Instacart: Baby formula searches surging as store shelves remain empty

By Parija Kavilanz, CNN Business

Instacart said searches for baby formula hit a record high in mid-May but the on-demand grocery delivery site is struggling to fulfill orders because stores remain severely understocked amid the ongoing national formula shortage.

The company said searches for formula surged 245% week-over-week as of May 16.

At the same time, Instacart said its personal shoppers, who pick, pack and deliver orders, continue to encounter widespread shortages and that the rate at which they are able to find formula on store shelves has plummeted 52% since the beginning of May.

Instacart said it has seen an 80% jump in refunds during that period as a result. In most instances, its personal shoppers have not been able to fulfill requests for specific brands or acceptable replacements for them.

Enacting purchase limits

Although Instacart doesn’t hold any products in inventory itself, the company said that as of next week it will implement a purchase limit on formula to help more families get access to it.

Many of its retail partners already have similar or even stricter limits in place in stores, the company said.

In a single Instacart transaction, a customer would be able to purchase four containers of a specific formula and, if they need to, they can also purchase an additional four containers of a different formula product.

Instacart said its purchase limit is on top of any individual retailer’s imposed limits. If a retailer limit is stricter than Instacart’s, it will honor the retailer’s limit.

More baby formula is expected to arrive on store shelves as soon as this weekend through a variety of government efforts.

On Wednesday, 60 tons of formula landed at Dulles International Airport in Washington, DC from Ramstein Air Base in Germany, the second shipment from Europe as part of the Biden administration’s Operation Fly Formula.

That effort was initiated to address the nationwide shortage that was exacerbated by the closure of formula maker Abbott Nutrition’s Michigan plant in February after several inspections by the US Food and Drug Administration found “insanitary conditions.”

According to digital intelligence platform Similarweb, retailers started to see surges in demand for baby formula in the fall of 2021.

Similarweb Shopper Intelligence, which collects and synthesizes e-commerce datasets for leading retailers, tracked the pace of formula purchases at Amazon, Walmart and Target going back to last October. The pace of buying, it said, reached its highest level in April 2022, with Amazon, Walmart, and Target selling 110%, 134%, and 37% more units, respectively, compared to April 2021.

Abbott said Tuesday that it plans to restart work at its Sturgis, Mich., plant on June 4, with the first batches of new formula expected to be available to consumers on or around June 20. When the plant is up and running, the company will be able to increase capacity by 40%, according to Chris Calamari, who leads Abbott’s nutrition division.

–CNN’s Jen Christensen contributed to this report.

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