Rare Foods Australia sets more records for growth
Food & Agriculture
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Rare Foods Australia has done it again – blending record sales and revenue with sustainability for the third consecutive quarter. The latest results demonstrate the company’s ongoing efforts to expand its range of offerings from WA’s southwest for growing global markets demanding clean, ethically sourced produce, is paying off.
The Q4 records included 23.3 tonnes of abalone sold for $1.3 million, which fed into big lifts in these key figures for the year. Sales were up 29% on the FY22 figure, at 95.5 tonnes, while revenue of $5.2 million was a whopping 38% higher.
Underpinning the numbers was the uptick in Rare Foods Australia’s (ASX:RFA) core business, with 21.9 tonnes of Marine Stewardship Council (MSC) certified ranched greenlip abalone harvested in Q4. This contributed to another record, with 82 tonnes of the highly sought-after abalone bearing the blue tick sold for the year.
The coveted and internationally recognised MSC accreditation is a key acknowledgment of RFA’s sustainability bona fides that have been a part of the company since its inception.
The MSC Blue Tick also opens doors in a world where consumers demand to know more about the origins of their food, especially at the higher margin end of the market. The average price received for abalone product across FY23 was $54.7 per kg, with the premium ranched greenlip achieving $55.3 per kg, 8% higher than FY22.
The Blue Tick is also a symbol of the homegrown company’s leading-edge innovation, as RFA’s fishery remains the world’s only commercial fishery using wild-enhanced practices to commercially produce greenlip abalone.
What’s been driving the growth has been a mix of organic growth in RFA’s core business, as well as its successful efforts to branch out from the ranch.
A standout addition to the abalone range has been product supplied on a regular basis by third parties to be processed by RFA. To meet increased demand for this third party product RFA processed and packed a record 36.5 tonnes of abalone during the quarter. This culminated in an annual processing record of 116.9 tonnes, 23% higher than FY22.
The processing record has been enabled by the expansion of the company’s processing capacity primarily through a significant increase in staff numbers over the quarter, despite the tight regional labour market in WA.
RFA is now the biggest employer in Augusta and also has agreements with local abalone quota holders who supply wild caught roei abalone. Strong support has been building for the company to continue developing customer led products that could yield valuable markets for both the quota holders and RFA. The Wild Origin product achieved annual revenue of $416k through FY23, with product development and marketing activities aimed at expanding this figure.
RFA has been nurturing new and non-traditional markets, in the past quarter showing its wares at the Barcelona Seafood Show. This initiative, which backed up marketing efforts in the US during the previous quarter, generated numerous enquiries.
Negotiations also began during the quarter with the existing Master Distributors for FY24 forward orders, with strong interest already shown for Year of the Dragon in Asian markets.
The Master Distributors supply wholesales, who in turn serve restaurants, thereby streamlining the sales and marketing channels for RFA.
A relatively small but fast growing part of the business is the Ocean Pantry retail outlet and café. With the company’s Augusta Harbour base also offering whale watching tours, the Ocean Pantry increased its own tour numbers and provided awareness-building product tastings, as well as generating $33k in revenue for the quarter.
Ocean Cellaring is RFA’s licenced process of maturing wine on the ocean floor, which produces wine of greater body and flavour than land based cellaring processes.
Following successful trials, the current harvests planned for November will provide RFA with 2,300 bottles of the “ocean signature” product for sales.
The company is now focused on finalising plans to further scale the ocean cellared production through a bulk method patented in the Northern Hemisphere, while work continued during the quarter on sales and marketing plans to ensure demand for the forecast FY24 production.
As it continues to focus on growth, RFA invested in extensive due diligence during the quarter on several opportunities. One of these was at Esperance where RFA, with support of Yumbah Aquaculture and Esperance based Tjaltjraak Native Title Aboriginal Corporation (ETNTAC), continued work to progress an investment ready aquaculture precinct.
This article was developed in collaboration with Rare Foods Australia a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.