The Bubs Australia Ltd (ASX: BUB) share price will be on watch on Monday following the release of an announcement out of the goat milk infant formula and baby food company.
What was announced?
This morning the company announced its entry into the post-infant nutrition market with the launch of several new products.
According to the release, the company has launched an innovative range of eight toddler snacks certified organic by Australian Certified Organic. The new range is based on organic vegetables, fruits, ancient grains, and nutrient dense superfoods. It believes these offer parents healthy, organic, premium snacking choices for children aged 1-5 years.
The company's founder and CEO, Kristy Carr, believes this launch significantly advances its progress, as the company now caters "for all feeding occasions and developmental stages from newborn to preschool."
She said: "The new organic toddler snacks extend our consumer lifespan, or period of potential customer engagement, which previously covered the first 1,000 days of a child's life through infant years. This is driven by changing lifestyles for busy parents, as families become more mobile and are looking for convenient nutritious snacks to give their children out-of-home or in a healthy lunchbox."
Mrs Carr advised that the toddler snack market is currently valued at $33 million and is growing fast. These snacks will be ranged in Coles Group Ltd (ASX: COL) supermarkets nationally from May 2019.
It will also now commence the application process with Chinese authorities to register the new snack range for sale in mother and baby stores in China.
Should you invest?
Whilst this is certainly a positive development and could provide its sales with a boost in the near term, I think it's a little too soon to make an investment.
Bubs currently has a market capitalisation nearing $350 million, yet half-year sales of just $21 million and a half-year net loss of $8.8 million. Based on this, I'm not convinced there's a compelling enough risk/reward on offer here to make Bubs worth investing in.
In light of this, I would sooner buy the shares of rivals A2 Milk Company Ltd (ASX: A2M) and Bellamy's Australia Ltd (ASX: BAL) at this stage.
