Food Revolution Group continues to deliver strong growth
The Food Revolution Group Ltd (ASX:FOD) has released a promising update on the latest IRI scanned market data (market reading of consumer purchases from Woolworths and Coles) for the March quarter.
Year-on-year growth across the group of 25.9% was an outstanding performance, particularly given that total market growth was 1.1%.
Once again, the Original Juice Co Brand performed exceptionally well, delivering year-on-year growth of 24.4%.
FOD is benefiting from its strong alliance with Woolworths and Coles, and retail sales growth from those stores increased by 27.2% and 24.5% respectively.
In line with the past three quarters, FOD brands continued to perform ahead of the market in the $560 million Australian fresh juice and functional beverage market, and this has been reflected in the outstanding revenue growth achieved across that period.
Key factors contributing to the growth were the ongoing consumer demand for Original Black Label brand that has benefited from its successful repositioning, excellent quality of the fruit received from key growers and highly effective promotional programs with the major retailers.
FOD has also benefitted from the positive consumer response to the group’s Juice Lab wellness shots being distributed by Coles, and management highlighted that they would be sold from a further 1000 stores by the end of May.
Close relationships with retailers and growers provide predictability
Importantly for a smaller company, top line growth is being converted into earnings growth, and on this note managing director Tony Rowlinson said, “I am exceptionally pleased as to the ongoing positive trend regarding FOD market share gains and growth.
‘’In the past 12 months, the Original Juice Co Brand has grown in excess of 20%.
‘’Considering the challenges we faced regarding the impact of COVID-19 and short supply of fruit, this is an excellent result.
‘’With the roll out of the OBL Brand into the independent retailers in South Australia, the favourable consumer response of the Juice Lab wellness shots into Coles and roll out into a further 1,000 stores by end of May, this has given the business good momentum and it is well positioned for ongoing profitable growth.
One of FOD’s strengths is its strong relationships with the growers who despite sometimes challenging conditions ensure that supply is maintained.
Likewise, management has been able to negotiate robust commercial relationships with the major supermarket chains, as well as other distributors.
View Our Investment Portfolios
Short-term positions in small, early stage ASX companies,
with high potential and near term price catalysts.
Focusing on resource exploration, early-stage tech, and biotech.
Exceptional opportunities across a broad range of
early-stage growth sectors with strong management.
Seeking 1,000% plus returns across medium to long-term holds.
Longer-term positions in a variety of sectors.
Seeking strong management where traction
is established and have entered into a growth phase.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
Publishers Notice
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.
