Bubs (ASX:BUB) share price on watch amid A2 product launch

Bubs will be one to watch on Tuesday…

| More on:
A woman with bright yellow hair wearing a brightly patterned blouse reacts to big news that she's reading on her phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Bubs is coming after A2 Milk with its own A2-protein infant formula launch.
  • Products will be launched into Coles supermarkets in May.
  • Bubs also announced its first purchase order for the daigou channel.

The Bubs Australia Ltd (ASX: BUB) share price will be one to watch on Tuesday.

This follows the release of an announcement out of the infant formula company this morning.

Why is the Bubs share price on watch?

All eyes will be on the Bubs share price today after the company announced that it will be taking on A2 Milk Company Ltd (ASX: A2M) with its own A2 protein-based infant formula product.

According to the release, the company is launching Bubs Supreme infant formula and toddler milk with natural A2 beta-casein protein.

This allows the company to access the global A2 beta-casein protein milk market, valued at US$1.23 billion and estimated to reach US$2.6 billion in global market size by 2026. Furthermore, it highlights that it will leverage on the category growth and consumer trend towards premiumisation in China, where the A2 beta-casein protein segment is growing strongly.

Bubs Founder and CEO, Kristy Carr, said: "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."

The release notes that the Bubs Supreme formula range will be on shelf in 500 Coles Group Ltd (ASX: COL) supermarkets from May. This expands the shelf presence of existing product lines, including Bubs easy-digest goat milk formula and Bubs Organic grass-fed cow's milk formula already sold in Coles stores nationally.

Management believes the addition of Bubs Supreme A2 beta-casein protein milk formula will broaden its brand appeal to a new domestic market segment.

Sales order

Also potentially boosting the Bubs share price today is news that its recently announced deal with Willis Trading has led to an opening purchase order valued at $32.9 million.

These products will be delivered in Q4 FY 2022 and Q1 FY 2023 and distributed to the daigou channel.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

A farmer looks backwards towards his crops.
Consumer Staples & Discretionary Shares

Elders shares result: The good, the not so good and the interesting, according to Macquarie

It was a mixed half for the agribusiness company. Here's Macquarie's take.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
Consumer Staples & Discretionary Shares

Takeover terms found unfair to Star Entertainment shares investors but the 'only lifeline' left

Star has released the independent expert's report into the Bally's takeover deal and set a date for the vote.

Read more »

A warehouse worker is standing next to a shelf and using a digital tablet.
Consumer Staples & Discretionary Shares

Wesfarmers share price dips amid strategy day for investors

What's ahead for this diversified conglomerate?

Read more »

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Should I buy Woolworths shares today?

Woolworths shares have gained far less than Coles shares over the past year. Is that about to change?

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Consumer Staples & Discretionary Shares

Which 'enduring high-quality business' has become a forgotten ASX 200 stock?

Fundie says this ASX 200 consumer discretionary stock has been flying under investors' radar.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price
Consumer Staples & Discretionary Shares

Could Wesfarmers shares hit $100 in 2025?

Wesfarmers shares have risen 113% over the last five years.

Read more »

Interest rates written on top of pictures of houses on a computer.
Share Market News

3 ASX 200 consumer discretionary stocks to benefit from a rate cut

With an RBA rate cut expected this afternoon, it could be positive news for these three stocks. 

Read more »