An emerging agribusiness based off Australia’s remote South-West coast is making waves in the worldwide ultra-premium food market, announcing record sales and revenue from its globally unique and sustainable abalone ranch.

Through its core greenlip abalone business, Rare Foods Australia (ASX:RFA) is already tapping into expanding worldwide demand for food sourced ethically from regions with clean, green credentials. Now the company has plans in place to further grow its revenues by expanding its range and diversifying its markets with a strategy that sets it apart from smaller producers.

From its key operations in Augusta, 316km south of Perth, Rare Foods Australia has posted its highest ever sales revenues, which reached $1.26m in Q1 FY23. That’s up an impressive 24% on last year’s Q1. Revenue was supported by a record 22.7 tonnes of greenlip abalone selling at an average price of $55.70/kg whole in shell (WIS), up 8% on the average price achieved during FY22.

“These record results are a vindication of our growth and diversification strategy, and a testament to the premium quality of our products from the pristine South-West region of WA,” CEO Rob Jorden said.

“We’re growing the biomass of our core ‘Grange of the range’ greenlip abalone product through our R&D while pursuing other opportunities. These include other premium products that can help us harness the full potential our ocean leases, processing facility, and sales and marketing channels.”

Sustainability tick

 Rare Foods Australia (ASX:RFA).
Pic: Supplied by Rare Foods Australia.

Another highlight of the quarter was being named winner of the Western Australian Exports Awards for Sustainability, with RFA now a finalist for the 60th Annual National Award.

The win was supported by RFA’s abalone wild-enhanced fishery earning it the coveted Marine Stewardship Council (MSC) certification in June. The MSC’s blue tick, earned after rigorous third party assessment, guarantees seafood bearing the internationally recognised symbol is sustainable and comes from healthy, wild fish populations.

The highly sought-after greenlip abalone are grown on in-house developed artificial reefs called ‘ABITATs’ (abalone habitats), not known to be used anywhere else in the world.

The ABITATs are lowered into the pristine waters where the Southern and Indian oceans meet. Each year about 1.2 million juveniles are placed by divers into the ABITATs stretching across a 413ha lease.

The ranch is self-sustaining and the abalone, which are indigenous to the area, feed from unique food sources brought to them by the two oceans’ currents until they are ready for harvest. The results are greenlip abalone identical to their wild-origin counterparts, but with a much more reliable supply which is unaffected by fishing quotas.

Premium region

WA’s South-West is one of the world’s 36 biodiversity hotspots famous for its tall tree forests and vibrant wildflowers bordered by uncrowded beaches with pristine white sand.

It’s also a gourmet haven dotted with farms growing truffle and marron (WA’s freshwater crayfish) alongside boutique wineries and breweries. Premium fresh produce is sold at a trail of popular markets that attract foodies from Perth and beyond. 

A rare advantage

How Rare Foods Australia differs from many smaller-scale producers is that it has a sales and marketing strategy being implemented by a highly experienced team targeting master distributors to add to its existing clients in markets worldwide.

Right now the company has buyers taking tonnage from Hong Kong, the US and the UK, and it is in advanced negotiations with master distributors in Singapore, Vietnam and Japan.

“These distributors can take large volumes to service a network of wholesalers, which in turn supply networks of upmarket restaurants and retailers,” Alex Wilson, general manager, sales and marketing, said.

This strategy is enabling RFA to further scale up and diversify its abalone markets, while it adds other rare foods to its range.

Fresh offerings

The first of these new products is wild roei abalone scheduled for export markets during Q2. This has come about from engagement with about 40% of WA’s wild roei quota holders to secure supply for processing at RFA’s Augusta facility, then send into export markets through the company’s new and existing sales channels.

Another exciting development is the progression of trials of ‘ocean-cellared’ wine. It’s a process used by producers including Veuve Cliquot. The French champagne house serendipitously discovered the flavour-enhancing ocean floor maturation technique after some very vintage but surprisingly very good bottles of Veuve were uncorked after being discovered on a shipwreck.

RFA is now evaluating the outcomes of its trials involving Margaret River region wines and developing a business plan to present to the Board during Q2.

Also set for Q2 is the opening of the Ocean Pantry retail space to showcase the company’s products to the thousands of domestic and international tourists who visit Augusta each year.

RFA currently has FY23 sales and non-binding forward orders equal to 96% of FY22 greenlip sales. This along with an R&D refund, expected to be $1.83m and due imminently, put RFA in a strong cash position to pursue its growth goals.

 Rare Foods Australia (ASX:RFA)
Pic: Supplied by Rare Foods Australia (ASX:RFA).

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.