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.