Bubs (ASX:BUB) signs new deals with US companies, shares gain

Australian infant nutrition and dairy specialist Bubs Australia Limited (ASX:BUB) has signed new supply agreements with a couple of US-based retailer banner groups, according to an ASX filing on Monday (4 July 2022).

Post the agreements, the company's shares gained 3.26% and were trading at AU$0.64 apiece on ASX at 11.46 AM AEST. This outperforms ASX 200 Index, which was 1.24% up at 6,620.70 points at 11.47 AM AEST.

Notably, Bubs infant formula has tariff concession and WIC program authorisation. Over 50% of the formula used in the USA comes from the Special Supplement Nutrition Program for Women, Infants, and Children (WIC Program), which the US government runs. The WIC Program offers financial aid to American families who need it to ensure that the women, babies, and children are properly nourished.

What is Bubs’ new agreemtns with US agencies?

Bubs has signed new agreements with US-based Meijer and H-E-B Grocery Company. The move is in anticipation of Operation Fly Formula's Plane #4, which will arrive shortly and carry about 90,000 tins with an estimated gross income of around AU$3.0 million.

H-E-B Grocery Company

H-E-B is a Texas-based supermarket chain which has its operations across the US. In 2020, Texas saw more than 365,000 births compared to 300,000 in all of Australia. The State has a stock shortage of infant food items and is the main target for the distribution roll-out.

Meijer

The Meijer chain of American supercentres has 259 locations, most of which are in the Midwest states of Michigan, Illinois, Indiana, Kentucky, Ohio, and Wisconsin.

The remaining products from the air shipment will be given away to restock current stockists like Walmart, Kroger, and ABSCO.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 04 July 2022

California, which had the most births overall in 2020 with over 419,000, had 22 State agencies that have authorised Bubs® Infant Formula products under the WIC Program.

Source: © Sisterspro | Megapixl.com

On 28 June 2022, Bubs entered into a new supply agreement with Target USA, which is considered as one of the largest infant formula retailers in the US. It is to be noted that Target USA has more than 1,934 stores.

Post deal, products for Bubs® Infant Formula are now offered by the four biggest baby formula retailers in the US, with coverage in 5,000 locations across 34 states.