Brinc Food Technology Program Manager, Nicole Lee, with the help of insight from representatives of portfolio company Harmony Baby Nutrition (Harmony) and Brinc Venture Partner, Mattan Lurie, delves into issues surrounding recent baby formula shortages, observing health factors, the supply chain, and alternative options.
Baby formula is an important part of the food industry, feeding over a hundred million children each year. Particularly for parents who cannot naturally produce breast milk, formula is a vital form of nourishment for their children. In fact, according to the Centers for Disease Control and Prevention (CDC), fewer than half of three-month-olds in the US are exclusively breastfed, and almost one-fifth receive some formula within the first few days of life.
In 2022, Abbott Nutrition shut down its facility in Michigan, which was responsible for a quarter of the US baby formula supply, due to reports of contaminants. This led to a prolonged formula shortage that still persists almost a year later, compounded by additional factors such as the COVID-19 supply chain crisis. This had little impact on parents who can choose between breastfeeding and infant formula, but was a major concern for those who experience physiological challenges or cannot produce breast milk for their children.
As a result, the US experienced worse than just empty shelves, with malnourished and hospitalized infants throughout the country, which had an especially detrimental effect on low-income families. All this pronounced the industry’s over-reliance on few players and highlighted the danger of monopolizing a market necessary for survival.
These parents are forced to rely on infant formula, which, as stated by Brinc’s Venture Partner Mattan Lurie, makes breast milk substitutes “non-negotiable”.
“Brinc is most interested in investing in critical must-have solutions in our food system, rather than nice-to-haves. Infant formula represents one of those key areas.” Mattan Lurie, Venture Partner, Brinc
“Formula — and especially human breast milk proteins — are necessary for infant survival” notes Lurie. “Brinc has made three investments in the infant formula sector precisely because of the must-have nature of formula. We are particularly bullish about the synthetic replication of human breast-milk proteins.”
A substantial number of infant formula products currently on the market, however, are created with cow’s milk even though dairy is one of the most common childhood food allergies. On the plant-based side, some formulas are soy-milk based, which is also a commonly known allergen, with research showing that soy-based formulas could be associated with neurological issues later in life.
Unlike dairy or soy-based formulas, breast milk contains nutrients, including sugars and proteins, that promote infant growth and development. Other studies have also found breast milk boasting higher digestibility and more antibodies that protect babies from infections and diseases than their counterparts.
With parents better informed and a growing demand for optimal nutrition for their children, new players in the infant formula space have risen up to offer healthier, more sustainable alternatives to traditional dairy and soy-based formulas. Boston-based startup Harmony Baby Nutrition (a Brinc portfolio company) is one such player that’s utilizing cutting-edge biotechnology to create formula naturally designed for humans.
Harmony approaches the problem of creating a healthier and more sustainable alternative to infant formula with use of precision fermentation; a technology that uses microbes to grow large quantities of specific proteins. In the case of infant nutrition, fermentation technology enables scientists to replicate the exact components that are found in natural breast milk, meaning that parents are able to feed their children formula that mimics the nutritional profile of breast milk.
According to Harmony Founder & CEO Del Afonso, by using precision fermentation ingredients, “Harmony’s infant formula will provide the same nutritional value of human breast milk without the allergic reactions that commonly occur with conventional, cow’s milk-based, infant formulas.”
Neil Schauer, Chief Scientific Officer at Harmony, adds that proteins derived from precision fermentation can be “more natural for babies than formulas that are based on cow’s milk, since the novel components in Harmony’s and formula are bioidentical (matching on the molecular level) to their breast milk counterparts”. Schauer adds “After all, breast milk is made for human babies, and cow’s milk is made for calves.”
“Harmony’s infant formula will provide the same nutritional value of human breast milk without the allergic reactions that commonly occur with conventional, cow’s milk-based, infant formulas.” Del Afonso, Founder & CEO, Harmony Baby Nutrition
Precision fermentation presents an incredible opportunity to create healthier alternatives in the baby nutrition space. However, a few challenges persist for companies like Harmony in their commercialization journeys.
Precision-fermentation ingredients, like many new food technology products, are expensive to grow in a lab at a commercial scale from their current bench scale, which would be necessary when trying to compete on price with existing products. Attaining this goal, though, would mean higher investment in equipment. While there are some contract manufacturers companies like Harmony can turn to, such factories are typically built for existing use cases (such as pharmaceutical or ethanol production) and not new forms of proteins, like breast milk.
