Bubs seals deal on ‘ultra-premium’ China-made formula

The products will still need to go through a regulatory process to be approved by China’s State Administration for Market Regulation (SAMR).

“The regulatory process is an intense one,” Carr said. “During that period [three to six months], we will also be creating our sales and distribution plan and appointing our provincial distributors,” she added, as well as tapping into HUG’s distribution network.

HUG’s farms are located in the alpine dairy region of north-eastern China, known as the “great Northern wilderness”, with their infant formula production facility and canning line less than 90 minutes from their dairy farms.

The announcement is in line with the Bubs’ 2023 focus on growing the Chinese and US markets, which CEO Carr outlined after the company turned a profit for the first time in the 2022 financial year.

Revenue from Chinese customers already makes up more than half (55 per cent) of the company’s group revenue.

Bubs is also preparing itself for a permanent foothold in the US market after it became one of the first companies to respond to the infant formula shortage crisis in the US, which was triggered after a key manufacturing facility in Michigan was forced to shut after the discovery of a bacterial infection that led to the death of two infants.

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“Other than a select few multinationals, there are very few brands around the world that have complete regulatory access to the two largest-performing markets in the world,” said Carr.

“By next year, I think we’ll be in a very good position to have significant growth across our global footprint in both key markets.”

The last time the company slid into a trading halt was early July to prepare for a $63 million capital raising to increase staff numbers and boost its Melbourne manufacturing facilities.

While Bubs and non-listed baby formula player Bellamy’s Organic products are stocked on American supermarket shelves, their much larger rival A2 Milk had its US FDA application put on ice in August.

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