Laura Modi, co-founder and CEO of infant formula startup Bobbie, is on a mission to rework an industry that she says has been stagnant for many years, and shift the culture around how parents feed their babies.
Modi, a former Airbnb executive, got here up with the thought for Bobbie after the birth of her first child.
“I remember walking right into a pharmacy buying infant formula and hoping that they might give me a bag that you simply couldn’t see through it, because I felt so embarrassed concerning the product that I used to be buying,” Modi recalls in a brand new episode of the “CNBC Changemakers and Power Players” podcast with CNBC’s Julia Boorstin.Â
Modi was named to the inaugural CNBC Changemakers list in 2024.
It wasn’t just the emotional features of the patron transaction that motivated Modi, however the proven fact that the product itself was a sign of a market proof against change.
“Granola bars have modified, bags of chips, sodas, but yet, a product as essential as infant formula was still the identical as what I had 40 years before that,” Modi says.
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Infant formula is an enormous market, and a classic example of a market where incumbents haven’t been incentivized by competition to innovate, in keeping with Modi.
A report from the Federal Trade Commission in 2022, when a nationwide shortage of formula occurred, highlighted the risks of what has long been seen as a duopoly market. The 2 firms that dominate infant formula production within the U.S. are Reckitt and Abbott, with a combined market share based on government contracts estimated at nearly 70% in 2022 (that’s down from over 80% in 2008). The market share is estimated to be even higher when including non-government sales. Nestle and Perrigo even have been distinguished formula providers — Perrigo bought Nestle’s U.S. and Canada-based formula business in 2022, and has a co-manufacturing relationship with Bobbie.
It was Abbott’s formula manufacturing shutdown in 2022 after a recall that led to renewed focus in the marketplace concentration risk.
“I believe all of us took with no consideration that this can be a commodity. It’s infant formula. It should just be available,” Modi says. “When the president was saying, ‘America cannot feed babies,’ you begin to unpack it.”
Bobbie, which Modi co-founded in 2018, has quickly gained traction by specializing in product quality — in April, Bobbie introduced the primary and only USDA Organic Whole Milk infant formula manufactured within the U.S. — and a mission-aligned business philosophy, including a campaign featuring celebrities advocating for paid family leave.
“Don’t sell the product,” Modi says of the marketing message. “Fight for paid leave and at the tip of the segment or at the tip of the ad, why don’t you place up a phone number to get people to call their representative in order that they’ll explain why paid leave is required, why we want to fight for the Black maternal mortality crisis, why child care costs are through the roof. We have a look at the problems that surround what that parent truly cares about, and we are saying, ‘Let’s get it billboard-grabbing attention on the problem that somebody desires to fight for,’ versus the product itself. If you will have the most effective product, they’ll come to you,” she adds.
Bobbie’s initial products hit the market in 2021 as the primary direct-to-consumer, subscription-based infant formula within the U.S, and at the moment are available from Goal to Costco to Whole Foods.
Executing on a social mission hasn’t come without being drawn into politics. Modi recently was on the receiving end of backlash from some customers after she joined a federal roundtable with among the biggest manufactures of baby formula organized by the federal government and was photographed with controversial Secretary of Health and Human Services Robert F. Kennedy, Jr.
“Yes, it happens to be that the present administration comes with some polarizing perspectives, and after I received the phone call to say you’re being invited right into a roundtable conversation around the longer term of your industry, and the remainder of the CEOs of the infant formula space, who all occur to be men, may also be in that room, you higher consider I took that invite, and I took that invite because if I didn’t my voice and the voice of moms and the voice of our community or the subsequent generation, was going to be missing from that table,” Modi tells CNBC. “The general intention is to enhance the industry, no matter who’s in seat.”
Balancing advocacy with the realities of running a startup and raising 4 children requires discipline. Modi says she relies on a nightly “personal and skilled check-in,” which consists of her rating her day on a scale of 1 to 5. She also tells CNBC concerning the pretty “strict” shared calendar the family keeps for each member.
In an industry where supply chain resiliency became a significant national news story, Modi says it stays integrally linked to her biggest challenge. Bobbie began producing formula at a significant manufacturing plant in Ohio it built from the bottom up last yr, a move Modi says is critical for safety and stability.
“The largest challenge is this can be a highly regulated, really pharmaceutical grade product, and while it sits on the shelf in some ways as a consumer packaged goods product, you will not find a way to enter a store and find every other product that is actually the choice to something that the human body makes as the only nutrition for the youngest audience,” she says. “We’ve got moved very fast, change into the fastest-growing infant formula company. It is a decade of nurturing, nurturing the security of it, the standard of it, continuing to take a position back into it.”
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