Bubs Australia turns around its goat milk infant formula sales to China

Sales of Aussie products into China have hit brick walls since the outbreak of Covid, but one company has broken barriers.

Bubs has reported record first half gross revenue, driven mainly by sales into China.

Goat milk infant formula manufacturer Bubs Australia has reported huge sales growth in the lucrative Chinese market.

Releasing its second quarter results today, the company said gross revenue from goat milk infant formula, organic cows milk infant formula and CapriLac adult milk powder in China had more than doubled from the previous corresponding period.

Bubs founder and chief executive Kristy Carr said a new Bubs Daigou 2.0 strategy to turn around sales in China had paid off during the Covid pandemic.

“Working alongside our strategic channel partner, AZ Global, we focused on enhancing channel engagement and campaign activation, whilst maintaining stabilised pricing and balanced fresh inventory levels,” Ms Carr said.

“This channel partnership has resulted in very strong daigou demand for both Bubs’ goat and organic grass-fed cows’ milk infant formula products — nearly quadrupling revenues over the previous corresponding period — as well as CapriLac adult milk powder nearly doubling revenue on the previous corresponding period.

“We continue to actively support the corporate daigou channel and are pleased to report revenues now exceed pre-pandemic levels.”

Cross-border e-commerce sales into China had also risen, with revenue from infant formula products 48 per cent higher than the previous quarter.

Bubs Australia said the expansion into the US market through online channels Amazon, Walmart and Thrive Market had helped boost revenue in that market by 66 per cent compared to the second quarter of 2020-21.

“Plans are well progressed to secure distribution into bricks and mortar retail outlets during the second half,” Ms Carr said.

Gross revenue from the domestic market rose by a much more modest 9 per cent from the previous quarter.

Overall, Bubs reported record first half gross revenue of $38.5 million and the company now had cash reserves of $30.6 million.

Bubs shares on the Australian Securities Exchange rose nearly 16 per cent on the back of the announcement but have now settled back to a rise of 7.9 per cent at 48 cents.

Peter Hemphill’s family holds shares in Bubs Australia.