Effects of United States WIC infant formula contracts on brand sales of infant formula and toddler milks

The United States (US) Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides free infant formula to low-income families with infants. State WIC agencies periodically solicit bids from manufacturers for the exclusive contract to provide infant formula in exchange for considerable rebates. Using Nielsen 2006-2015 retail scanner data, we estimated a difference-in-difference model to examine how winning a WIC infant formula contract affects sales of the new (winning) and former brands, including effects on sales of products not eligible for WIC (spillover). One year following a contract change, volume sales of WIC infant formula increased 322% (p < 0.01) for the new brand and decreased 77% (p < 0.01) for the former brand. Spillover effects included a 43% increase in sales of toddler milks for the new brand 2 years after the contract change. State WIC contracts allow manufacturers to market formula directly to consumers and may reduce breastfeeding policy effectiveness.