The Bubs (ASX: BUB) share price is up 3% in early trading after announcing a new master distribution agreement with Alibaba.
Bubs was founded in 2006 by Kristy Carr and was listed on the ASX in January 2017. Its infant formula is based on goat milk and it also sells organic baby food. Bubs recently acquired NuLac Foods, Australia’s largest producer of goat milk products, it also guarantees exclusive supply of local goat milk from Australia’s largest herd of milking goats.
Bubs Announces New Alibaba Agreement
The infant formula company has announced a new strategic agreement with Alibaba to take advantage of China’s $2 billion goat dairy market.
Included in this strategy is the launch of a new brand called ‘Deloraine’, which will be produced at the Bubs Australia manufacturing facility in Victoria, Australia Deloraine Dairy.
Under this new agreement, Bubs and Alibaba expect to ship adult goat dairy products including CapriLac and Deloraine brand products worth $10 million in the first year.
Bubs also announced it has signed today a ‘Master Distribution Agreement’ with Alibaba Centralised Import Procurement (CIP). Alibaba and its appointed distributor, The Land, will be responsible for promoting and distributing the adult goat dairy range across the entire Alibaba online and offline ecosystem as well as other external channels.
The Alibaba CIP program and related platforms have the ability to reach 700 million active users.
Bubs will also be signing a ‘Strategic Cooperation Memorandum of Understanding’ with CCIC Australia, which is the largest international China Inspection Institute accredited by CNCA. The two parties are expressing their mutual intention to partner with testing, inspecting and certifying Bubs products to meet Chinese import requirements.
Bubs Founder and CEO Kristy Carr said: “This collaboration with Alibaba CIP is a very meaningful and exciting development for Bubs. There is a huge and growing market for premium adult goat-based dairy products.
“We are the only Australian vertically integrated producer of goal milk formula and so are uniquely positioned to offer Alibaba’s platform-wide customers the comfort that we have complete control of the supply chain right back to the farm gate.”
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