BUB chart, page-2827

Some key takeaways from this interview with the CEO of Bubs.
1. BUB submitted their application (220 pages) within 12 hours after the night FDA lift the restriction on the IF importation.
2. FDA has reviewed their production line in Australia a few days before lifting the restriction, apparently, BUB is looking for a long run in this game, and the company has a bigger picture in the US market.
3. The CEO reckons the vertical management structure enables bubs to react in a timely manner.
4. The first patch of 1.25 m cans will be delivered within the next 3 months.
5. The factory in Dandenong is operating 24/7 recently, and the CEO thinks the factory has the capacity to deliver.
6. Bubs did transfer some of the Chinese inventory into the US to cover the high demand.
7. The pandemic hit this industry hard, but Will Liu, a phenomenal live streamer who has gone viral on the Chinese internet this year, and is also the brand ambassador, has gained unexpected exposure for the brand.
8. Considering the 3.5 m newborn baby in the US each year, he thinks there is a chance to gain more market shares.

Some of my findings:

1. Abbott Laboratories accounts for about 40 per cent of the formula market in the US, and the affected factory was one of its biggest. It was due to reopen on Saturday (04/ June).
2. There is a $US4.3 billion ($6.1 billion) formula market that has been dominated by four local players in the States.

3. “Just for the first 500,000 tins we are talking about five fully loaded 747 cargo planes that are needed, which is very challenging with the current supply chain issues,” Mr Lin said.
4. The distribution had to be linked with Bubs and with retailers such as Walmart and Target, which will put the product on their shelves.

5. Bubs is shipping over six formulations across its goat, organic grass-fed cow and its A2 beta-casein protein formula ranges.

Currently, the company is trading at a MARKET CAPITALISATION of $370,729,226.

Challenges &Risks:
1. BUB is facing one of its biggest logistical challenges. While it had promised it could deliver 1.25 million tins of formula, the question was how it would transport them to the US.
2. June 18, 2021, Bubs toddler formulation gained FDA approval, giving it a head start over larger rivals. However, from the overall performance in FY2022, the trade outlook in China is just also as important, It takes time for BUB to actually secure their market shares in the US.
3. What might come afterwards delivering 1.25 million tins of formula? When there is no panic shopping for IF, and the shelves are full of IF again, the likelihood of a continuously improved trade outlook in the US is in doubt.