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Aussie infant formula Bubs is lending a hand in the American formula crisis with tons of product flown in

  • In News
  • June 10, 2022
  • Samantha Freidin
Aussie infant formula Bubs is lending a hand in the American formula crisis with tons of product flown in

It’s the most talked about stock in the retail investor community right now, and having climbed 61.84% in the past month it may be for a while yet. 

I’m talking about Bubs (ASX: BUB), the company coming to the rescue of US parents who are the unfortunate victims of the US formula crisis. 

The serious supply shortage arose following the closure and recall of products made at Michigan based formula manufacturer, Abbott. This was prompted after the FDA learned of several infants who had contracted life threatening bacterial infections linked to consumption of Abbott produced formulas. 

In the US, baby formula is classed as a pharmaceutical, not a food, allowing two companies, Abbott and Reckitt, to hold a duopoly over the market. This is purely because of the cost of development of a pharmaceutical product which involves expensive clinical trials and research as well as a lengthy approval process. Things have been this way since the 50s, but there are public calls for an overhaul of the system as the closure of one plant impacts millions of US families. 

Compounding this, Russia’s invasion of Ukraine has also contributed to the supply squeeze as Ukraine is a major exporter of sunflower oil, an ingredient in many formulas. 

It wasn’t until May that the Biden administration finally responded to the crisis, organising the import of formula to ease supply constraints. 

Operation Fly Formula will see the collboaraton of the U.S. Department of Agriculture (USDA) and the Department of Health and Human Services (HHS) where they will use Department of Defense (DOD)-contracted commercial aircraft to retrieve infant formula from around the world and get it to store shelves. 

172 tons of Bubs formula is due to land on US soil this weekend. The President’s announcement of the plan last week pushed Bubs’ share price up and had shareholders buzzing. 

Shareholders have more reasons to smile today with Bubs using the opportunity to expand their US footprint with The Kroger Co. and Albertsons Companies, two major retailers in the country. 

The Company has announced that the entire first Operation Fly Formula shipment will be purchased by the aforementioned companies who will see distribution to stores expedited. 

Under the consignment, all six of Bubs’ infant formulas, and two toddler formulas will be available for purchase from over 4,000 stores in 35 states as of June 20. This will significantly expand brand awareness and increase demand for Bubs’ products in the US market as more families transition their babies onto the available formula. 

“It is certainly a milestone achievement of which Bubs Family can all be proud,” said Kristy Carr, Bubs Founder and CEO. 

“Our first chartered 747-400F air cargo shipment under ‘Operation Fly Formula’ will be purchased and distributed by two of the largest infant formula retailers in the United States; The Kroger Co. and Albertsons Companies…This significant expansion of our retail footprint to over 4,000 stores across 35 states is a truly exciting development. Bubs will be the only Australian made infant formula available for sale in the USA.

“The Kroger Co. is one of the largest retailers in the United States based on annual sales, with 2,750 grocery retail stores serving 11 million customers a day.

“We are also excited to have Albertsons Companies as a new retail partner. Albertsons is one of the largest food and drug retailers in the United States, with over 2,200 stores in 34 states with numerous well known retail banners.

“We are looking forward to working with Kroger and Albertsons to ensure Bubs products reach American families most in need as soon as possible.”

Giving our American friends a helping hand hasn’t impacted Bubs’ ability to provide for Aussie babies, and other export agreements with the Company confirming that they are not experiencing “any significant volatility or disruption to supply or demand in other markets as a result of the US infant formula shortage.”

Since open this morning, Bubs’ share price is up almost 4%. 

Happy babies, even happier shareholders. 

  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022
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  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022

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  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022
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