Inside Bobbie’s growth strategy as it launches on Amazon & opens a new factory
Organic infant formula company Bobbie is experimenting with selling its supplement products on Amazon this summer, part of a growth strategy that dovetails with a new domestic supply chain operation.
Bobbie, founded in 2018, listed its new probiotic drops on Amazon in late June, and the company’s vitamin D booster will be added in the next few weeks. Sara Ahmed Holman, Bobbie’s chief commercial officer, told Modern Retail that part of the appeal of Amazon was being able to tap into shoppers who were proactively looking for a supplement-style product. But it’s also an operations play, given Amazon’s dominance as a logistics provider.
“Amazon has a superpower, and that is its massive tentacles into each and every zip code and area,” Ahmed Holman said. “As a DTC company, we’re not at that scale. For a mom who is experiencing something in the middle of the night, or walking out of a doctor’s office and realizing she needs it, we don’t have the ability to get it to her that day or the next day.”
Since it launched, every single paid order of the probiotic product has been made with Prime shipping, indicating that people are looking for a product they can get quickly. While the company declined to share how many units its sold, Amazon so far is making up about 3% of all sales.
Bobbie’s Amazon play comes at a time when the company has gone through some growing pains. Earlier this year, it started limiting new subscriptions in order to ensure it could meet its demand forecast. Then, over the past six weeks, Bobbie’s original formula has been out of stock at Target stores and online. Its gentle formula, available at 350 stores, is selling six times over the forecast as customers look for a replacement.
Yet the company is poised to meet growing demand, as its new manufacturing plant in Heath, Ohio, is online as of this week. The company estimates it will be able to triple its reach thanks to the production lines in the 90,000-square-foot facility that produces, dries and cans formula under one roof. It will continue using its co-manufacturing partner, Perrigo, and aims to serve about 15% of the non-WIC formula market. “We’ve never had a demand problem, we’ve only had a supply problem,” Ahmed Holman said.
Whether Bobbie would list its formula products on Amazon is an open question. Ahmed Holman said the company wouldn’t rule it out. Opening up the new facility could allow the brand to support more wholesale partners in the future, and the company anticipates adding more partners later this year. But overall, Bobbie’s expansion strategy will remain cautious and intentional, Ahmed Holman said. While she’s eager to get back in stock at Target, she doesn’t want to risk future out-of-stock events or jeopardize the subscribers who are counting on getting a box of formula cans at the door on a regular basis.
“It is our responsibility now, as one of the largest American infant formula companies, to make sure that we have continuity in our product and redundancy and resiliency,” she said. “But it is also one of our growing pains. “
“When you start to think about becoming omnichannel, there are a lot of different ways to do it. Some companies are epic, and they bulldoze into retail, and they go everywhere,” she said. “People have often said to me, ‘You guys are being too slow, and you should launch into more places.’ But it’s because we’re careful, we’re intentional and we’re thoughtful — and you’ll continue to see that with us.”
Juan Pellerano, chief marketing officer at e-commerce management platform Swap, advised that DTC brands look at a streamlined way to become an omnichannel business — whether that’s via a marketplace, wholesale partner or other avenues — if they want to scale. “The only way to survive in this environment is to be omnichannel,” he said. “While e-commerce is going to be increasingly important, you still need an omnichannel approach.”
Specifically with Amazon, Pellerano said that brands looking to expand can benefit from the awareness they’ll receive at a time when customer acquisition costs are high. That’s because people log onto Amazon with the intention of buying something, unlike when they’re simply scrolling through a social media feed looking for entertainment.
Pellerano also said that Amazon’s logistics network can be a powerful opportunity for brands to tap new markets, whether domestically or internationally. But he cautioned that brands should be aware of the many fees that come with listing, such as the warehouse fees, that could eat into margins. “Many brands don’t consider margin,” he said. “They’re like, ‘Great, I can enter a new market,’ but then they report back, and all of a sudden they’re upside down on sales.”
At Bobbie, Ahmed Holman said it made sense to launch with the supplement products because they may appeal to a wider audience of parents who don’t use formula.
“You want to partner with these retailers in a way that is really solving a very particular consumer experience and problem. That’s what we’re going to do with Amazon,” she said.