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Bubs China sales soar, despite tensions with Beijing

Bubs Australia's goat milk infant formula. Picture: PETER HEMPHILL

• JARED LYNCH

  REPORTER

  
• 2 HOURS AGO JULY 27, 2020
• NO COMMENTS

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

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.

Founder and chief executive Kristy Carr said the results showed consumer demand for Bubs’ products remained strong.

It comes amid growing tensions in Australia’s relationship with China, with Beijing warning, via The Global Times, 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.

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 Global Times reported.

But the war of words between the two countries appears to have had little effect on Chinese consumers, who are continuing their love affair with Australian produce.

Bubs CEO Kristy Carr. Picture: David Geraghty

Nevertheless, Ms Carr said Bubs’ markets outside China were also growing strongly.

“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,” Ms Carr said.

“China direct quarterly sales were up 26 per cent, demonstrating consumer demand remains strong. Emerging export markets outside China were up 71 per cent on 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 announced Bubs has entered into the vitamins and mineral supplements category - worth about $2.3bn - via an agreement with Chemist Warehouse for its new Vita Bubs infant and children’s range.

“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.”