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Photo: Mario Tama via Getty Images

One of the most visceral experiences in anyone's life is conceiving and raising a baby, and some of the world's biggest companies revolve around an increasing parental obsession with getting the first couple of years right.

But now, one of the central businesses in infant care — the $7 billion-a-year U.S. baby food market — appears ripe for disruption by startups that are changing how business value is defined.

Driving the news: What is happening in baby food reflects the shift in retail, in which a new brand's value is increasingly not based purely on revenue, but on its reliable fan base — how much traffic it can bring a store at a time when shoppers are fickle.

Baby food has long been dominated by two brands: Gerber remains No. 1, and Beech-Nut is the second-biggest seller.

  • But a huge chunk of baby food consumption is homemade, experts say — a reflection of a mania for organic, fresh products and an increasing rejection of processed brands.
  • This is what has created a threat to the legacy brands. Because many parents simply don't have the time to prepare every meal for their babies, those wanting something fresh are open to upstart organic food brands that will do it for them.

Angela Sutherland is co-founder of Yumi, a California-based organic baby food startup that markets direct to consumers. Sutherland sends overnight shipments of freshly made baby foods to its clientele weekly.

  • In 2017, Sutherland and her partner raised $4.1 million in venture capital. Since then, she tells Axios, they have shipped about half a million jars of mixtures like banana with kale and black beans; kiwi combined with coconut milk, quinoa and banana; and standard spinach.
  • They are around $5 a jar, more or less double the cost of processed brands, depending on the type.
  • The business has grown by 30% month after month, Sutherland says, and has built a fanatical base of "megafans."

Sutherland says that big retailers have begun to circle the company in hopes of a distribution deal. "It shows how much retailers want brands with connection to a fan base," she says.

  • Kimberly Greenberger, an analyst with Morgan Stanley, agreed. To differentiate their merchandise from competitors, brick-and-mortar retailers today are looking to secure exclusive products. "The more exclusive and proprietary, the more the retailer can capture that consumer demand," she says.
  • "Something like baby food, where there is a monopoly or a duopoly — anything that disrupts that duopoly with a natural label will disrupt the market," Barbara Denham, chief economist at Reis, an analytics firm owned by Moody's, tells Axios.

Yumi is fulfilling two current market fads — making organic foods and shipping them to customers' doorsteps. The business is subscriber-based, and it tries to be highly customized, arriving in a box with a card listing nutritional studies validating a particular mixture of ingredients, Sutherland says.

"Now we ship to New York and the tri-state area. We are rolling out nationally this year," says Sutherland, a former investment banker. "We didn't realize how fast the business could grow."

Go deeper

Scoop: Gina Haspel threatened to resign over plan to install Kash Patel as CIA deputy

CIA Director Gina Haspel. Photo: Win McNamee/Getty Images

CIA Director Gina Haspel threatened to resign in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelation stunned national security officials and almost blew up the leadership of the world's most powerful spy agency. Only a series of coincidences — and last minute interventions from Vice President Mike Pence and White House counsel Pat Cipollone — stopped it.

Updated 7 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

John Weaver, Lincoln Project co-founder, acknowledges “inappropriate” messages

John Weaver aboard John McCain's campaign plane in February 2000. Photo: Robert Schmidt/AFP via Getty Images)

John Weaver, a veteran Republican operative who co-founded the Lincoln Project, declared in a statement to Axios on Friday that he sent “inappropriate,” sexually charged messages to multiple men.

  • “To the men I made uncomfortable through my messages that I viewed as consensual mutual conversations at the time: I am truly sorry. They were inappropriate and it was because of my failings that this discomfort was brought on you,” Weaver said.
  • “The truth is that I'm gay,” he added. “And that I have a wife and two kids who I love. My inability to reconcile those two truths has led to this agonizing place.”

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