The Bubs (ASX: BUB) share price is up around 4% after announcing expansion into Vietnam.
Bubs was founded in 2006 by Kristy Carr and was listed on the ASX in January 2017. Its infant formula is based on goat milk and it also sells organic baby food. Bubs recently acquired NuLac Foods, Australia’s largest producer of goat milk products, it also guarantees exclusive supply of local goat milk from Australia’s largest herd of milking goats.
Bubs’ Latest Deal
Bubs has announced a number of deals over the past 12 months to expand its distribution footprint and improve its capabilities.
This morning the infant formula business announced that it has secured ranging for Bubs’ product portfolio in Vietnam’s largest mother and baby store chain called Bibo Mart with more than 135 stores which are mostly in city locations.
To be able to service the Vietnam market it has made a master distribution agreement with Viet Nam Service and Trading company, which is one of the largest Vietnamese owned distributors in the infant nutrition industry, distribution to around 20,000 retail outlets.
Vietnam has an estimated $2.2 billion annual infant nutrition market which is growing at an compound average growth rate of 7.7% over the past five years. Within this, infant milk formula is valued at $1.8 billion.
The company said that a “conservative” revenue projection from this “initial” agreement in Vietnam is expected to be $1.5 million in the first year and at least $2 million in the second year. The contract is for two years and may be terminated if these minimum sales targets are not met.
Bubs Founder and CEO Ms Kristy Carr said: “This new partnership with TVV and ranging in Bibo Mart marks the achievement of another milestone for the Bubs’ business, expanding our Asian footprint in one of the region’s fastest growth markets in the infant category.”
Products are expected to on the shelves of Bibo Mart and other Vietnamese store shelves from December 2019.
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