Strong growth in Australia and the US for Bubs Australia was offset by China’s Covid-zero policy, which it has recently abandoned.
Snapshot
- 1H23 Group Gross Revenue: $37.9m, down 1% pcp;
- 1H23 Group Gross Revenue for branded products (excl. B2B and bulk powder sales): $36.5m, up 16% pcp;
- Q2 Group Gross Revenue: $14.3m, down 28% pcp;
- Australian retail Q2 Gross Revenue up 28% pcp and 1H23 up 23% pcp, with Bubs Infant Formula sales growing at nearly 7 times the market growth rate;
- China Q2 Gross Revenue down 66% pcp as prolonged COVID lockdowns caused significant disruption;
- International Q2 Gross Revenue (inc. USA) up 26% pcp, and 1H23 up 93% pcp;
- U.S. permanent regulatory pathway confirmed with FDA ‘Letter of Acknowledgement’ received finalised definitive agreements with China JV partner and lodgement of SAMR submission for Bubs China Label Infant Formula under the new GB standards, providing a regulatory pathway into General Trade; and
- Bubs awarded ‘2022 Australian Exporter of the Year’ at 60th Australian Export Awards.
“Bubs’ domestic growth momentum continued with quarterly gross revenue up 28 per cent compared to the same period last year. Bubs has consolidated its leadership position in the goat infant formula segment, now representing 58 per cent of the total goat formula market in Australia,” CEO and founder Kristy Carr said.
“China’s prolonged lockdowns during the quarter delayed our transition to Bubs’ new ‘Manufacturer to Consumer‘ (M2C) model in partnership with AZ Global (Bub’s main corporate daigou partner), as we continue to sell through initial pipe-fill orders from previous quarters, leading to a 66 percent fall in gross revenues compared to the prior corresponding period.
“Nonetheless, the impact on group gross revenues from infant formula was limited to 10 percent for the quarter compared to the prior corresponding period, and strong pricing discipline was maintained across all markets,” she added.
Brighter news came from the US, with the Food and Drugs Administration (FDA) confirming Bubs’ permanent regulatory pathway into the country. To date the company has sent more than one million tins of formula to the country.
The company said it has, “undeniably put goat infant formula on the map in the United States. The goat milk segment has grown from US$90,000 to US$2.7 million in the last 26 weeks, of which 94 per cent has been supplied by Bubs.”
Carr said with China’s borders reopening, Bubs expects to see the growth rate accelerate for the country in the second half.
PERFORMANCE BY CHANNEL [Q2 gross revenue]
- Australia: up 28% pcp, contributing 42% of quarterly sales;
- International (inc. USA): up 26% pcp, contributing 30% of quarterly sales; and
- China: down 66% pcp, contributing 28% of quarterly sales.
PERFORMANCE BY CATEGORY [Q2 gross revenue]
- Bubs portfolio: down 10% pcp, contributing 81% of quarterly sales;
- Adult goat dairy portfolio: down 62% pcp, contributing 13% of quarterly sales; and
- B2B: down 62% pcp, contributing 6% of quarterly sales.
