Goat's milk formula producer Bubs Australia (ASX: BUB) saw its quarterly revenue fall 34 per cent in the September quarter as it went through a COVID-19 enforced weaning from Australia-based Chinese daigou buyers.
However, the Jennifer Hawkins-fronted group also saw increased appetite for its product in Australia, with its Bubs Organic Grass-fed Formula nabbing a 18 per cent category market share since its launch.
Company founder and chief executive officer Kristy Carr said despite macro volatility and channel disruption during the quarter, Bubs Infant Formula sales remained strong and continued to grow in all key markets.
She reported material sales uplifts of 29 per cent across major Australian retailers and direct export sales of Bubs' goat formula products to China increased 76 per cent compared to the same period prior year.
"To address the significant disruption to the daigou channel, caused by the sudden border closures and increased international freight costs, we are also working alongside our corporate daigou partners to continue to actively support social marketing with their daigou customers via live-streaming and social media," she said.
"We have already started to see positive sales momentum return in late September through to October, and we anticipate improved performance from the daigou channel in the second quarter as we lead into China's major e-commerce shopping events.
"It is clear Chinese consumer demand for our premium products remains strong with Bubs ranking No.1 Goat Formula brand on JD.com, and doubling goat market share to 12 per cent on Tmall Global, making it the fastest growing goat formula brand on the platform."
The news was equally positive in the Australian retail space, with the Victorian-based Bubs now ranked No.1 Goat Formula brand in Coles and scan sales of Bubs Goat Formula in Woolworths having increased 172 per cent in the last 13 weeks.
The company also built a well-stocked warchest over the quarter, with investors piling into an over-subscribed institutional share placement that was finalised earlier this month.
WIth the $28.3 million from that placement Bubs had $42.6 million in cash reserves at 30 September.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support