The Wall Street Journal - Friday, 8/19/66

Formulas for Success: Firms Find a Market For Baby-Milk Delivery

Mothers, Hospitals Laud Plan; 'Best Since Diaper Service'; For Some: Coca-Cola & Jell-o

-By Philip C. Hauck, Staff Reporter of The Wall Street Journal

CHICAGO - Burp!

That's the nearly unanimous' endorsement from customers of Alan M. Baskin. The chorus is such a resounding vote of confidence, he figures, that he plans to bring his service to 20 other cities.

Mr. Baskin is owner, founder and president of National Baby's Formula Service, Inc., one of a small but growing number of companies that provide ready-to-gurgle baby formulas to hospitals and homes across the country.

"It's the greatest thing since diaper service," says Mrs. Nancy Considine, a mother of nine in suburban Winnetka. Adds Mrs. Virginia Geroulis of Oak Park: "It saves a good hour each day, and you don't have to worry about the other kids pulling the sterilizer over."

Whatever the Doctor Orders

The services provide whatever the doctor orders. Mr. Baskin's company currently bottles 156 different kinds of formulas in a choice of three bottles and six nipples. They include Coca-Cola and strawberry Jell-O concoctions that combat diarrhea, a goat's milk formula for babies allergic to cow's milk and a formula that uses natural mother's milk.

The Chicago company also recently mixed a guava root tea formula - after some scurrying to find the exotic material. It had been ordered for a sick baby by a Filipino doctor here.

It's not known how many babies are using factory-mixed formulas at present, but the number is sizable. A San Francisco service supplies 70 of the area's 80 largest hospitals, and Mr. Baskin's Chicago operation filled 2 million bottles in the first five months of this year. There are services, mainly for hospitals, in at least 11 other cities.

The service costs hospitals about 14 1/2 cents a bottle, according to Chicago hospital figures. Administrators of Michael Reese Hospital here say their formula expenses have been halved - to $30,000 a year from $60,000 - since they subscribed to the service.

Costlier for Homes

"We've freed nurses for other duties, turned our old formula room into a laboratory research area and obtained a safety factor no doubt greater than we could provide," says Ernest R. Blomquist, director of purchasing for Presbyterian-St. Luke's Hospital here. He says the formula room had been "kind of a headache operation" anyway.

For homes, the service is costlier - about $1 a day, compared with about 35 cents a day for home-made formulas or proprietary formulas and 65 cents a day for canned, ready-to-drink formulas. Mr. Baskin launched his home-delivery service in January and has fed about 1,000 babies since then. He currently serves 200 homes, and contends "it is catching on now." The formulas are delivered by a local dairy. Every batch of the sterilized formulas is checked by city and state health authorities before being bottled.

Mr. Baskin, now 36 years old, got into the formula-mixing business eight years ago when a visiting aunt, frustrated with her attempts to make formula at 2 a.m., cried, "I'll give $20 to anyone who will make my formula." He made it, and was in business.

He shortly quit his job as a CBS correspondent in California (earlier, at age 16, he was a script writer for Let's Pretend) and went into the formula business full-time. He started a pilot operation in Miami in 1958, and set up his Chicago company in 1963.

The Late Night Rescue

His previous formula making experience had been limited to his late-night rescue of his aunt and some bouts in preparing formulas for his two oldest children, daughters now 12 and 10. "Yes, he and Naomi (Mrs. Baskin) often got frustrated in making the stuff," recalls his mother. His two youngest children, one 3 years old and the other 16 months, have benefited from the service.

Ms. Baskin plans to open a franchised operation in Toronto this month and others in Detroit, Cleveland, Cincinnati and Pittsburgh within the next two years, Eventually, he plans to go into at least 15 other cities.

He has other plans, too. He hopes to market a full line of baby products and special formulas for the geriatric crowd ("womb to tomb service," quips Mr. Baskin). And, noting that the animal research center of one hospital is feeding his formula to baby monkeys, he is intrigued by that market, too.

The business has some drawbacks, however. "Just to survive, you need a large share of the market to gain the required economies - mainly in production and deliveries," says Paul Oreal, general mamanger of the San Francisco service.