Formula makers have ramped up marketing campaigns to grab a bigger slice of the lucrative $5.6 billion formula market after a severe shortage shook consumer confidence earlier this year, said Allen Sayler, an industry consultant.
The month-long closure of Abbott Laboratories’ Michigan formula plant following complaints of bacterial infections in infants has eroded the Similac maker’s market share. Other brands have an opportunity to step in due to relaxed government regulations, desperate parents looking for formulas, and retailers like Walmart looking for alternatives, Sayler said.
“A high level of uncertainty around supply has created business opportunities that didn’t exist before,” Sayler said, adding that infant formula makers are drawn to the United States because fertility rates are higher than in Europe, China and Japan and many US mothers are returning to work outside of the home.
Profit margins have also increased, according to a report by industry research firm IBISWorld.
Viewers of TV and streaming adverts for the formula have risen to around 562 million this year, up from just 200,000 last year, according to data from media measurement company ISpotTV. Some ads were from new brands approved by the US government to alleviate the shortage. Others came from already approved brands that ramped up marketing.
French milk producer Danone SA made an exception to its internal policy against promotional formulas due to the shortage in the US, a spokesman said.
The World Health Organization (WHO) is urging governments and companies to ban baby formula advertising to protect themselves from predatory marketing practices and to promote breastfeeding, which it recommends as a healthier choice. The United States has never enacted legislation to enforce the WHO advertising ban.
Of course, breastfeeding is not always possible and infant formula is an essential food.
Danone ran the biggest formula campaign for its Aptamil brand this year, recently approved by regulators on US shelves, ISpotTV found.
According to ISpotTV, Danone spent around $2.1 million airing commercials on NBC, the Hallmark Channel and ION. The ad touts that Aptamil is Europe’s #1 formula and “now we’re here for you.” The ads are still airing on streaming services, and the campaign has boosted awareness of Aptamil, an executive said.
Danone’s goal with the commercials is to “accelerate education” as “we’re still seeing empty shelves across the country,” the spokesperson said.
According to e-commerce analytics firm Dataweave, an average of about 77% of infant formula was in stock at major U.S. retailers in December, up from 51% in June.
An executive at Reckitt Benckiser Group Plc, which makes Enfamil, recently told Reuters he expects the formula shortages to last into the spring.
According to ISpotTV, three million viewers watched Enfamil’s streaming and local TV advertisements for its gentlemanly formula this year. A fraction of that number saw 2021 Enfamil ads.
ISpotTV does not track streaming and local TV campaign spend.
A Reckitt spokesman said online video has been part of its “media mix” for a number of years and that expanding into streaming platforms is part of the company’s strategy.
The UK-based company has a policy that bans promotional formulae in countries with high infant mortality and malnutrition. The policy “recognizes the importance and supports the aim and principles” of the WHO Code.
The last significant US TV advertising campaign for infant formula was in 2017, when Enfamil ran commercials for its infant formula for infants over 1 year old, according to ISpotTV.
Brands have also targeted the Instagram and Facebook feeds of new and expectant mothers.
US-based formula company Bobbie, which has seen sales jump due to the shortage, ran an ad starring supermodel Ashley Graham on ABC’s Bachelor in Paradise last month that attracted 5 million views, ISpotTV found out.
ISpotTV estimated the cost of the ad at $71,000, but a Bobbie spokeswoman said it was less without giving the exact number.
In the ad, Graham talks about breaking the stigma of bottle feeding. Bobbie’s promotional strategy is to “show up” for parents who deserve to learn about formulas the same way they would about any other product,” said CEO Laura Modi.
“The … approach of stopping all formula manufacturers from advertising has swung the pendulum in a different direction, where formula falls into the same category as cigarettes,” Modi said. “It fuels guilt and prevents new, next-generation companies from establishing their own ethical approach.”
https://www.independent.ie/business/farming/agri-business/agri-food/us-baby-formula-shortage-leads-to-boom-in-advertisements-42240339.html Shortage of baby food in the USA leads to an advertising boom