Exclusive: Danone speeds up shipments of infant formula to the United States to face the shortage

LONDON/LOS ANGELES, May 20 (Reuters) – Aptamil maker Danone SA (DANO.PA) has stepped up shipments of infant formula from Europe to tackle a shortage in the United States, data shows. US customs and ocean freight data analysis. by shipping consultancy Ocean Audit for Reuters.

Danone, the world’s second-largest formula maker but a relatively small player in the United States, shipped much of the product from Britain and the Netherlands by sea freight through its Nutricia North America arm.

This follows a Feb. 17 recall by major manufacturer Abbott Laboratories (ABT.N) which recalled dozens of types of its Similac, Alimentum and EleCare formulas, creating one of the most urgent food shortages in history. recent for American families.

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Between January and May, Danone’s Nutricia division more than tripled its ocean imports to North America, and more than 90% were delivered to the United States, said Steve Ferreira, CEO of Ocean Audit, who has analyzed the data exclusively for Reuters.

“We understand how important it is for families to have access to these specialist formulas, which is why our top priority has been to increase the production and supply of these medical formulas to serve the most vulnerable babies since that the shortages emerged in February,” a Danone spokesperson told Reuters. .

On May 10, three days before US President Joe Biden took to the airwaves with his plan to address the baby formula shortage, the Independent Quest sailed into the Port of Philadelphia to deliver 42,000 cans of Danone baby formula.

It was quickly sent to Jeffersonville, Indiana, for distribution to retailers who for weeks had to limit the amount of infant formula mothers could buy.

“If it comes to port on a Monday, I’m pretty sure they’ll have it out Tuesday or Wednesday because the product is so hot,” Ferreira said.

Ferreira said his data showed that from Jan. 1 to May 1, 2021, Danone Nutricia sent nearly 770,000 boxes of infant formula, filling about 100 freight containers, to North America. In the comparable period this year, the number skyrocketed to more than 2.4 million cans, he said.

Of that product, 93% went to US east coast ports, while 7% went to Mexico’s ocean gates, Ferreira said.

Shelves for baby and toddler formula are partially empty as the amount a shopper can purchase is limited due to ongoing national shortages, at a grocery store in Medford, Massachusetts, U.S., May 17, 2022. REUTERS/Brian Snyder/File Photo

Separate US customs data analyzed by Reuters shows that on February 22, five days after Abbott’s recall, nearly 38,000 kilograms (83,775.66 pounds) of Danone Nutricia cargo arrived in the United States from Great Britain. Britain and the Netherlands.

The customs data did not specify the exact nature of the shipment, but described part of it as “clinical nutrition powder” and “medical nutrition”. On March 9, about 34,000 kilograms more arrived, followed by nearly 30,000 kilograms on March 30.

Reuters was unable to obtain documents confirming imports of airborne infant formula from Danone.

Danone shares rose 1.6% in the early afternoon on the top Parisian CAC 40 index (.FCHI).

FORMULA SHAKE-UP

The deliveries show how Abbott’s factory suspension and shortages are rocking the market, giving some players a chance to grab a slice of the lucrative $4.8 billion infant formula industry in the United States. United.

“Abbott appears to have lost about 2,000 basis points of share, from 40% to 20%,” Barclays analyst Warren Ackerman said on Friday, referring to the US market.

Reckitt Benckiser (RKT.L), the longtime No. 2 in the United States, told Reuters on Tuesday it now accounts for more than 50% of the country’s total infant formula supply.

The UK company said it supplied just over a third of US infant formula before Abbott’s recall. Read more

It has increased production of Enfamil by about 30% and is making more frequent deliveries to stores as it seeks to counter a nationwide shortage in US supermarkets.

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Reporting by Richa Naidu in London and Lisa Baertlein in Los Angeles; Editing by David Gregorio in New York, Josephine Mason and Alexander Smith in London

Our standards: The Thomson Reuters Trust Principles.

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