Bubs to supply infant formula to Costco

Bubs Australia has struck an agreement to supply its infant formula milk to grocery and goods discount wholesale retailer Costco.

Bubs Australia has struck an agreement to supply its infant formula to wholesale retailer Costco. (AAP)

Shares in baby food maker Bubs Australia have jumped more than 10 per cent following news its tins of infant formula will be stocked by discount wholesale retailer Costco.

Bubs has announced it has entered a supply agreement to have its infant formula milk featured in Costco's catalogue nationally and to display its products in Costco's Auburn warehouse in Sydney.

At 1025 AEDT, Bubs shares were up two cents, or 10.81 per cent, at 20.5 cents.

Bubs is aggressively expanding its footprint, having announced earlier this year supply agreements with pharmacy chain Chemist Warehouse and wholesale pharmacy distributors Symbion and Sigma and that supermarket giant Coles will significantly increase the number of stores stocking its products.

The company's commercial director for infant formula, Nicholas Simms, said Costco was an influential and expanding retailer in Australia and would help Bubs reach more customers.

Costco, a members-only warehouse which sells a huge range of food and general merchandise, is a major retailer in the US and has eight warehouses across Australia with about 150,000 members after opening its first store Down Under in 2009.