Bubs Australia Ltd (ASX:BUB) Gets Into Costco Warehouses
Organic baby food maker Bubs Australia Ltd (ASX:BUB) saw significant investor interest after announcing a supply agreement with Costco Wholesale Corporation. Costco will “range Bubs infant formula products in its wholesale catalogue nationally, and display ranging in Costco’s Auburn warehouse”. This was preceded by another major announcement last month: BUBS got access to 5,000 pharmacies across the country by adding “key pharmacy wholesalers Sigma Pharmaceuticals and Symbion In New South Wales and Western Australia”. In addition, supermarket behemoth Coles decided to sell BUB’s goat milk formula in more than 450 stores, compared to nearly 320 earlier, while most of Coles stores already sell Bubs organic baby food. Agreement with Costco is a big win for the company that launched IPO this Janaury as Costco’s eight warehouses in the country have nearly 150,000 wholesale members, who are resellers, including personal shoppers catering to domestic and international customers, a key demand driver for infant formula products in Australia. The company’s other distribution channels include brands such as Discount Drug Stores and Chemist Warehouse. While the infant formula market is highly competitive with competitive and bigger companies such as a2 Milk and Bellamy’s Australia, BUB’s increasing footprint indicates that it’s definitely attracting consumers’ interest.