Blackmores today launched its infant formula into an eager market with safeguards designed to stop opportunistic buying and re-selling.
The response has been so great since it announced plans to develop a clean product jointly with dairy group Tatura, a subsidiary of Bega Cheese, that Blackmores decided on an early release.
Most product launches come with the question: Will it sell? This time the question is more: Will there be enough product to meet demand?
Christine Holgate, who is CEO of the company with Australia’s most expensive share price, has more 100,000 tins of 900 grams each to sell this month. Few believe she will have any problem selling them.
“We’ve had our teams work right through the Christmas holidays because we had such a strong response, particularly from Australian mums, when we announced it to the market,” Holgate told Business Insider.
The launch was done under three months from October 29. Blackmores shares went over $200 each on the the day the deal to create a new infant formula was announced.
The strategy is to put 80% of the first production into pharmacies in Australia, a network Blackmores uses for its vitamins. The rest will go to Asia or be be sold online, directly in Australia or via an Alibaba site in Asia.
Each customer will be limited to two tins per day and a maximum of four per week.
“I wish I could say, hand on my heart, that I know what the demand will be,” says Holgate. “But we are doing a number of things to help secure supply and one of the most obvious is that we are partnering with Bega, the biggest manufacturer of milk powder in Australia.”
The online sales are more for consumers who can’t get to a pharmacy in person. Blackmores is trying to avoid the opportunistic buying and selling where supermarket shelves are stripped and the formula shipped to China.
“This service (online) isn’t there for retailers and distributors, it’s there as a backup for mums when they are in need,”she says. “We just want to make sure it’s the mums getting the product and not the retailer.”
The new range includes: Newborn Formula 0-6 months, Follow-on Formula 6-12 months and Toddler Milk Drink 12+ months.
Blackmore shares closed Friday at $205.50 and have been as high as $220.