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Beston lands the big cheese with $20 million mozzarella deal

Taking a bit of the stringy goodness that is cheese on pizza, there’s a pretty good chance that you’re eating mozzarella produced by Beston Global Food Company (ASX: BFC) which has secured a contract to produce about 3,600 million tonnes of mozzarella per annum.

The supply deal will see Beston produce around 50% of all mozzarella in Australia where it supplies the cheese to some of Australia’s largest food manufacturing and retail companies. In total, the forward-supply deal is valued at $20 million per annum to Beston.

“Our customer prides itself on the quality of its frozen food products and hence it is very pleasing to have the premium quality of Beston’s mozzarella and other cheese products recognised and endorsed by one of the world’s leading food companies,” said newly appointed Beston CEO, Darren Flew.

“The contract again highlights the benefits of the state-of-the-art mozzarella plant that Beston installed at Jervois which has the flexibility to produce mozzarella of different specifications to meet the particular requirements of different customers.”

Like many Australian-based food manufacturing companies, Beston has been adversely affected by COVID-19 which has seen a decline in their international export opportunities.

“While we continue to build our export base with an increasing number and spread of high quality offshore customers, the significant reduction in global shipping services as a result of COVID-imposed restrictions has meant that finding container space to meet export deliveries has become difficult.

“Having more of our market on-shore will be beneficial over the next 12-18 months as we continue to build export opportunities for when these markets become more open and accessible, post the pandemic.”

The mozzarella contract is a welcome sight for Beston which has endured a torrid time with Australian droughts in 2018 and 2019 impacting its producing capacity, prior to the onset of COVID-19.

But with all those distractions working their way into history, the mozzarella deal is just the start of a renewed focus to capitalise on rising global demand for lactoferrin (a protein in milk) with its immune system-boosting properties in the new health-conscious world.

Driving this strategy is Beston’s lactoferrin facility which they have expanded production capacity from 180 million litres to 25 million tonnes for new lactoferrin products to be rolled out in the coming months including drinks, supplements and pharmaceuticals.

Alfred Chan

Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.

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