‘Extension of trust’: Infant formula maker Bubs debuts in immune, gut, cognitive health VMS for kids
Consisting of ingredients such as vitamins, lactoferrin, probiotics, DHA omega 3, and colostrum, the products are targeted at infants and children up to 12 years old.
The company told NutraIngredients-Asia that it had spent about 12 months developing the VMS meant to support bone growth, immune, digestion and gut, cognition and brain health, and general wellbeing.
Launched under the brand name Vita Bubs, the products are available in the form of chewable tablets and single-serve powder sachets.
The move into the VMS space will help the 14-year-old company evolve into high margin adjacent categories, said founder and CEO Kristy Carr.
“We have already secured brand loyalty and parent’s trust in what is a highly sensitive and emotional product category.
“The launch of Vita Bubs is a natural extension of this trust and provides the opportunity to leverage our existing consumer base and communication channels,” she said.
The new products will add to the company’s existing range of goat and organic cow milk infant formula, junior nutrition drinks, organic baby food, cereals, and toddler snacks.
Miss Universe and TV celebrity Jennifer Hawkins is also appointed Bubs Australia’s global brand ambassador.
From October, Bubs Australia will be selling the eight new VMS in 400 Chemist Warehouse stores. The pharmacy chain currently accounts for over half of the VMS sold in Australia.
By then, the company’s total range of 40 products will be all available in the Chemist Warehouse chain.
There are plans to launch the Vita Bubs supplements into China via cross-border e-commerce (CBEC) platform Alibaba, Hong Kong, Vietnam, Malaysia, and Singapore by the end of this year.
COVID-19 and growth momentum
While the company has seen its gross revenue grew 32% to AUD$62m (US$44m) in FY20, the growth momentum in the last quarter has been affected.
In the last quarter, gross revenue was down 5% compared to the same period last year.
This was because retailers have been pre-emptively stocking the products in Q3, thus, bringing forward the Q4 revenue.
In addition, the reduction in Chinese tourists and students have slowed the daigou sales channel.
International logistics, on the other hand, also cost more and required a longer delivery time, which in turn lowered growth in Q4.
These challenges have affected performance of the domestic Australian market, pulling down gross sales by 15%, while growth in other markets remained stable.
In the case of China, direct sales were up 26% as compared to the previous quarter, due to the use of CBEC.
Infant nutrition remains its core business, with the category’s gross sales up 14% quarter-on-quarter, representing 75% of the company’s gross sales for the quarter.