Perrigo has purchased Nestlé's Gateway infant formula plant in Eau Claire, Wisc., in addition to the U.S. and Canadian rights to the Good Start infant formula brand, for approximately $110 million. According to the deal, Perrigo will operate the Good Start infant formula brand in the U.S. and Canada, while Nestlé will continue to fulfil its existing Women Infants and Children (WIC) contracts, with Perrigo supplying product through the Gateway plant.
Perrigo is immediately investing $60 million to expand the Gateway facility’s current annual production capacity from 29 million lb to 36 million lb, an increase equivalent to 100 million more 8-oz bottles per year. The expansion is expected to be completed within the next 18 months.
The investments will not only expand and strengthen Perrigo’s U.S. infant formula manufacturing, it will increase consumer choice and access to safe, affordable infant formula for parents and caregivers. Perrigo already has Vermont and Ohio infant formula facilities, in each of which the company invests approximately $20 million every year to ensure a safe, high-quality supply of infant formula.
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“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.,” says 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.”
