Bubs to target China’s general trade channels with infant goat milk formula pending SAMR approval

Bubs to target China’s general trade channels with infant goat milk formula pending SAMR approval thumbnail

The company has already secured a slot to manufacture the goat infant formula with local Chinese firm Heilongjiang Ubeite Dairy Group (HUG). However, it will still need to wait for the product to be approved by the Chinese regulator State Administration of Market Regulation (SAMR) under the new GB standards.

Said to be designed exclusively for the Chinese infants, the new product is made of easy-digest A2 goat milk protein and functional ingredients such as sn2-palmitate (O2O), lactoferrin, and prebiotics.

It is expected to be launched in the second half of FY23 if it is approved by the SAMR.

At the moment, the firm is selling English-label products through cross-border e-commerce and offline-to-online mother and baby stores.

Once the China label product is approved, the firm will be able to access the general trade channels, including brick-and-mortar supermarkets, mother and baby stores, and e-commerce stores – which represents about 80 per cent of the $40bn infant formula market in China.

Responding to queries from NutraIngredients-Asia, ​the firm pointed out that China was the biggest consumer of goat milk products. 

China is the world’s biggest consumer of goat milk-based formulas. Our goat milk will be sourced from farmers within an area in China, known as the Alpine region, which is renowned for producing high quality goat milk,”​ Vivian Zurlo, Chief Marketing, Innovation, People & Culture Officer – Global Markets said.

The firm also emphasised that Chinese parents were seeking premium ingredients and that the ultra-premium segment has been driving market growth despite a declining birth rate.

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“The ultra-premium segment is a high growth segment in the category. Chinese consumers are seeking more premium offerings.

“Our China label formulation has been developed to meet the nutritional standards of the China infant nutrition regulation, and contains additional premium nutrients, which are in high demand by Chinese consumers; this includes sn2-palmitate and lactoferrin,” ​Zurlo said.

Great demand for goat milk in China

A report by market research firm Arizton showed​ that Asia-Pacific’s goat milk market is forecasted to expand at the highest rate, with more than half of the demand coming from baby formula.

In China, goat milk powder is said to be in “great demand”, ​according to the report. 

At the moment, one of the leading goat milk infant formula brands is Kabrita from Ausnutria.

In the first six months of this year, Ausnutria said its revenue from goat milk in China was slightly down 1.5 per cent yoy to 1582.9 million rmb.

The reduction in revenue was due to the undersupply of infant formulas, the firm said.

“Despite that, according to AC Nielsen, retail demand for Kabrita recorded a comparatively higher growth with double-digit between January and June 2022.

“As the aforementioned problems were gradually solved and overall product shipment maintained positive growth during the reporting period, the Group believes that the growth momentum of Kabrita’s sales in the PRC will continue,” ​the firm said in its half year report released on The Stock Exchange of Hong Kong.

Having identified organic goat milk as an area for growth, the firm launched an organic goat milk formula under the brand Kabrita Yuebai in June.

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