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August 24, 2020

Bubs Australia’s goat-milk formula to be made in China by Beingmate

Infant-formula manufacturer Bubs Australia has entered a memorandum of understanding with China's Beingmate Co.

By Dean Best

Infant-formula manufacturer Bubs Australia has entered a memorandum of understanding with China’s Beingmate Co. to acquire an interest in one of its production facilities.

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The baby formula site is located in the city of Beihai in Guangxi, and the memorandum also includes Beingmate’s help in securing a State Administration for Market Regulation (SAMR) brand slot, with the objective of producing Bubs China label Goat Milk Infant Formula using 100% Bubs’ goat milk.

The product will be sold through a joint venture set up between the two companies last summer – the Beingmate Joint Venture company (Bubs Brand Management Shanghai Co.) in which Bubs owns a 49% interest. 

Bubs Founder and CEO Kristy Carr said: “We are highly confident this step up in our collaboration with Beingmate, one of the largest Chinese-owned enterprises in China’s infant-nutrition industry, who is also our joint venture distribution partner, coupled with their extensive capability to manufacture locally in China, will provide invaluable support in securing our SAMR brand registration. This will ultimately provide Bubs with a faster route-to-market and full access into China’s mother and baby stores. 

“Given the current geo-political landscape and regulatory risks, this breakthrough localisation strategy for a ‘Created by Bubs’ product to be packed in China exclusively from our own Australian premium goat milk, mitigates key risks and provides a secure pathway to gaining full access to the world’s largest and fastest growing infant-formula market.

“Importantly, this new localisation strategy would provide Bubs with exclusive use of a China domestic SAMR brand slot and partial ownership in a registered facility in China, whilst fully retaining IP ownership of the Bubs brand and of eventual product proprietary formulations, which will be based on 100% Bubs Australian goat milk.” 

Bubs added it intends to withdraw the existing SAMR brand applications previously made by its Deloraine dairy, and will “resubmit differentiated super-premium formulations targeting consumers in tier-one cities”.  

There will be no change to the English-label product produced at Deloraine and sold directly into China via the cross-border e-commerce channel. 

Bubs executive chairman Dennis Lin said: “This pivotal approach provides the cornerstone for our future global expansion plans. During this volatile period in which many businesses are operating under strong macro-economic forces, it is paramount we demonstrate agility and implement strategies ahead of the curve to respond to evolving market dynamics and changing consumer behaviours brought on by the global pandemic.” 

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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