Bubs Australia achieves national ranging after signing new supply agreements with Coles and Baby Bunting

Bubs Australia Coles Baby Bunting ASX BUB COL BBN
Bubs Organic grass fed infant formula will be in 482 Coles supermarkets from June 2020 and 52 Baby Bunting stores from May 2020.

Dairy producer Bubs Australia (ASX: BUB) has entered an agreement with Coles Group (ASX: COL) for the supply of its organic grass-fed infant formulas throughout Coles supermarkets, with first orders to be on shelves across the country in June.

The new deal will see the products distributed to 482 Coles supermarkets with initial orders being processed this month.

It is in addition to the continued sale of the company’s goat milk infant formula range which is already stocked in 561 Coles stores, and its line of organic toddler snacks sold in 804 stores.

The partnership with Coles is the longest running retail arrangement for the company which was founded in 2006.

The supermarket giant has sold Bubs Goat Milk Infant Formula since 2016, followed by the expansion into Bubs Organic toddler snacks in 2019.

Baby Bunting

Bubs has also announced a supply agreement with nursery retailer Baby Bunting (ASX: BBN) for a range of products including formulas, food pouches and cereals to be stocked in 52 stores nationwide.

Initial orders have been processed and products are expected to be on shelves and online this month.

Woolworths deal

Earlier this year, Bubs signed a similar supply agreement with supermarket rival Woolworths Group (ASX: WOW) which was expected to materially boost the company’s domestic revenue.

The company today announced an increase to Woolworths’ initial distribution volumes, which will see its grass-fed infant formula stocked across 800 stores nationally (previously 700 stores), and its goat milk formula across 654 stores (previously 400).

The expanded distribution numbers will be on shelves this month and pipe-fill orders have already been processed.

Vote of confidence

Chief executive officer Kristy Carr said the Coles deal was a vote of confidence in the Bub brand.

“It demonstrates confidence in our product and establishes Bubs as a significant participant in the super-premium organic infant formula category,” she said.

“With such strong penetration across all major retail points of distribution in the Australian grocery and pharmacy sector, we are confident our organic range will support portfolio-wide growth in our domestic volume as we continue to build awareness and trust in the Bubs brand with Australian parents.”

National ranging

Bubs Organic has become the only locally-owned and manufactured formula brand to achieve national ranging across all major infant formula retailers in Australia, as well as many independent grocers and pharmacies, with a national footprint in excess of 1850 stores.

Ms Carr said the company is planning an extension into cow’s milk-based products, which account for over 90% of the Australian formula market.