Bubs Australia sales leap 90 per cent

Bubs AustraliaSpecialty infant formula maker Bubs Australia has reported record quarterly sales of about $9 million for the first quarter of 2019, up 416 per cent from the same period last year.

The growth was driven by increased sales via Coles and Woolworths, as well as China’s ‘daigou’ and cross-border e-commerce channels. Sales of Bubs products are up 90 per cent year-on-year and up 26 per cent on the previous quarter.

Infant Formula is up 82 per cent and organic baby food up 57 per cent on the same period last year.

Bubs Australia founder and CEO Kristy Carr said that she remains confident in the company’s strategic direction.

“Over the last 12 months Bubs product portfolio has gained significant traction in domestic and international markets, including securing several key new distribution channels and successfully implementing new product launches.

“We are particularly pleased with the strong growth in our domestic business, with ranging in more than 2,500 Australian retail touchpoints across our full product portfolio, including Coles, Woolworths, Big W, Costco, Aldi, IGA, Chemist Warehouse, and other pharmacy chains. Domestic sales currently account for around 82% of total revenue as we are seeing strong positive momentum in consumer off-take in-store.”

Carr said that the company has expanded supply chain capability since the acquisition of NuLac Foods. Bubs milk pool now exceeds 13 million litres per year. During the quarter, the company decided to prioritise the increase in herd size over milk production to take ongoing capacity to a significantly higher level.

“The strategic value of the NuLac Foods acquisition is undiminished as Bubs continues to be the only vertically integrated producer of goat milk formula in Australia, offering product traceability from the farm gate to the point of sale. Importantly, the integration of the NuLac Foods business and optimisation of product lines has moved to the point where further integration operational costs are expected to be minimal,” Carr said.

Carr said that China’s cross-border eCommerce continues to develop and sees great potential in this channel. The company has started to see the benefits of partnerships with New Times Asia, JD.com and Alibaba, and has made its first shipments to HiPac, servicing the O2O (Online to Offline) Mother and Baby store channel.

Bubs Organic baby food products are being rolled out into physical mother and baby stores throughout China, including major Key Accounts in top tier cities, with plans to distribute to 5,000 stores in FY19.

Bubs is continuing to pursue its application for China registration, having entered a long term agreement with Australia Deloraine Dairy, to enable the export of Bubs infant formula to physical stores in China.

“Having achieved our intermediate goals, we are making solid progress toward our strategic goal of becoming a prominent brand in the premium infant nutrition segments both here and overseas, with a key focus on China, as well as planning our entry into other markets in South East Asia with growing consumer demand for the products in our portfolio,” Carr added.

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