In 2022, over 80% of Aussies reported being eco-conscious, demanding better action from not just the government but also brands. And Tasmanian-based food and beverage company TasFoods (ASX: TFL) is stepping up to the task.
The Company has announced a partnership with The Udder Way, an innovative milk distribution system that aims to eliminate single-use plastics globally. The partnership will enable TasFoods to sell and distribute The Udder Way’s milk throughout Tasmania, solidifying TasFoods’ ‘Fortress Tasmania’ pillar of growth.
TasFoods CEO, Scott Hadley, said, “Leveraging our outstanding customer relationships and inherent distribution strength, we can help grow the usage of this innovative system to ensure our customers operate more efficiently and have a positive impact on the planet. We have received strong feedback from our customers that they welcome our partnership with The Udder Way, and we look forward to accelerated growth in the usage of this system in the years ahead.”
The Udder Way’s system helps reduce the burden of single-use plastics on customers and the environment by saving time, money, and the planet. It is an innovative Tasmanian company that has developed a system to reduce single-use plastic waste in the milk industry. The company’s system involves using refillable glass bottles and a unique bottle washing and sterilization process to provide cafes and restaurants with a more sustainable and environmentally-friendly option for serving milk to their customers.
The Udder Way is an exciting Tasmanian success story. With the average café using over 10,000 milk bottles a year, this innovation helps to reduce this burden on customers and the environment.
Founder and Managing Director of The Udder Way, Ed Crick, said, “Our mission is to eliminate single-use plastics globally, and this partnership with TasFoods is the next phase of helping us achieve this goal. As Tasmanians, we are excited to be partnering with another Tasmanian-based business and their iconic brands, Betta Milk and Pyengana Dairy. We look forward to many years of sustained success with our newfound partnership.”
TasFoods reported a sales revenue growth of 1.6% over the prior comparative period to $70.6 million in FY22, despite undertaking an extensive product and customer rationalisation program. However, the Company also reported a reduced gross margin of 22% and a 2022 statutory net loss after tax of $16.5 million, compared to a net loss after tax of $10.7 million in 2021.
$6.8 million of the loss was due to an impairment expense across its Dairy and Poultry divisions. Despite the Dairy division remaining profitable and generating slightly higher revenue compared to the previous year, its gross margins were negatively affected by 6% and operating EBITDA was $0.8 million lower than the previous year. The main reason for this was a significant increase in the cost of milk, which rose by 30% compared to the previous year. However, the Company has successfully taken steps to pass on these cost increases.
To address losses, TasFoods did a capital raising of $5.7 million in March 2022. The Udder Way partnership is another strategic move on its part, tapping into the growing eco-conscious population. TasFoods has widespread distribution and logistics capability in Tasmania anchored within its Betta Milk business, which it will continue to leverage to increase the range of products offered to its customer base in the future. The Udder Way gives it further confidence in entering a market where it has an established user base.
Alinda is a Business Reporter for The Sentiment
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