. Therefore, it is a bottleneck in the supply chain 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 wanted to translate the treasures of advances in breast milk research and nutrition science into products that would lay 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: How has the demand been?

A: From the beginning, we saw unprecedented demand. We were advancing at levels 15 times higher than our most aggressive annual projections. That validated our approach to owning our supply chain because we had levers in our control to accelerate.

We have been investing heavily in manufacturing at our facility here in Reading, Pennsylvania. We are going from 24 hours, five days a week to 24 hours, seven days a week. We are very focused on building that infrastructure so that it is part of a sustainable solution.

Due to those moves, we were recently able to announce that we would be reopening orders to new customers, removing customers from our waiting list.

Q: The Food and Drug Administration plans to allow some foreign manufacturers that entered the market under emergency conditions stay permanently. What is your reaction?

A: The solution to this problem, in our view, should not come from relaxing the standards. So it will be interesting to see the FDA release more guidance on what will be required for companies to stay.

I am hopeful that more companies will invest in doing the work we did. Hopefully one of the structural solutions here will be other companies deciding not to outsource manufacturing but to build manufacturing here; so that one day we are not five, we are 10 manufacturing formula and we do not have these problems again.

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