Freedom Foods Group has reported a 21 per cent increase in net sales to $54.1 million for the six months to December 31, with the food manufacturer stating it’s strategically well positioned for long term growth in Australia and key international markets including China.
Freedom Foods is also looking to build its presence in the Australian food service and petrol and convenience channels. Current customers include BP, Coles Express, Caltex Woolworths, 7-Eleven and Metcash as well as Bidvest Food Service and PFD Foodservices.
Almond milk surpasses soy
As the largest supplier of almond beverages, Freedom Foods’ own brands, Australia’s Own and Blue Diamond, have increased sales across all channels. Almond milk is now the largest non-dairy category, having overtaken soy milk.
The company reported its non-dairy beverage sales continued the upward trend from the 2015 financial year with volume growth compared to the previous corresponding period, reflecting increased sales of Australia’s Own and Blue Diamond Almond Breeze brands in retail, food service and convenience channels.
In grocery, the company remains the largest supplier of almond beverages, including the Australia’s Own brand, Blue Diamond Almond Breeze brands and private label offers.
During the period, the almond milk category became the largest non-dairy category, accounting for 39 per cent of the retail non-dairy category, compared to 33 per cent at July 2015.
Soy declined further with total share at 38 per cent, compared to in excess of 50 per cent in prior years. The company expects almond and related blends to continue to grow share within retail and other channels, reflecting a similar trend in North America.
Cereals and snacks business
In 2016 the company expects to add additional SKUs, including expansion of product formats, gain increased facings, and expand retail distribution and channel distribution, including in the petrol and convenience channels.
Freedom Food said its branded business delivered sales growth in its cereal, snacks and related ingredients segments compared to the previous corresponding period. it maintained category leadership in Health Cereals, with a 40 per cent market share.
The business experienced growth in new format combination products such as Active Balance, Oat and Muesli products. The newly launched Crafted Blends cereal range experienced delays in achieving planned distribution, however, has seen increasing consumer uptake in recent months.
Having relaunched its nut free nutritional snack bar range in 2015, the business experienced growth in both health and mainstream supermarket channels and said “tasty, functional and combination format products, as well as portable and convenience format products, will be the key drivers of growth in [its] cereals and snacks business”.
Brand development in China
Freedom Foods is planning to fast track its expansion in China following better than expected sales during a Chinese New Year promotion on Alibaba’s Tmall International.
Freedom Foods launched its flagship store on Tmall in November 2015 with its Arnold’s Farm Full of Fruit, Freedom Foods Porridge and oat cluster products in an effort to promote its portfolio to the Chinese consumer. During the Chinese New Year sales promotion Freedom Foods’ Arnold’s Farm cereal brand was the top selling cereal product on Tmall, and one of the top three selling products on the website.
The Australian food manufacturer and Tmall International are now planning to fast track the joint business venture and accelerate product development over the next 12 months for a number of key lines within cluster and oat porridge category.
This will include focused promotional activity to coincide with key promotional periods including Australia Week, Tmall International’s first anniversary and traditional promotional times including June 11/11 and Chinese New Year. Joint marketing and promotional activities will be developed with Tmall including expansion of product range to other online distributors within the Tmall online portal.
The expansion is inline with the growth strategy outline by Freedom Foods in October 2015, when it announced a $65 million equity raising. The funds were used to purchase snacks manufacturer, Popina Foods, and begin construction of a new UHT processing facility at Ingleburn, in Sydney’s south west, which is expected to be installed from July 2016.
Looking to the future the company says it is strategically well positioned for sales and earnings growth over the long term. New products, expanded distribution channels and increased manufacturing efficiencies are expected to will deliver increasing sales and profit.
This, aligned with investment in building awareness of the brand across a broader consumer market open to healthier products, is expected to provide a strong base for growth into future years.
The company expects its brands – including Australia’s Own, Freedom Foods, Arnold’s Farm, So Natural and Vitalife – to play an important part in its growth in Australia and international markets.