Goodman Fielder negotiates product price increases to recoup losses
Goodman Fielder has announced it will tackle its on-going economic difficulties by negotiating price increases for the products being sold under the White Wings, MeadowLea, and Helga’s brands, effective from December 2012.
Goodman Fielder is reported in the last AC Nielsen/ Retail World directory to hold a 18.6 per cent volume share of the Australian bread loaf market with its Buttercup, Wonder White and Helga’s bread range. Helga’s is regarded as an “artisian bread” brand.
MeadowLea holds a 10.7 per cent volume share of the Australian butter and butter blends market, while Goodman Fielder holds the largest per cent of the Australian retail cake mix market at 31.3 per cent volume with its White Wings brand.
These price increases across the Goodman Fielder bakery category were announced last week by Managing Director, Chris Delaney, at the Annual General Meeting. Mr Delaney said that Goodman Fielder had been negotiating price increases with retailers to reflect a “cost to serve” model.
Mr Delaney also said that it was a “milestone” that Goodman Fielder had reached agreement on the recovery of higher input costs in both the Bakery and Grocery businesses.
Goodman Fielder has been working to combat on-going financial losses. In the 2010-11 financial year, Goodman Fielder experienced a loss of $166.7 million. This improved by 12 per cent in the 2011-12 financial year, with a net loss of $146.9 million reported in August 2012.
Mr Delaney told shareholders that Goodman Fielder was on track for achieving its annual savings target of $100 million by 2015. He said that price increases in products would contribute to an expected net debt reduction of 20 per cent. Mr Delaney reported a net debt of $728 million during the meeting.
Mr Delaney said the company was also investing substantially in innovation across its branded portfolio and would work to identify new revenue streams outside of supermarket channels, including artisan bread and food service channels, and by further developing its Asian capability.