Consumer Discretionary

US baby formula shortage accelerates Bubs distribution a year ahead of schedule

Fri 10 Jun 22, 10:25am (AEST)
Infant Formula Baby Formula A2M 1

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Key Points

  • Two major US baby formula retailers will be purchasing and distributing Bubs products
  • This will expand Bubs' retail footprint to over 4,000 stores across 35 States
  • In February, Bubs said it was targeting 3,000 retail touchpoints by the end of 2022

The US baby formula crisis has accelerated the mainstream distribution and in-store penetration of Bubs (ASX: BUB) products across the states. 

Bubs said that its first chartered air cargo flight operated under the US Government’s ‘Fly Formula Mission’ will be purchased by two major US infant formula retailers - The Kroger CO and Albertsons Companies.

“This significant expansion of our retail footprint to over 4,000 stores across 35 States is a truly exciting development. Bubs will be the only Australian made infant formula available for sale in the USA,” said CEO, Kristy Carr. 

Six new lines of baby formula products alongside the existing two Aussie Bubs Toddler Formula products are expected to hit the shelf starting 20 June 2022. 

Carr said there were no issues with Bubs’ capabilities in fulfilling Australian retailers and export markets orders, and the company has not yet experienced any volatility or supply disruption as a result of the US infant formula shortage. 

Previously, Bubs reaffirmed that its 100% owned FDA registered production facility is capable of  tripling its current 10m tin annual capacity.

The commitment to the Biden Administration was for at least 1.25m tins.

Ahead of schedule

During February reporting season, Bubs outlined its US distribution plans, hoping to reach 3,000 of the potential 63,000 retail touchpoints in 2022.

The company was expecting around 177 retail store locations in March, and expand that to around 1,000 by June.

Bubs retail footprint is now over 4,000.

Bubs share price is up 68.72% over 1 year and opened 4.20% higher at the open today.

2022-06-10 10 06 18-Bubs Australia Ltd (ASX BUB) Share Price - Market Index
Bubs share price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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