Bubs China sales soar, despite tensions with Beijing

Bubs has unveiled a new weapon to promote its products as it breaks into vitamins and supplements, and as China sales soar.

Former Miss Universe Jennifer Hawkins is promoting the Bubs brand.

Chinese demand for products from infant nutrition company Bubs is continuing unabated, despite Beijing warning of potential sanctions on Australian goods amid fresh tensions between the two countries.

And the company has unveiled a new weapon — former face of Myer and Miss Universe Jennifer Hawkins — to further promote its brand as it enters the $2.3bn vitamins and supplements category after inking deals with Chemist Warehouse and Alibaba.

Bubs China direct sales soared 26 per cent in the three months ending June 30, representing 22 per cent of gross revenue for the quarter. Overall revenue jumped 32 per cent to $62m, an increase of $15m compared with the previous corresponding period.

It comes at a time when Australia’s relationship with China has reached a nadir, with Beijing warning that Australia could be punished with trade sanctions after it sided with the US in declaring China’s maritime claims in the South China Sea illegal.

But Bubs founder and chief executive Kristy Carr said the geopolitical war of words hadn’t affected consumer demand, with Chinese parents continuing their seemingly insatiable appetite for Bubs’ goat-milk-based infant formula and other products.

“From Bubs Australia point of view — particularly in the category we play in but also those established relationships we have in place — we are still very confident in our China strategy and the long-term focus for China to be our lead export market,” Ms Carr said.

“We have two strategic partnerships on the ground there that have been in place for some time with Alibaba … and Beingmate, which is a very large if not the largest domestic infant formula player in China.

“Our business relationships along with many customers in the Australian Chinese community really make up our entire revenue stream to China and our business relationships with those partners have never been stronger.” Nevertheless, Ms Carr said she was concerned about the trade tensions. “Many of us in the Australian business community would prefer foreign policy was separated from international trade.”

Already, China has slapped a punitive 80 per cent tariff on Australian barley and banned exports from four Queensland abattoirs.

“Australia hasn’t clearly thought about the consequences. The relationship between China and Australia has deteriorated to a very bad point, and the chance for a turnaround is slim in the near ­future,” the Chinese government mouthpiece, The Global Times, reported.

Bubs CEO Kristy Carr. Picture: David Geraghty

While Bubs’ main export market is China, Ms Carr said it was also expanding into other countries, launching in Vietnam last year, with plans to enter Hong Kong, Singapore and Malaysia as well as the Middle East across the United Arab Emirates, Saudia Arabia and Kuwait.

“All our top three markets demonstrated strong growth year-on-year, despite the very challenging conditions that prevailed throughout the second half across the entire sector in the wake of the COVID-19 global pandemic.

“Emerging export markets outside China were up 71 per cent on the prior corresponding period, driven largely by the successful launch of Bubs Infant Formula in Vietnam, now contributing 8 per cent of group revenue for the quarter.”

On Monday, Ms Carr said Bubs had entered into the vitamins and mineral supplements category via an agreement with Chemist Warehouse — its second-biggest shareholder — for its new Vita Bubs infant and children’s range. Ms Carr trademarked Vita Bubs five years ago and said the pandemic had accelerated the shift to the segment as more people focused on immune health.

Its vitamins range will be introduced across 400 Chemist Warehouse stores from October and be available on Alibaba.

“The move into the vitamin and mineral supplements category is consistent with our strategy to evolve into high margin adjacent categories where we know our end consumers and can leverage existing core competencies and brand reach across multiple children’s feeding and health settings.

“We expect the launch into Chemist Warehouse will add materially to our domestic revenue.”

And that’s where Jennifer Hawkins comes in. Bubs has signed her up to be its global brand ambassador for the next three years. Ms Hawkins said she was already using Bubs’ puree pouches to feed her baby daughter Frankie before entering into a partnership with the company.

“I currently breastfeed Frankie but will be (shifting) to toddler milk after her first birthday. The Bubs ethos of health nutrition and wellbeing perfectly aligns with my own values, which is why I am so happy and excited to take on this role,” Ms Hawkins said.