Bobbie, the US infant-formula challenger business, has acquired peer Nature’s One for an undisclosed sum.
San Francisco-based Bobbie, which describes itself as the “only mom-founded and led” infant-formula business in the US, said the deal positions it as the “third-largest fully-integrated brand” in the country.
The company, which promotes its ‘European-style’ formula, is closing a $70m Series C funding round to acquire Nature’s One, led by a $35m investment by PowerPlant Partners. Bobbie’s funding has totalled $142m to date.
Nature’s One, headquartered in Ohio, claims to have introduced the first organic baby formula in the US in 1999. Its brands include Baby’s Only formulas and PediaSmart organic beverages.
Bobbie said the transaction will strengthen its domestic manufacturing capability by using Nature’s One’s newly-built facility, providing it with “end-to-end control of manufacturing from raw material sourcing to production and canning”.
It said it will continue to manufacture Nature’s One products under the Baby’s Only brand “for the foreseeable future”.
Laura Modi, Bobbie’s CEO and co-founder, said: “From inception, Bobbie’s mission has been centred around evolving the infant-formula industry and this acquisition is one of the biggest diversification moves in this very concentrated industry.
“There is no one better suited to help us pursue this vision than Nature’s One’s founder, Jay Highman, the godfather of organic formula – he revolutionised the industry decades ago with his dedication to purity, accessibility and safety and this best-in-class facility is no exception.”
Highman said: “Nature’s One takes great pride in our evidence-based approach from the ingredients, to the state-of-the-art facility, and the team that has spent years to ensure our formula is safe, nutritious, and accessible for families. By handing the keys to Bobbie, it helps grow our reach and carries forward our message of purity.”
Bobbie said Highman will remain a “strategic force” as executive director of Nature’s One and will now be a “key shareholder” in the combined entity, alongside Juggernaut Capital Partners, a majority investor in Nature’s One.
Soon after its launch in 2018, Bobbie was shaken by a Food and Drug Administration (FDA) crackdown and recall.
But it recovered to attract investment in oversubscribed funding rounds and says that it now has mothers across the country queuing up to join its subscription service, concerned by last year’s annus horribilis for the infant-formula category in the US which saw health scares and empty supermarket shelves linked to the closure of an Abbott Laboratories facility.
The crisis, which raised food security concerns, has led to investigations into the make-up of the US infant-formula industry and Abbott’s operations.
Modi told Just Food in April: “‘Formulagate’ revealed that the market was concentrated in so few hands. When a duopoly owns 90% of the market it leads to a crisis at some point. Even before the [Abbott Laboratories] recall it was going to happen because of the make-up of the industry.”
She added: “I’m in the full belief that the more new options we have the better.”
