Months into a nationwide baby formula shortage, the crisis isn't getting any better. Parents across the country are still struggling to feed their babies, despite efforts by the Biden administration and manufacturers to boost supply. That's a problem ByHeart, the only new formula brand that owns its manufacturing, is working around the clock to fix. Mia Funt, Co-Founder & President of ByHeart, joined Cheddar's Opening Bell to talk about the tightly regulated industry, and how her company is dealing with the incredible surge in demand for baby formula. 

Opening Bell

ByHeart Aims To Disrupt The Baby Formula Industry As Shortage Continues

here to tell us more about it. Me a fun co founder and president of by Heart Mia, Thank you so much for joining us. What is by heart, your company and how is it different from other baby formula makers. So great to be here ASIA, thank you for having us by heart was founded to give all parents confidence in how we feed and nourish our babies feeding is one of the first decisions we make as new parents and it's incredibly intimate and important in setting a strong foundation for our baby's health. We believe all parents deserve the confidence that comes from knowing that we're feeding baby the best nutrition possible. We started by hard five years ago with a commitment to really innovating on the infant formula product and delivering the highest quality, most wholesome alternative to breast feeding. Um and really doing that by using the latest nutrition science and cleanest ingredients. Our launch I believe was so highly anticipated because by both parents and pediatricians because the infant formula product really hasn't meaningfully changed in decades and parents needed better. So we took a path that no other new entrant has taken because we knew that only when you own it and to end, can you truly change it? So that's what we, we acquired our manufacturer, we directly sourced every last ingredient. We own our product development and ran the largest clinical trial by any new brand in the last 25 years. And so with our launch, we are the first new infant formula manufacturer to be registered with the FDA in over 15 years and it's this unique approach that's enabled us to completely rewrite the formula to get closer than ever to breast milk. Um working with the leading experts and really being able to prove those benefits because we know when you're making a decision as important as what you feed your baby, you want real proof and evidence that you're giving them the best nutrition possible. I think your mission is even more admirable because we should note it took you five years to launch because the baby formula industry is so highly regulated. How difficult was it? Was it for you to get your product to market? And what do you think needs to be done to reduce the barriers to entry in this market, infant formula is the most highly regulated food in the world. If you're really going to innovate and bring a new product to market a new and better product, you need to run a clinical trial, you need to get FDA registration. I mean I'm happy that the barriers are so high because this is the most vulnerable population. We're feeding our babies um and supporting all of their most important developing systems in the first year of life. We had to really, we took a long path to market by choice because it was the only way to innovate. And I believe that um you know the 2.5 years that we worked with the F. D. A. Really enabled us to understand the barriers and we need to help more companies um to take that path to truly innovate to put highest quality nutrition on the shelf and we need to help give them a roadmap for how they do that because we should never again be in a situation where so many parents are struggling to find formula to feed their babies. We are only one of five manufacturers today in this country. And a long term solution to this shortage is to enable more manufacturers to build from ground up and to truly innovate and and create supply for our babies, wow one in five. That's astounding. And you just launched in March, what has it been like to launch during this shortage of baby formula? And what has it been like to meet the demand? Have you been able to do it? We launched in an unprecedented time in the industry when parents are more stressed than ever. I'm a mom of three. I have a one year old, I've been feeding my baby by heart. I'm in it myself. It's incredibly stressful um to ever feel like you may not have sole source nutrition for your baby. So we're really proud that at this time my heart can show up um, as only one of five manufacturers in this country with the highest quality nutrition. Um, and also show up as a partner to parents in this very stressful time. Um, as a direct to consumer brand. We speak to thousands of parents every day and we can be there for them. We saw the rate of new customers at launch spike differ 15 X. Our projections are launch was met with incredible demand and we sold into every state across America in the first six days of launch. So we really could have never anticipated how much demand there was right out of the gate. We really out of the gate, we were sprinting but luckily because we own our end to end, because we have complete oversight of our supply chain because we own our manufacturing, we've been able to make Several um investments and pull every lever possible to scale up very quickly the supply of our infant formula. We are making investments to significantly grow capacity that will allow us to feed over 500,000 more families than we even ever intended. We're doing things like moving at our manufacturing facility from a 24 5 scheduled to a 24 7. We're hiring relentlessly adding a whole new shift. The facility. We've newly committed more than $30 million in investment and manufacturing capabilities in our own manufacturer to continue to scale volume. We're adding new members to our sleepless Squad customer service team to make sure we're there for parents. So in all these ways only because we own our manufacturer, we able to really meet the overwhelming demand. Um, and really show up as a partner to parents at this time. The biden administration is flying, I believe the number is a million bottles worth of formula into the U. S. From around the world but it's still not enough. What else do you think can be done to ease this crisis and get more formula into the hands of parents? You mentioned just a bit earlier, um the barriers to entry in this market, they're well established and for good reason because this does feed our vulnerable populations, but at the same time we know this is a business model that's not sustainable. We participated in President biden's roundtable discussion. We were one of five manufacturers invited to join the conversation that was really about both short term and long term solutions to this crisis. The biden administration is doing everything they can in the short term to get formula on the shelves in the hands of parents. And those efforts are incredibly important. But again, we need to be able to feed our babies here in the US we need sustainable long term solutions. So I think it's all about incentivizing more manufacturers to do the hard work to invest in infrastructure right here in the US that also leads to high quality jobs um here in the US and can give our parents assurance that this will never happen again. So I think we need to be doing both what we're doing in the short term to import and get more in the hands of babies but also create a roadmap for how we can create more infrastructure in the US we've been lucky that Um governable of Pennsylvania um really invested and helped us to invest more in our infrastructure. Um by we just recently got investment of $10 million Pennsylvania and the more that we can support manufacturers to accelerate their efforts the better. But it's hard, it takes time the high barriers create um you know, create a lot of steps that we must take in order to meet that demand. And me, I also want to ask you of course, you describe the quality of your products. It sounds like it's of the highest quality. I don't have an infant but I would definitely want to go with my heart if I did you operate off of a subscription model and it makes it more expensive than other well known brands or legacy brands. So do you have plans to make the formula financially more accessible to families because we know this is a huge issue across the board. Regardless of where you sit economically. We worked really hard to bring the value of the infant formula product up significantly. We sourced every ingredient ourselves, we use the latest nutrition science to create a formula much closer to breast milk that supports all of baby systems. We are a whole new kind of easy digestion formula with clinical proof of those benefits but without soy and palm oil and corn syrup in many ways we've brought up the value of the ingredients and the nutrition and we created the highest quality product on the market and were able to make it available. Two parents at effectively parody pricing with the rest of the category. So our infant formula can is $39 for a large can of 680 g can. Um and when you look at that at a grand program basis, it's really a parody with the shelf and one of our cans, You only need five of our cans in one month versus 10-12 of other cans. So it's a much larger can and we feel really proud that because of the way that we built our company, we were able to offer this highest quality product at parity pricing. You're absolutely correct that infant formula is an expensive product. Um And so at the core of our company, we also have our openhearted initiative where we donate formula to families in need and when a parent joins are feeding plan subscription, they automatically help to contribute to that donation program to ensure that we're delivering highest quality nutrition to the most number of families. Mia Funt co founder and president of by heart. Thank you so much for joining us. Really appreciate the work that you're doing, especially for families right now