Dive Brief:
- Infant formula-making startup Bobbie acquired pediatric nutrition company Nature’s One last month as part of a bid to grow domestic manufacturing capacity.
- The acquisition includes Nature’s One $32 million manufacturing facility in Heath, Ohio, which produces organic infant powder formula. The new facility will give Bobbie end-to-end control of its production processes, the company said.
- The cost of the deal was not disclosed, but the startup was able to fund the acquisition with $70 million of outside funding, VP of Supply Chains Dominic Mills told Manufacturing Dive in an email.
Dive Insight:
With the acquisition and added facility, Bobbie will have the production capacity to reach 15% of the market not served by the Agriculture Department's special supplemental nutrition program for women, infants, and children, known as WIC.
Currently, only three infant formula manufacturers, Abbott, Mead Johnson and Nestlé Gerber, have a contract with state WIC agencies, according to the Department of Agriculture.
“While we can't currently serve the WIC market, ultimately, Bobbie strives to be a company capable of enacting powerful change throughout this industry in a way that is felt by every consumer,” Mills said. “This acquisition is a step in the right direction towards serving the WIC market one day, expanding accessibility nationwide to reach more American families with quality products.”
The acquisition also positions the combined company as the third largest infant and toddler brand in the U.S., according to a July 31 press release.
Nature’s One Founder Jay Highman will continue as a shareholder of Bobbie. Highman established Nature’s One in 1997.
Bobbie is focusing on doubling down on domestic manufacturing and supply chain resilience, according to the release.
Established in 2018, the startup previously partnered with infant formula maker Perrigo to manufacture its organic infant formula, which Mills said Bobbie will continue to work with to build its domestic supply chain resiliency. Perrigo has also been working on expanding its U.S. manufacturing with $170 million in investments, including buying a factory and other assets from Nestlé last fall.
In September, Bobbie announced it was committing $100 million to increase infant formula access, quality and options by 2030, part of the Biden administration’s national nutrition strategy.
The following month, the formula maker launched its R&D hub, dubbed Bobbie Labs. The hub created a new, 100% lactose infant formula, which the U.S. Food and Drug Administration approved in March.
“From inception, Bobbie’s mission has been centered around evolving the infant formula industry and this acquisition is one of the biggest diversification moves in this very concentrated industry,” Bobbie CEO and co-founder Laura Modi said in a statement.
The acquisition comes over a year after a national infant formula shortage, due to the temporary closure of Abbott Nutrition’s largest manufacturing plant in Sturgis, Michigan.
Correction: A previous version of this article misstated Bobbie's anticipated market reach. The story has been updated with the correct figures, plus additional comments from the company.
