Bubs Announces Trio Victory With 3 Signings, Launches Country’s First Organic Grass-Fed Formula

  • May 06, 2019 AEST
  • Team Kalkine
Bubs Announces Trio Victory With 3 Signings, Launches Country’s First Organic Grass-Fed Formula

Bubs Australia (ASX: BUB) deals with Australian made premium infant nutrition products. It is the leading producer of goat dairy products in Australia. Its products are sold in Australia and exported to China, South East Asia, and the Middle East. The company was founded in 2006, in Sydney.

The four key drivers for the company are innovation and product development, increased domestic market penetration, brand Awareness and Impact and enhanced Asian focus.

Bubs four key retail quadrants include the Australian domestic market, global Traders, cross-border eCommerce and China (offline).

On May 6 2019, the company announced that it has 3 new signings- a Joint Venture with Beingmate Baby & Child Food Co, a Strategic Partnership Agreement with Alibaba’s Tmall, equity linked alliance with CW Retail Pty Ltd, CW Management Pty Ltd, and CW Retail Services Pty Ltd (collectively Chemist Warehouse).

Beingmate Baby & Child Food Co., Ltd is China’s only infant and child nutrition focused business listed on the A-share market. On 6th March 2019, Bubs had informed the exchange about the setting up of a partnership with Beingmate China. Today, 6th May 2019, the company formalised the deal. The closing of the deal with Beingmate Baby & Child Food Co would ensure distribution and promotion of Bubs goat and organic cow milk infant formula and organic baby food products across Beingmate’s network of 30,000 Mother and Baby stores in China. Bubs Australia holds a 49% interest in this joint venture, set to run for an initial term of 10 years.

The second signing was the partnership with Alibaba’s Tmall. Alibaba operates globally and focusses on building the future infrastructure for commerce. Commenting of this new partnership, Alibaba Group’s MD for Australia and New Zealand Ms Maggie Zhou stated that the mother and baby category is amongst the best performing sectors for exports from Australia to China via Alibaba’s Tmall marketplace and this strategic partnership would accelerate business on this front.,

The last signing took place with Chemist Warehouse, which, by total sales is the country’s largest in the pharmacy chain market. The partnership with Bubs is its first investment in a listed entity. The Chairman and Co-Founder, Jack Gance also further highlighted that, after a great online service, the company is excited to expand in the offline markets as well.

Further, Bubs is all set to produce Bubs Organic®, Australia’s first organic grass-fed cow milk infant formula in partnership with Fonterra Australia. This advanced formulation would be inclusive of prebiotics and probiotics, Omega-3 DHA and Omega-6 ARA. The agreement runs for an initial term until 31 July 2021. Fonterra would be responsible to supply Bubs with organic milk powder, sourced from its pool in New Zealand.

Pending approval by SAMR, the formula may be physically distributed to China’s Mother and Baby stores. It will also be available in Chemist Warehouse pharmacies across Australia within 3 months.

Bubs had also announced another product launch- a new range of eight Bubs Organic toddler snacks on 18 March 2019. Both these launches prove the company’s significant advancement and optimistic strategic goal of increasing domestic market penetration through innovation.

In April the company released its March 2019 quarterly update. The revenue soared up 103% from pcp, standing at $11.83 million. The sales index had also improved significantly.

Stock Price Information:

On the technical front, the stock closed the day’s trade at A$1.475 as of 6th May 2019, and was up by 11.321% as compared to its previous day’s close. In the last six months, the stock has delivered a return of 134.31% while the YTD return stands better at 162.64%.


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