The high barriers to entry illustrate why there are so few new baby formula makers — and why the U.S. will continue to be vulnerable to shortages.
When Ron Belldegrun and his sister Mia Funt decided to start a new baby formula company, they knew it wouldn’t be easy. High barriers to entry had discouraged plenty of other entrepreneurs from trying. The process can be so discouraging that just two conglomerates maintain a decades-long grip on the industry.
“It’s a much more fragile supply chain than people realize,” said Belldegrun. “There needs to be more depth to manufacturing in this country.” “They say to you, you be a marketing company. Don’t worry about the regulatory or the quality or the required clinical trials. We’ll do all of that,” said Belldegrun.That didn’t sit well with him or his team, who started the company because they believed that the legacy players weren’t doing enough to incorporate the latest academic research on breastmilk into their formulas.
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