The Bubs Australia Ltd (ASX: BUB) share price has increased 12% today after announcing some more exciting news.
The goat infant formula company is no longer just about goat-produced products, it's launching an Australian-made certified organic grass-fed infant formula throughan agreement with Fonterra Shareholders' Fund (ASX: FSF).
The ASX announcement said the organic milk powder will be sourced from the organic milk pool in Australia and manufactured in Victoria, so it's not quite as Australian-sourced as it could be, but you can see why the product would be exciting and seen as a 'step above' existing products.
In less than three months Bubs expects its new product range will be sold in Chemist Warehouse pharmacies throughout Australia.
Even more exciting is that the exporting of the products to the Chinese cross-border eCommerce channel will follow shortly after that.
With the cow milk formula representing 95% of the Australian formula market it seems Bubs has a lot to gain from entering into this market.
In another announcement the company said that it has formalised its key China and domestic channel strategic partnerships with a joint venture with Beingmate Baby & Child Food Co, a partnership with Alibaba's Tmall and the equity linked alliance with Chemist Warehouse.
The building blocks are all there for Bubs to have great success from here with the products being distributed to tens of thousands of Mother and Baby stores in China, a presence on a huge online Chinese platform and distribution with the biggest pharmacy network in Australia which is aligned to Bubs' success. I'm fairly sure Bubs is thinking about other markets such as the UK and USA as well.
Foolish takeaway
The final stage of Bubs' impressive strategy is to achieve a net profit, which it could reach quickly if sales continue growing at the impressive pace that it has been so far. The share price is high for the short-term, but it could be cheap over the longer-term if it achieves management's lofty ambitions.
