Buderim launches ginger-flavoured energy drink; shares fall 11pc
Health & Biotech
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Buderim Group — which last week made a “transformative” move to become the biggest US seller of macadamias — is now trying its hand at ginger-flavoured energy drinks.
But investors are not so sure. The shares fell 11 per cent in early Tuesday trade after a big jump last week.
Buderim shares (ASX:BUG) climbed almost 25 per cent last week after it announced a “transformative agreement” to become “continental USA’s largest retail marketer of macadamia nuts through the acquisition of the brands of Royal Hawaiian Orchards”.
Under the deal, Buderim expects to control 65 per cent of macadamia production in the US after handing over 13 per cent of its shares.
Today Buderim told investors it’s new ginger “Original Energy Drink” would be stocked at 450 Woollies supermarkets. They say it’s the only ginger-based drink in the category.
Demand for energy drinks will grow more than 5 per cent a year for the next five to seven years, Buderim believes.
The move is part of the group’s “Ginger Plus” strategy to build on their legacy products by adding cordials and flavour combinations such as ginger beer and apple.
In the last half, the company’s ginger operations operated at an underlying loss of $1.28 million. It put a decline in revenue down to market competition from other gingers — namely cheaper Thai and Chinese products.
Its Sunshine Coast tourism operations – including a 116-year-old train and ginger themed amusement ride – was the only segment to turn a profit, netting $236,000 for the half.
Shares in the company were trading at 36c on Tuesday, close to highs of 37c over the past 52 weeks.