Bubs Australia to export baby formula products to US amid nationwide shortage

Bubs Australia (ASX: BUB) will export 27.5 million bottles of infant formula products to the United States to help with a nationwide shortage created by the global pandemic.

The company will immediately ship 500,000 tins of Bubs Supreme A2 Beta-Casein Protein, Bubs Organic Grass Fed and Bubs Easy-digest Goat Milk products and manufacture another 750,000 tins in the coming months.

The contents of each tin will make up to 22 bottles of formula.

Bubs Australia secured a deal with the US Food and Drug Administration (FDA) to address the shortage which started with panic buying and supply chain issues in the early stages of the COVID-19 pandemic.

I’ve got more good news: 27.5 million bottles of safe infant formula manufactured by Bubs Australia are coming to the United States.

We’re doing everything in our power to get more formula on shelves as soon as possible.

— President Biden (@POTUS) May 27, 2022

The problem was exacerbated in February when US manufacturer Abbott recalled several types of formula and closed its Michigan plant when a rare bacterial infection contracted from its products resulted in a cluster of infant hospitalisations and two deaths.

Bubs already distributes its Aussie Bubs formula in the US and has an established business relationship with the nation’s top three wholesale food distributors.

Bubs’ products will be manufactured in the company’s FDA-registered facility which is capable of tripling its current 10 million tin annual capacity.

Immediate source

Bubs founder and chief executive officer Kristy Carr said the deal will provide an immediate source of safe, reliable and clean of infant formula to needy US families.

“Australia and the US have relied on each other in times of crisis for over 100 years and this is no different,” she said.

“All credit goes to the US government for fostering initiatives which allow us to respond and assist… our nationwide sales and distribution footprint will enable us to quickly stock shelves with our existing and prospective retail partners.”

First application

Bubs’ application was one of the first to be filed with US authorities after the FDA identified a need for the import of certain formula products.

Executive chairman Dennis Lin said it aligned with the company’s US market expansion strategy and follows the maiden launch of its Aussie Bubs toddler formula range to that market last year.

“We identified the US as a strategic market two years ago and our commitment to invest has thankfully coincided with American families time of need,” he said.

“This allows us to accelerate our strategic vision and provide support that goes to the heart of the Bubs DNA.”

He said the company’s supply to Australian retailers and export markets would remain unchanged due to “strong control” of its vertically-integrated supply chain and flexibility in its wholly-owned production facility.