DESPERATELY scouring supermarket shelves could soon be a thing of the past for Australian parents, thanks to a revolutionary new business.
As courier Jay Edward watched the baby formula crisis unfold in 2015, he couldn’t help but wonder if he might be able to solve the problem that’s left Australian families unable to find a reliable supply for their young children.
Next month, he’ll put his theory to the test as he launches a new, subscription-based delivery service, aptly named FormulaHero.
Parents can sign up for weekly direct debits and have formula delivered every month, with flexibility to pause the service when needed.
Brands that have signed up include A2, Bellamy’s Organic, Aptimil, Karicare, Nutricia and Nestle Nan.
Early bird registrations opened three days ago, and while Mr Edward is still ironing out the kinks in his processes, he is confident that he’s got a workable solution.
Promising a “guaranteed supply” of formula, no delivery fees and cheaper prices on the most popular brands on the market, his final task before launching on February 1 is to lock in an iron-clad validation system and keep grey market exporters off his client list.
It’s these individuals who have wreaked havoc for formula retailers and their customers, clearing supermarket shelves and shipping the “white gold” by the pallet load overseas.
The tins are resold in China, at four times the price, to parents willing to pay a premium for the “clean and green” Australian product — rather than risk a repeat of the disastrous 2008 melamine contamination that saw six infants die and 54,000 babies hospitalised over tainted formula.
HOW DOES IT WORK?
It’s a challenge that retailers such as Woolworths has struggled with: How do you stop people from creating multiple accounts to exceed the can limit and send tonnes of the product to China?
And what is the appropriate can limit for a formula subscription, when some families have more than one little mouth to feed?
Bellamy’s has signed up for the service.Source:Supplied
These are the questions at the forefront of Mr Edwards’ mind.
As a start-up, FormulaHero doesn’t have the massive customer base that has made it tricky for the big supermarkets to monitor.
This challenge was illustrated by the unfortunate case of Sydney dad Adrian Cheng who was banned from Woolworths’ online shopping platform without warning, along with several other people of Asian heritage.
It is hoped that FormulaHero will be able to avoid these pitfalls through dialogue with customers.
“Our aim is to be as accommodating as we can, but we’ve also got to be realistic,” he said.
Going off the assumption that six to eight cans will feed a baby or toddler for a month, Mr Edwards acknowledged that this did not account for multiple children.
In these cases, he said, “we’re looking at how we can verify that.”
One idea on the cards is asking customers to submit a copy of their Medicare cards, showing their children’s names. Mr Edward is seeking advice on whether this would comply with privacy laws.
STOPPING FRAUDSTERS
When it comes to detecting fraud, he said, “We’ve got the benefit of technology on our side. We can see who’s ordered what from what suburb, whether there are multiple orders from the same house, or from the same computer but to different addresses.
“The suspect ones are going to be the ones where we go ‘okay, we need a bit more info here’ and maybe ask for a Medicare card’.”
Multiple accounts with similar names was another red flag, he said — although this appears to be what caused the unfortunate case of Mr Cheng.
If the system works, it will certainly be a great relief to families hit by formula shortages, which have peaked over the last six months.
Supermarkets have blamed suppliers for failing to keep up with demand, while suppliers say the fault lies with retailers’ systems.
Retailers have imposed limits ranging from two to eight cans per transaction, with Woolworths adjusting the notice on its online shop to warn that its four-can limit is per customer, not just per transaction.
News of the FormulaHero launch comes as Blackmores prepares to unveil its new line of baby formula, which has just started taking presale orders.
Blackmores’ limit for online orders will be two tins per day to a maximum of four per week.
dana.mccauley@news.com.au
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