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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

Updated 4 mins ago - Politics & Policy

Reports: Supreme Court Justice Stephen Breyer to retire

Justice Stephen Breyer. Photo: MANDEL NGAN / AFP via Getty Images

Supreme Court Justice Stephen Breyer will retire, NBC news first reported and multiple outlets confirmed on Wednesday, giving President Biden his first — and maybe only — chance to put a stamp on the high court.

What’s next: Appointing a new Supreme Court justice will be one of the longest-lasting pieces of Biden’s legacy — and could give Democrats a jolt of energy ahead of next year's midterms.

29 mins ago - Science

Blizzard likely to hit New England this weekend as "bomb cyclone" forms

Computer model projection of the precipitation and wind field from the weekend storm in the Northeast. (Earth.nullschool.net)

A powerful blizzard is likely to strike parts of New England and the Mid-Atlantic beginning Friday and lasting into the weekend, with snow totals that are likely to be measured in feet.

The big picture: The joining of weather systems embedded in both the polar, or northern branch, of the jet stream and the southern branch is projected to create a bomb cyclone. Such storms undergo a process known as bombogenesis, with their minimum central air pressure readings plunging at least 24 millibars in 24 hours.

Schools desperate for substitute teachers

Illustration: Eniola Odetunde/Axios

School districts and officials nationwide are begging parents to step in, loosening requirements for substitute teachers and, in one case, asking the National Guard for help as last-ditch efforts to stay open amid the latest COVID-19 surge.

Why it matters: Substitute teachers have emerged as a vital part of schools' reopening efforts, but they are in short supply after years of being overlooked and undervalued.

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