Bubs Australia Shares Rise On A2 Product Launch (ASX:BUB)
Bubs Australia Ltd [ASX:BUB] are up on Tuesday, after the infant formula and nutrition maker announced it will be launching its own A2 protein products.
Fellow infant formula company A2 Milk Company Ltd [ASX:A2M], who pioneered the commercialisation of the A2 protein, will likely be feeling the heat of more competition.
A2M shares were down 1.5% in late afternoon trade.
How will BUB’s new product compete in the market?
Bubs is launching an A2 beta-casein protein infant formula range with an advanced “super-premium” formulation.
This product will be called Bubs Supreme, with Bubs hoping the product will tap into the global A2 beta-casein milk market.
BUB reported that the A2 milk market is currently valued at around US$1.20 billion, with forecasted CAGR growth of 13.5%.
The new range of products will be stocked in 500 Coles supermarkets nationally from May 2022.
BUB products now span across three premium retail segments in the industry: goat, organic, and A2 beta-casein protein.
Bubs Founder and CEO, Kristy Carr commented on the launch:
“Innovation is inherent in Bubs’ culture and a key driver behind our high growth strategy. With the launch of Bubs Supreme A2 beta-casein protein range in our most profitable business segment, we are now able to cater to a more significant share of the addressable infant formula and toddler milk market, thereby strengthening our position in the total category to build widespread recognition of Bubs as a brand synonymous with clean, high quality infant nutrition.”
As part of the launch, Bubs management also revealed a deal with Willis Trading.
Willis Trading’s first purchase order for the new Bubs Supreme product came in at $32.9 million.
BUB recently entered an equity-linked partnership with Willis Trading, its ‘lead distributor’ in the key China sales daigou channel.
Are Bubs worth buying right now?
While today’s announcement is exciting, there are no guarantees the new product formulation will outperform other similar products on the market right now.
But after the recent market corrections, there are plenty of quality bargain stocks on the market right now – many also trading less than $1.
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