SYDNEY — Bubs Australia Ltd. shares rose Monday after the infant-formula manufacturer said that it had entered into two new U.S. supply agreements.
The Australian company said that it will supply formula to H-E-B Grocery Company, which has 340 stores across Texas, and Meijer Inc., a chain with 259 stores located predominantly in the Midwest. At the same time, 90,000 tins of formula with a total gross revenue of 3 million Australian dollars (US$2.04 million), are expected to arrive in the U.S. on July 6.
Shares in Bubs Australia were last 4.0% higher at A$0.65, and are up around 35% since the beginning of January.
This comes as long-established companies and startups angle to emerge in a stronger market position from a nationwide formula shortage in the U.S. as they work to hold on to new customers who are more willing to switch brands while shelves remain thinly stocked.
Smaller U.S. participants have ramped up manufacturing to ease the shortage, gaining customers in the process, while formula made overseas by companies including Bubs have been brought into the country under the Biden administration’s efforts to speed up imports.
Bubs in June upgraded its guidance for fiscal 2022 in the wake of strong momentum in China and an unanticipated volume of sales in the U.S.
The company expects gross revenue of more than A$100 million for the fiscal year, subject to scheduled operations occurring without disruption.