DUBLIN — Perrigo Company plc has announced a $170 million strategic investment to expand and strengthen its infant formula manufacturing in the United States.
As part of the investment, Perrigo has purchased Nestlé’s Gateway infant formula plant in Eau Claire, Wisconsin. Perrigo also purchased the U.S. and Canadian rights to the Good Start infant formula brand.
Perrigo will also immediately invest $60 million to expand Gateway’s 29 million pound per year production capacity by more than 7 million pounds, or more than 100 million more 8-ounce bottle equivalents per year, within 18 months.
While Perrigo will operate the Good Start infant formula brand in the U.S. and Canada, Nestlé will continue to fulfil its existing Women Infants and Children (WIC) contracts to ensure that there is uninterrupted supply, with Perrigo supplying product through the Gateway plant.
“In making this decision, we prioritized ensuring parents and caregivers have continuity of a safe, high-quality supply of infant formula and providing a great home for our people. Perrigo was clearly the right choice,” said Tarun Malkani, CEO of Gerber, a Nestlé company. “This sale enables Gerber to pursue new growth opportunities and focus on what we are known for in the U.S. – our core baby food business, which includes purees, snacks, and cereals.”
“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 U.S.,” said Perrigo President and CEO Murray Kessler. “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 U.S., increases the availability of lower priced, high-quality infant formula to consumers, and delivers value to Perrigo shareholders.”
