Perrigo Company invests $170 million to expand and strengthen its U.S. infant formula manufacturing. As part of the investment, Perrigo has purchased Nestlé’s Gateway infant formula plant in Eau Claire, Wisconsin, along with the U.S. and Canadian rights to the Good Start infant formula brand.
Perrigo will invest $60 million to expand Gateway’s 29 million pound per year production capacity by seven million pounds, or more than 100 million more eight-ounce bottle equivalents per year, within 18 months, adding a total of 36 million pounds of capacity to Perrigo.
Prior to the Gateway plant purchase, Perrigo had insufficient capacity to meet consumer demand for its 17 store brand customers that sell infant formula at approximately a 50 per cent discount to the major national brands. With this added capacity, Perrigo can increase supply to these customers as well as support the Good Start brand in the U.S. and Canada by improving utilization and expanding capacity of the Gateway plant.
“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 Murray Kessler, president and CEO, Perrigo. “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.”
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 contracts, with Perrigo supplying product through the Gateway plant.
