Tornado Damages Warehouse, Disrupts Supply of Reckitt's Baby Formula

Reckitt's Mead Johnson baby formula supply is expected to be disrupted after a tornado hit a warehouse in Indiana, important for storing raw materials and finished goods. Employees are safe, and deliveries have been redirected, but short-term impacts are likely. Insurance will offset most financial losses.

Sales of Reckitt's Mead Johnson baby formula powder are anticipated to face short-term disruptions following a tornado that damaged a third-party warehouse in the United States, the British consumer goods firm announced on Wednesday. The affected Mount Vernon warehouse in Indiana, pivotal for Reckitt’s nutrition business, has been out of operation since the tornado struck on July 9, holding both raw materials and finished goods.

The company reported that all employees are unharmed and that deliveries have been rerouted to alternative warehouses across the U.S. A spokesperson indicated that some product varieties would likely experience short-term impacts but could not provide a timeline for when the facility would resume full operations.

Reckitt is working quickly with local authorities and regulators to minimize disruption and is utilizing its global supply chain and other U.S. warehouses to manage inventory. This isn't the first time Reckitt has had to navigate emergencies through its global supply network, as regulatory challenges with the FDA often cause delays. In 2022, amid a severe baby formula shortage, Reckitt flew 65 tons of formula from Singapore to Chicago and collaborated with the FDA to expedite product approvals from Mexico.

The company is confident that its property damage and business interruption insurance will cushion most of the financial blows from this incident, marking the third significant setback for Reckitt this year. Earlier, an investigation revealed under-reported liabilities in the Middle East, leading to a sharp stock drop, followed by another decline when a jury ordered its unit to pay $60 million due to a lawsuit related to its Enfamil brand. Reckitt's stocks had decreased by 21% by Wednesday morning.