Perrigo acquires Nestle’s Good Start brand, Wisconsin facility to enhance infant formula capacity
Perrigo, an American Irish–registered over-the-counter pharmaceuticals manufacturer, will invest $170 million to expand and increase its infant formula manufacturing capacity and consumer choice in the US.
Under the first phase of investment, Perrigo has acquired Nestlé’s Gateway infant formula facility in Eau Claire, Wisconsin, apart from the US and Canadian rights to the Good Start infant formula brand.
Of the $170 million, Perrigo will also spend $60 million to increase Gateway’s production capacity to a total of 36 million pounds from the existing 29 million pounds per year, or over 100 million more 8-ounce bottle equivalents per year, in 18 months.
The enhanced capacity is expected to help Perrigo to meet consumer demand for its 17 store brand customers that sell infant formula, apart from sponsoring the Good Start brand in the US and Canada.
Murray Kessler — Perrigo President and CEO said: “Long before this year’s infant formula shortage, we had been pursuing options to increase capacity to meet growing demand for our infant formula in the US.
“But this year’s industry shortage galvanized our commitment to not only invest to meet the demand for our store brand and contract customers, but also to help prevent future infant formula shortages.
“The purchase and expansion of Gateway is the first major initiative in our recently announced Supply Chain Reinvention program.
“It solidifies our long-term manufacturing supply of infant formula in the US., increases the availability of lower priced, high-quality infant formula to consumers, and delivers value to Perrigo shareholders.”
Besides these investments, Perrigo invests around $20 million a year to ensure a safe supply of infant formula from its infant formula plants in Ohio and Vermont.
With Perrigo supplying products through the Gateway facility, Nestlé will ensure uninterrupted supply by delivering its existing Women Infants and Children (WIC) contracts.
Perrigo will, however, run the Good Start infant formula brand in the US and Canada.