Wattle Health greatly expands China retail presence with new distribution deal
Through this deal, the Australian infant nutrition manufacturer can now bring its products to over 2,000 retail stores in 13 Chinese provinces.
Gradual increase
At the same time, ISDC will buy a minimum of 1.5 million units of Wattle's conventional cow milk infant formula products over the next year and a half.
The supply will then be increased to 1.5 million units over the subsequent 12-month period, and 2.2 million units over the 12 months after that.
According to both ISDC and Wattle, new supply volumes will be determined for the 12-month periods after the first three and a half years.
ISDC will also provide Wattle with a bank guarantee equivalent to 25% of production costs, in order to move the minimum supply arrangements for each of the aforementioned periods along.
Mainland expansion
This latest development will increase Wattle's presence in China, where it already has retail and distribution agreements with Tesco Lotus, China Duty Free, and Ayingdao mum and baby stores.
Working with Australian contract manufacturer Blend and Pack in February this year, the company managed to secure a 'brand slot' for its goat milk infant formula with the China Food and Drug Administration (CFDA); it aims to begin selling the formula in China by H2 2018.
The company also received its initial orders in Macau and India within the first three months of the year, and recently ventured into manufacturing nutritional dairy products for students and adults, to add to its existing infant nutrition portfolio.
However, the current agreement between ISDC and Wattle is still subject to the CFDA's approval.
The deal will no doubt ensure minimum volume levels for Wattle, and support its plans for continued global product and market expansion, especially in China; it also exports to Vietnam and the Middle East.
Furthermore, the agreement comes on the back of Wattle's record first-quarter sales, which represented a rise of 121% of Q2 2017's total sales.
