Investment

Gates’ Investment in Startup Firm Is Not Related to Baby Formula Shortage

A fund backed by Bill Gates has invested in a startup working to develop lab-manufactured breast milk, but it won’t reach the market for several years. Yet, social media posts make baseless claims that Gates is behind the current baby formula shortage — which stems from supply-chain issues and the shutdown at a major manufacturing plant.

Breakthrough Energy Ventures, a fund backed by Bill Gates that invests in climate-friendly technologies, in 2020 led a $3.5 million round of financing for BIOMILQ, a startup working on reproducing human breast milk using mammary cells.

The company’s product hasn’t yet made it to market — a June 2021 blog post noted that “we’re only in our first trimester.”

But the two-year-old investment is being cited in social media posts to make unfounded claims that Gates engineered the current baby formula shortage because he is invested in a rival product.

The shortage is actually due to supply-chain constraints exacerbated by a major manufacturer’s recall and plant shutdown, as we’ve reported, and there’s no evidence Gates or Breakthrough Energy Ventures is related to it.

Breakthrough “invested in BIOMILQ as a low-carbon alternative to dairy production,” a company spokesperson told FactCheck.org in an email. The claim that the fund is behind the formula shortage “is false,” she said.

CNN, in a report earlier this month, said BIOMILQ is at least three years away from commercial availability.

Gates is chair of Breakthrough Energy Ventures, which counts high-profile investors Jeff Bezos, Richard Branson and Michael Bloomberg among its board members. The fund is part of Breakthrough Energy, which funds technologies with the goal of reaching net-zero emissions by 2050.

A frequent target of conspiracy theories, Gates is again being falsely blamed for a national crisis.

One tweet said Gates “has been investing heavily in synthetic soy breast milk.” The tweet, from an account called LivePDDave, goes on to ask two leading questions: “He wouldn’t have anything to do with the baby formula shortage, would he? Create a problem (like Covid) and then step in with a ‘solution’?” The second question could be a reference to any number of false claims about Gates, including the debunked claim that he plotted to create the pandemic in order to depopulate the world through vaccines.

The baby formula claim is also making the rounds on Facebook, with one post falsely claiming Gates has already opened a “synthetic breastmilk plant.” 

Another widely shared post misleadingly questions the timing of events. “Pfizer says do not breast feed. Baby formula runs scarce. Bill Gates promotes new artificial breast milk technology. All within 2 weeks.”

Conservative commentator Candace Owens repeated the claim. “Doesn’t Bill Gates have the best luck?” she tweeted. “Just like with the COVID vaccine — he makes an investment, and then suddenly there is a pandemic or shortage and everyone must line up for his product. Of course he’s invested in lab breast milk!”

But as we’ve written, the U.S. shortage of baby formula has been driven largely by a product recall and subsequent plant shutdown by Abbott Nutrition, a major manufacturer of formula, and ongoing supply-chain issues exacerbated by the COVID-19 pandemic, according to experts.

Abbott Plant Cleared to Restart

Abbott said on May 16 that it reached an agreement with the Food and Drug Administration to take steps to resume production, and formula shipments could resume six to eight weeks later. House Democrats, meanwhile, introduced legislation that would provide $28 million to help the FDA boost staffing and avoid future shortages.

Abbott in a May 13 blog post acknowledged its role in the baby formula shortage. “We know that the recall has worsened the industry-wide infant formula shortage, and we have been working to get as much product into the hands of parents as we can,” the company said. Abbott said it has shipped “millions of cans” from a facility in Ireland as it works to address FDA concerns and restart operations at the Michigan plant.

The nationwide out-of-stock percentage for baby formula stood at 43% in the week ended May 8, up from 2% to 8% in the first half of 2021, according to pricing provider Datasembly. At the end of April, the figure was 40%.

‘Perfect Storm’ Created Crisis

The shortage is the result of a “perfect storm of multiple factors,” said Jason Miller, associate professor of logistics at Michigan State University’s Eli Broad College of Business.

Only a handful of plants in the U.S. make baby formula, with four companies accounting for about 45% of industry shipments, Miller told us in a phone interview, citing government data. That means “any large plant shutting down causes issues.”

Moreover, “these plants turn inventory very quickly,” so there’s not much stock on hand in the event something happens, Miller said. Once people realized there was a shortage of formula, there was probably some “hoarding,” similar to the toilet-paper situation in the early days of the pandemic, he said. “All of a sudden, you have a recipe for shortfalls like we’re seeing,” he said.

The shortage is likely to last awhile even after the Abbott plant reopens, Miller said. “Americans have to understand this isn’t a product you just throw in a vat and magically it’s produced in two hours,” he said. “There are numerous quality checks conducted repeatedly.”

Editor’s note: FactCheck.org is one of several organizations working with Facebook to debunk misinformation shared on social media. Our previous stories can be found here. Facebook has no control over our editorial content.

Sources

Roy, Aditi. “Altbreastmilk company Biomilq raises $3.5 million from Bill Gates’ investment firm.” CNBC. 16 Jun 2020.

Breakthrough Energy Ventures press office. Email to FactCheck.org, 17 May 2022.

Chan, Milly. “Lab-grown ‘Human Milk’ May Be Just Three Years Away.” CNN. 3 May 2022.

Fichera, Angelo. “Video Targets Gates With Old Clip, Misleading Edit.” FactCheck.org. 5 Mar 2021.

Fichera, Angelo. “New Coronavirus Wasn’t ‘Predicted’ in Simulation.” FactCheck.org. 29 Jan 2020.

Datasembly. Press release. “Nation-wide Out-Of-Stock is now at 43% for the week ending May 8th.” 10 May 2022.

Abbott Labs. Press release. “Abbott Enters Into Consent Decree With U.S. Food and Drug Administration for Its Sturgis, Mich., Plant; Agreement Creates Pathway to Reopen Facility.” 17 May 2022.

House Appropriations Committee. Legislation. “Making emergency supplemental appropriations to address the shortage of infant formula in the United States for the fiscal year ending September 30, 2022, and for other purposes.” 17 May 2022.

 Abbott Labs. Newsroom: Nutrition, Health and Wellness. “Abbott Provides Infant Formula Update.” 13 May 2022. 

 Reuters Fact Check. “Fact Check-Bill Gates Investment in Lab-Produced Breast Milk Company is Unrelated to Baby Formula Shortage, Contrary to Posts Online.” 13 May 2022.

 Miller, Jason. Associate professor of logistics, department of supply chain management, Michigan State University Eli Broad College of Business. Phone interview with FactCheck.org. 17 May 2022.

 Whyte, Liz Essley. “FDA Eases Baby-Formula Import Rules to Boost Supplies.” Wall Street Journal. 16 May 2022.

 

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