Meta-description: Baby formula manufacturer Bubs Australia [ASX:BUB] has provided further details on its US supply deal, naming two of its new major US suppliers, Kroger and Albertsons.
BUB shares were up 8% in late afternoon trade on Friday while the benchmark ASX 200 traded 1.2% down.
The infant formula stock — riding the positive news of its emergency involvement in helping alleviate the US formula shortage — is now up 65% in the last month alone:
Source: Tradingview.com
BUB names new US suppliers
Bubs today announced ‘major’ new supply agreements with Kroger and Albertsons.
Bubs also said that the first flight of its infant formula is set for distribution in 35 US states.
Bubs was one of the first overseas manufacturers to clinch an emergency supply deal that would see at least 1.25 million BUB tins make their way to the US.
The first consignment of Bubs infant formula will be purchased by Kroger and Albertsons, with the Bubs products expected to hit US shelves from 20 June.
Kristy Carr, Bubs CEO, said:
‘Our first chartered 747-400F air cargo shipment under “Operation Fly Formula” will be purchased and distributed by two of the largest infant formula retailers in the United Sates; The Kroger Co. and Albertsons Companies.
‘We extend our thanks to our retail partners, who will endeavour that our products quickly get to retail shelves in the States and stores in most need with the highest stock-out rates.
‘This significant expansion of our retail footprint to over 4,000 stores across 35 States is a truly exciting development.
‘Bubs will be the only Australian made infant formula available for sale in the USA.’
Will BUB’s rescue mission bring long-term rewards?
Bubs thinks the supply agreements signed with large distributors like Kroger and Albertsons can strengthen its position in the US by bolstering relationships with large retailers.
This could help Bubs grab more market share in the large US market.
But time will tell whether the emergency supply of Bubs products will prove a sticky habit for American customers.
Will many decide to remain Bubs customers, or will they revert to their old brands once the local supply issues resolve themselves?
Now, while Bubs has enjoyed a sharp spike on the back of the emergency US order, many other stocks on the ASX aren’t faring as well.
Increasing interest rates, persistent supply chain snarls, and recession fears have soured investor sentiment.
But, as we can see with Bubs, opportunities are out there.
But where do you find them?
Well, our small-cap expert Callum Newman has a strategy for picking out those ‘left-for-dead’ stocks that are most likely to bounce back.
You can find out how he does it, ‘grave-dancer’ style, here.
Regards,
Kiryll Prakapenka,
For Money Morning
