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Dollars and Cents

The Dollars and Cents of Infant Formula

The Economics of (Not) Breastfeeding

  • Formula feeding costs between $800 and $2800 per year.[1] Breastfeeding saves families the cost of formula, as well as potential healthcare fees for infants that do not reap the health benefits of breast milk.
  • The brand name formulas that are distributed in hospital “discharge bags” are up to 66 percent more expensive than store brands. But mothers who start using one brand of formula are likely to stick with it in the long run, making formula samples far from “free.”[2] If they continue using the brand name formulas given for “free” in discharge bags, it will cost at least $700 extra per year.[3]
  • The cost savings to the U.S. economy if more parents were to breastfeed their babies would be significant. One study found that if 90 percent of families in the United States breastfed babies exclusively for six months, savings could amount to $13 billion. If 80 percent of families met the six month exclusive breastfeeding goal, $10.5 billion could be saved.[4]

The Infant Formula Industry: Big Bucks


  • In 2007, the U.S. infant formula market accounted for $3.5 billion in sales.[5]
  • As of 2004, annual formula company expenditures for TV, print, and radio ads was $46 million.[6]
  • In 2008, three companies make up 98 percent of the market share: Abbott (Similac) at 43 percent, Mead Johnson (Enfamil) at 40 percent, and Nestle (Gerber Good Start) at 15 percent.[7]
  • Abbott is a major pharmaceutical company. Mead Johnson, once a subsidiary of pharmaceutical giant Bristol Meyers Squibb, is now an independent entity. Nestle is the world’s largest food company. Check out what else these companies make.


[1] Calculations based on prices of store brand and name brand formulas at Walgreens.com in November 2011 and average consumption of 30 oz. of formula per day.

[2] Reiff, Michael I., and Susan M. Essock-Vitale. “Hospital Influences on Early Infant-Feeding Practices.”Pediatrics 76, no. 6 (1985): 872-79.

[3] Ban the Bags. “Ban the Bags Tool Kit.” Retrieved 6 February 2012, from http://www.banthebags.org/.

[4] Bartick, Melissa, and Arnold Reinhold. “The Burden of Suboptimal Breastfeeding in the United States: A Pediatric Cost Analysis.” Pediatrics 125, no. 5 (2010): e1048-e56.

[5] Oliveira, Victor, Elizabeth Frazao, and David Smallwood. “The Infant Formula Market: Consequences of a Change in the Wic Contract Brand.” United States Department of Agriculture, Economic Research Service. Retrieved 9 March, 2012, from http://www.ers.usda.gov/Publications/ERR124/ERR124.pdf.

[6] United States Government Accountability Office. “Breastfeeding: Some Strategies Used to Market Infant Formula May Discourage Breastfeeding; State Contracts Should Better Protect against Misuse of Wic Name.” Retrieved 12 March, 2012, from http://gao.gov/assets/250/249027.pdf.

[7] Oliveira, Frazao, and Smallwood, “The Infant Formula Market: Consequences of a Change in the Wic Contract Brand.”