Sister and brother open baby formula plant, helping with US shortage
In a converted manufacturing plant in Reading, Pennsylvania, two University of Pennsylvania graduates and siblings opened America’s newest baby formula factory.
The timing for ByHeart – which was launched in March – was near perfect: A severe baby formula shortage has gripped the nation due to recalls and a Michigan formula plant shutdown earlier this year.
“We are disrupting a category that has not been disrupted in decades,”
Mia Funt, 39, co-founder and president, said in an interview with The Inquirer. Her brother and co-founder Ron Belldegrun, 36, is chief executive officer.
Four companies control 90% of the U.S. market for infant formula: Abbott, Gerber, Mead Johnson and Perrigo Nutritionals. Perrigo produces storebrand infant formulas for major stores including Walmart, Target, Kroger, CVS, Walgreens and
Sam’s Club.
ByHeart sold its FDAapproved formula to customers in all 50 states within a week of launch and they are planning on expanding the plant, Funt and Belldegrun said.
It’s a rare new entrant in a highly regulated infant food business that’s controlled by a few big companies.
ByHeart’s founders say they are only the fourth vertically integrated infant formula brand in the United States with end-to-end oversight of production, a stable supply chain, and research and development. ByHeart processes raw, whole milk from
Pennsylvania dairy farms, turns it into powder formula using a patented blend of the two proteins in breast milk, alphalactalbumin and lactoferrin, as well as broken down proteins, and gets the closest to breast milk in the market, the founders said.
In 2019, ByHeart acquired and updated the manufacturing facility in Reading rather than using a contract manufacturer. ByHeart said the plant cost $40 million, including preventive food safety measures, to convert the plant from toddler food production to infant formula. The company has raised a total of $190 million.
Federal agencies such as the FDA are taking steps to improve the supply of infant and specialty formula products in the U.S., but shelves remain partly
or largely bare in many stores.
ByHeart’s infant formula is available only online at byheart.com.
Funt graduated from the University of Pennsylvania in 2005 and Belldegrun graduated in 2008. Funt worked in the tech industry, while Belldegrun hails from the food nutrition industry as an investor.
The sister-brother duo founded the company in
2016. They said it took five to six years to research formulations, recruit staff, conduct a clinical trial, obtain government approvals, and open the plant.
Belldegrun said the siblings’ “desire to start this came from wanting to truly innovate. Right now is the most exciting era in breast milk research; there’s never been a better time to make formula
closer to breast milk.”
But the industry hasn’t kept up with advances, Belldegrun said. Meanwhile, the co-founders had children of their own, injecting their mission with even more personal urgency.
“We spent two years auditing infant formula plants around the world, and realized we had to build it ourselves,” Funt said.