ByHeart to triple its production of infant formula, reinforce supply chain with facility acquisitions

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/	RuslanDashinsky
Source: Getty/ RuslanDashinsky

Related tags Infant formula Infant nutrition Milk

With this month’s acquisitions of an additional domestic manufacturing facility and an FDA-registered packaging and blending facility, infant formula company ByHeart successfully consolidated its supply chain and significantly boosted its production capacity – giving it a competitive advantage at a time when shortages and safety concerns continue to plague the category.

A newcomer to the highly consolidated US infant formula category, ByHeart’s launch last year with its FDA registration marked the first entrance of a new infant formula manufacturer in the US in more than 15 years – a hard-earned distinction that brother and sister co-founders set in motion seven years ago.

“When we started the company seven years ago, we saw that this critically important category – baby’s first food – had been dominated by the same three players for decades and it was in need of change. Parents and babies needed better, and so we committed to taking the long path to market and to building our business entirely from scratch because it was the only way to use the latest breast milk research, the highest quality ingredients and to really bring babies better nutrition. And we knew that if we didn’t make it ourselves, we couldn’t make it better,”​ Ron Belldegrun, CEO and co-founder, told FoodNavigator-USA.

“So, from the beginning, we invested in building our recipe from scratch with the world’s experts in pediatric nutrition and doing our own R&D and major clinical trials,”​ he said.

But it wasn’t enough for the duo to create their own infant formula recipe – they also wanted full control and oversight of the end-to-end manufacturing process so they could build resilience into the supply chain and safely and reliably feed babies, Belldegrun added.

“This year, we’ve never seen that be more important,”​ he added, referencing the nationwide infant formula shortage that left many caregivers struggling to feed infants following the temporary shuttering of a competitor’s facility due to safety concerns.

Acquisition of DairiConcepts will triple ByHeart’s production capacity

With last week’s acquisition of a DairiConcepts’ infant formula manufacturing facility in Allerton, Iowa, ByHeart tripled its production capacity – which when combined with its capacity from the manufacturing plant in Reading, Penn., that it acquired in 2019, provides ByHeart with enough capacity to feed approximately 500,000 infants annually and meet growing demand for its product, Belldegrun said.

“When we launched, we saw incredible demand for our product. Within seven weeks of launch, we were pacing to feed 10% of babies in the US … if we could have kept up with capacity,”​ Belldegrun said, proudly adding that positive testimonials and support for ByHeart poured in quickly.

“At that moment, it was clear to us that … we actually needed to take the next step and we had to start discussions to actually acquire this manufacturing facility,”​ he said.

He explained that because of ByHeart’s work with FDA, extensive clinical and animal trials and other necessary steps to register its infant formula, it was in a unique position to submit to FDA a currently pending application to permanently qualify the Allerton facility.

ByHeart’s acquisition of packaging, blending facility brings last piece under its control

ByHeart’s acquisition of DairiConcepts’ follows that of the FDA-registered packaging and blending facility Cascadia Nutrition in Portland, Ore., which allowed the company to bring in-house the last part of the production process that it has been outsourcing.

“Our belief has always been that we wanted full oversight of every step of the supply chain and it was always a ‘when’ not ‘if’ we’d want to own that last piece,”​ Belldegrun said.

He explained: “Prior to the Cascadia Nutrition acquisition, ByHeart owned 99% of our process. We procured all of our ingredients and long-term contracts with suppliers that we knew and trusted. We hold them all to incredibly high standards – we handpicked every ingredient which comes to our factory where we did 99% of the process. The only part that we didn’t do was put that into a final can.”

Cascadia has packaged infant formula for international brands for the past five years, and with ByHeart’s help provided a complete regulatory submission to FDA to serve the US infant formula market, Belldegrun said.  

He said he expects that facility to come fully online with FDA registration by the second quarter, at which time he said ByHeart will have “unconstrained supply and be able to reliably and safely provide our formula to many, many families.”

What sets ByHeart apart from the competition?

ByHeart’s substantial investments in both facilities in quick succession responds to the “positivity and such strong reception to our products,”​ Belldegrun said.

He explained that less than 2% of consumers using ByHeart have complained about digestion related issues, which is the main reason more than half of parents switch infant formula. This experience also is reflected in ByHeart’s clinical research showing it to be easy-to-digest, he added.

ByHeart’s formula also is set apart from the competition because it is clean label and made with a patented blend that includes grassfed whole organic milk and the two most common proteins in breast milk that Belldegrun says have been largely missing from infant formula.

“We created the first clinically proven easy-to-digest infant formula without maltodextrin, soy or palm oil, and our patented protein blend gets closer to breast milk than ever before so that it offers functional benefits for baby, such as support for immunity, digestion, gut health and other benefits that were demonstrated in our clinical trials,”​ he added.

When the new facilities are fully online in the second quarter, Belldegrun said he hopes to build on this momentum and expand ByHeart’s unique offering to more caregivers through distribution in mass retail later this year and eventually internationally.

He also noted that the company believes innovation is never over, and as it learns more it is developing a “deep pipeline of additional infant formulas.”

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