It is important to note, however, that as a ‘non-negotiable’, infant formula is something parents will pay a premium for a quality product of, enabling producers to set higher price points. At the same time, companies like Harmony can sell their developed proteins as an ingredient — as Perfect Day did when collaborating with Nestle in 2022, creating additional revenue streams to balance costs.
“Precision fermentation is a technology that has actually been used for decades to safely produce common products, such as the enzymes used to make cheese, various vitamins, a whole host of therapeutic proteins used in the pharmaceutical industry, and HMOs that are already included in many infant formulas.” Dr. Neil Schauer, Chief Scientific Officer, Harmony Baby Nutrition
While there are some instances of precision fermentation-derived dairy alternatives being approved and made available around the world, the sector still faces significant regulatory challenges.
This is understood by those in the space, as the goal is to benefit, not hinder, consumers. “It is incredibly important to remain thorough when assessing all aspects of safety, especially with infant products. If the regulatory agencies were to rush this process, it would increase the likelihood that a potentially harmful product might be released to the public. Although the process is long, it is very necessary.” says Afonso.
Afonso adds that the formula shortages and recalls, however, have created a “sense of urgency” for authorities to accept new ingredients in formula products. This includes a recent workshop between the U.S. Food & Drug Administration (FDA) and the National Institute of Health (NIH) at which new technologies for formula production were discussed, demonstrating their amenability to new alternatives.
3. Consumer Acceptance
Limited common knowledge exists when it comes to fermentation-derived proteins. With new parents taking extreme caution in every aspect of their newborn’s care, it is understandable that they may retreat to more well-known products and approach new ones with a level of skepticism. Further, consumers can see products created via precision fermentation as ‘from a lab’ and therefore less natural.
However, precision fermentation is not a new technology. As Schauer notes, “Precision fermentation is a technology that has actually been used for decades to safely produce common products, such as the enzymes used to make cheese, various vitamins, a whole host of therapeutic proteins used in the pharmaceutical industry, and human milk oligosaccharides [HMOs] that are already included in many infant formulas.”
Companies and authorities like the FDA, therefore, have the responsibility to educate and reassure consumers that these products are safe — that they replicate naturally-occurring components of breast milk, which is made for humans.
In order to overcome these hurdles, companies like Harmony will require capital and support as they scale. Other than financial capital, investors can also add value by introducing founders to key distribution partners or securing strategic alliances for regulatory development: key factors in many choosing Brinc’s acceleration programs, as the platform provides networking, mentorship, business streamlining, and pitch improvement and opportunities.
The Future of Infant Formula, An Innovation Imperative
In the public eye, food technology and alternative protein can take the form of plant-based burgers or oat milk. However, while vegan burgers have had large-scale global consumer impact, infant nutrition is not an option, but rather a vital part of our food system.
“Brinc is most interested in investing in critical must-have solutions in our food system, rather than nice-to-haves. Infant formula represents one of those key areas.” says Lurie.
Reports suggest that Asia Pacific will be the fastest-growing region in the baby food and formula market, as Asian consumers are more willing to pay premiums for higher quality products. In 2022, Harmony launched its presence in Asia with a lab facility in Hong Kong. Other baby nutrition companies are also targeting this region using technologies from cell-based to soy-free plant-based ingredients.
Brinc believes that technology can be the key to disrupt the way we eat, including promoting foods as essential as infant formula. From decarbonization and malnutrition to animal welfare and social justice, major global issues have the potential to be addressed by game-changing entrepreneurs working on innovative food solutions. Thus, Brinc’s primary goal is to provide the tools and mentorship necessary for companies like Harmony to scale up and make this goal a reality.
There is enormous potential to change the way we eat at all stages of life, and Brinc will continue to work toward a healthier, and more accessible and sustainable world.
If you’re working on a food startup that aligns with Brinc’s mission, fill out the interest form here to be notified when applications for the next Food Tech accelerator are open.
Brinc is also raising its Counter Culture Fund to back the next generation of alternative protein companies in Asia with a focus on cultivated meat, precision fermentation, plant-based analogues, and novel ingredients. To learn more about Brinc’s Counter Culture Fund, please reach out to firstname.lastname@example.org.
We would like to thank Del Afonso (Founder & CEO) and Dr. Neil Schauer (Chief Scientific Officer) of Harmony Baby Nutrition; and Mattan Lurie (Venture Partner) of Brinc for their contribution to this article.