Taking note of customer trends shifting towards sustainability and plant-based products, Pure Foods Tasmania (ASX: PFT) has expanded its capabilities, and it seems to be working. In Q1 FY23, the premium food company reported a sales revenue of $2.17 million with an increase in gross profit margins.
Its revenue has grown by 40% per annum over the three years to June 2022. And it’s all thanks to its strategy to grow the top line to achieve scale and identify and acquire businesses. PFT has been on the hunt for businesses that complement and expand the product range.
One way they’ve done so is through white label distribution of its products, like Tas Pate, i.e. Tasmanian ground meat. Sales for Tas Pate were up 8% on Q1 FY22 driven by strong sales of Homestead, its new premium Pate which launched in October 2020. After successfully stocking the pate in Coles stores across Tassie, next on the list is cracked pepper, which will be available in every state of Australia through select Coles stores. This new partnership is expected to deliver close to $1 million in additional revenue for FY23.
PFT Managing Director and CEO, Michael Cooper, shared, “With Cracked Pepper Homestead ranging in Coles nationally along with the company’s white label partnership for Tas Pate, it has been a very positive first quarter for FY23. During the quarter, we also had a successful capital raise of $5.95 million via a placement and rights issue. It is pleasing to say it was oversubscribed, with the funds strengthening our balance sheet. This sets PFT up for continued investment in our brands and supports our strategy to grow organically and via acquisition.”
PFT was formed in 2015 to promote Tasmania’s food and beverage businesses. The Company’s strategy is to develop new premium products within its existing portfolio and also in the plant-based market, to acquire complementary brands and businesses and to increase market penetration. It has a few brands under its name, from Daly Potato to The Cashew Creamery.
The Cashew Creamery witnessed a growth of 14% on Q1 FY22, even though it was interrupted by supply chain issues regarding the installation of a new automated filling line. The Company had to shut down its plant in mid-July to install and commission the new plant with an automated stick and mixing line. It spent over $700k on that. Till now, the production process has been labour intensive, but it is now largely automated and efficient and produces consistent products in both weight, look and ingredients. Plus, it allows the Company to produce a wider range of products, flavours and new 1 litre Tub range.
Moreover, another business of PFT, Woodbridge Smokehouse, which produces smoked fish, reinstated international orders to Hong Kong. The city has reopened after a long period of shutdown caused by the Chinese Government’s COVID policy.
Some other products and businesses of PFT also got a new lease on life after the pandemic.
Cooper expounded, “Daly Potato Co. relaunch of Potato & Gravy saw good acceptance with our customers. This product is targeted at the ‘value consumer’ and provides a nutritious, tasty and inexpensive addition to the family meal at a time family budgets are challenged by high food inflation. We are very confident the product will be very successful.”
With the new $6 million capital raise, the Company aims to boost growth further by investing in working capital, new product development, marketing and acquisitions. For now, it seems to have consumer tastes down pat!
Alinda is a Business Reporter for The Sentiment
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