Innovations and Gluten Free growth help Goodman Fielder in tough times
Goodman Fielder, one of Australia’s largest and most diverse food manufacturers with well known brand names such as Helga’s, White Wings, Praise, Crisco, Meadow Lea and Meadow Fresh in its stable of brands, has reported a loss of $147.9 million. Nevertheless its results represents an 11.9 per cent improvement, or almost $20 million, from last year’s figures. The results, appearing in the annual report of the company just released, indicate that normalised profit, which takes out one-off financial items, was $96.5 million in the financial year to 30 June 2012.
During the financial year, about 340 positions were made redundant in its Baking Australia/NZ division, while cash flow was impacted by restructuring costs. Volume declines were attributed to the loss of a private label supply contract.
Despite the bad news, the company reported positive consumer responses to new innovative product developments such as Helga Thins, Vogel’s gluten free and La Famiglia Stone Baked ranges.
The report confirms Vogel’s gluten-free range, launched in July 2011, drove “significant segment growth of gluten free category.” Although the market share of private labels reduced from its peak in July 2011, Goodman Fielder continues market leadership for fresh loaf breads despite a highly competitive promotional environment.
Competition has been strong from private labels and competitors for such items as spreads, flour and dips, yet there has been continued strong growth amongst the segments of dressings, mayonnaise and cakes mixes.
The report confirmed a volume decline in milk sales with reference in particular to major competitors reducing retail milk prices. There was also a reported volume decline within independent convenience stores as opposed to supermarkets.
Growth opportunities in Asia Pacific
The Asia Pacific export division experienced revenue increases as a result of volume and customer growth in new channels, predominantly additional export opportunities, with impressive results in bakery ingredients and dairy in China and poultry in Fiji.
The concluding outlook for Goodman Fielder’s future set out in the report dealt with the following four main areas of focus:
- Market conditions will continue to be challenging: due to competitive pressure, difficult pricing environments, increasing cost pressure due to rising commodity prices
- Improved alignment and dialogue with key players: joint business plans in development, increase innovation, common outlook on industry challenges
- Gluten Free is significantly better positioned to address challenges: strengthened management team, overhead and cost base costs realigned for market conditions
- Updates to markets: update on strategy and plans.