Bubs Australia and Beingmate partner for China joint venture

Bubs Australia will form a joint venture with dairy company Beingmate to sell its portfolio of infant formula and baby food products in China.

Under the proposed venture, Bubs will supply its products to Beingmate’s distribution network, which covers 30,000 stores throughout China.

Bubs’ baby food range is already sold across 500 stores in the country and its infant formula is available through several cross-border e-commerce platforms.

Beingmate has 280 infant formula and baby food products in its portfolio and owns the largest number of registered infant formula brands in China, including 17 sub-brands and 51 product lines. Headquartered in Hangzhou, Beingmate was the first infant nutrition company to attain certification under China’s new registration system.

Bubs founder and CEO Kristy Carr said: “Beingmate’s extensive infrastructure, local knowledge, regulatory expertise and extensive domestic distribution footprint, coupled with Bubs’ unique premium international offering, will have the capacity to transform our business.

“Beingmate is particularly strong in driving distribution via China’s lower-tier cities, which are benefitting from China’s new multi-child family policy, and so there are higher expectations for addressable market growth than in the tier one cities where the costs to entry are high.”

Bao Xiufei, who was appointed Beingmate CEO last year, said: “We believe there is a terrific opportunity for Bubs to capture a material share of the super-premium infant formula and organic infant food sectors, both of which are experiencing rapid growth in China. In particular, Chinese parents are attracted to clean and green infant nutrition products for which Australia has an enviable reputation.”

He added: “We are particularly attracted to the control Bubs has over its goat milk supply chain, from the farm gate to the end consumer product, and the sheer size of its milk pool.”

New research from Advanced Lipids suggests that Chinese parents care much more about the quality and nutritional value of infant formula than its price.

Nearly three in five (59%) participants in a survey named nutritional value as one of the two factors most important to them when choosing formula, while 45% chose quality and 39% chose safety. Only 6% said price was an important factor.

According to Advanced Lipids, China accounts for almost half of all infant formula sales globally.