2 ASX shares that may be hit by Australia's declining birth rate

There are many ways declining births may affect share prices, but will Baby Bunting (ASX: BBN) and Bubs Australia (ASX: BUB) feel it most?

A declining birth rate will affect the ASX in many ways, but the most obvious is a potential hit to companies that make products for Australia's bubs. Especially those companies that cater exclusively for babies. 

According to the Federal Government's Centre for Population, Australia's birth rate is projected to average at 1.62 babies per adult female until 2030, making it the lowest birth rate we've ever seen. Comparatively, the highest birth rate for Australian women in this century was 3.5 babies in 1961.

As the birthrate needed to sustain the population (assuming no migration or immigration occurs) is 2.1 babies per woman, we may well face a future where there just aren't as many babies around.

If you're wondering which companies might want to start considering branching out into different fields, you've come to the right place.

Here are 2 Australian companies that cater exclusively for babies

Bubs Australia Ltd (ASX: BUB)

Bubs Australia is a nutritional company for babies and young children. How will its share price fare if the birth rate drops?

Its products include formula, snacks, cereals and a new line of children's vitamins. Currently, Bubs products are stocked in Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW), Chemist Warehouse, Big W, Amazon.com, Inc (NASDAQ: AMZN) and selected Australian pharmacies.

At the close of trade today, the Bubs Australia share price was 51 cents, down 15% year to date. Bubs shares are also down 5.56% over the last 12 months.

Bubs Australia has a market capitalisation of around $312 million, with approximately 612 million shares outstanding.

Baby Bunting Group Ltd (ASX: BBN)

The retail group focused solely on products for babies and toddlers up to 3 years of age. Could the Baby Bunting share price drop alongside the birth rate?

The retailer has 50 stores Australia-wide.

The Baby Bunting share price closed at $5.55, up 0.73% today. Year to date, the retailer's shares have seen an increase of 14.6%. Its share price is also up an impressive 220.8% year to date.

Baby Bunting has a market capitalisation of $712.20, with approximately 129 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Amazon, Baby Bunting, and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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