Chinese demand for infant formula triples Bellamy’s profits
Bellamy’s Organic has more than tripled its 2016 financial results thanks to strong domestic and international demand for its products, especially from China.
The Tasmanian-based infant formula company achieved earnings before interest and taxes (EBIT) of AUD $54.3 million for the 12 months ended 30 June 2016, a 324 per cent increase on its 2015 financial year results. Bellamy’s net profits grew to AUD $38.3 million and its revenue hit AUD $244.6 million, a 95 per cent increase on its results for the prior 12 month period.
Chief Executive Officer of Bellamy’s, Laura McBain, said that Bellamy’s brand reputation and relationship with parents was driving the company’s success both in Australian and in China.
“We are passionate about producing world class, safe, clean, organic products so that babies can have a pure start to life,” McBain said.
“This passion has underpinned our brand, making us the leader in organic food and formula products for babies and toddlers in Australia, with a growing strong reputation among Chinese parents,” she stated.
Online shopping the key to cracking Chinese market
McBain reported that throughout Bellamy’s 2016 financial year the company continued to experience strong growth in China across all of its distribution channels.
“We recognise the importance of having a multi-channel distribution strategy in china, and providing easy access to our products for parents regardless of their physical location,” she said.
Bellamy’s reported that its presence on popular Chinese online shopping sites, TMall and JD, were significantly contributing to sales within China.
Continuing to drive growth in Australian market
Bellamy’s said within the Australian market it spent the financial year expanding its presence within pharmacies and grocery stores.
“Bellamy’s products are now distributed in more than 4, 400 outlets nationally across all major retailers,” McBain said.
McBain stated that in December 2015 it decided to increase its Australian-sold infant formula prices to help manage the increasing cost of organic ingredients.
“This has delivered benefits to our gross profit margins in the FY16 year,” McBain said.
Further Asian growth on the agenda
Outside of China, Bellamy’s said it has experienced improved sales and market share in other Asian countries including Singapore where its market share now sits at 3 per cent.
“In Vietnam we are working towards improving Bellamy’s footprint through adopting a direct market model that will provide greater control over distribution of our products,” McBain said.