News

Nespresso has named Stefan Vermeulen as its new MD for Oceania, effective next month. Vermeulen will succeed Jean-Mark Dragoli, who will move forward as the global head of Nespresso Authorised Brands in Switzerland.

The company said Vermeulen brings a wealth of brand knowledge and local experience, having held leadership positions within Nespresso for more than 12 years, including leading the team in New Zealand as MD and four as head of Nespresso Australia’s professional business. 

During his tenure, Vermeulen helped drive substantial growth in New Zealand by introducing the Vertuo system to the market in 2021, expanding Nespresso’s coffee range, and spearheading local sustainability initiatives.

These efforts included reforestation projects, support for educational programs on the circular economy, and strengthening the local recycling program.

Sharing his vision for the business, Vermeulen said he believes that coffee can be a force of good for people, communities, and the planet. 

“The more we drive sustainable growth, the more we can have a positive impact as a brand and organisation through the entire value chain,” he explained.

“Sustainability will also remain at the core of our strategy as we explore new ways to engage more consumers with our recycling program and introduce initiatives to help us on our journey towards net zero and improve as a B Corp.”  

Meanwhile, under Dragoli’s leadership, the company said it had benefited from product innovations and services that resonated with local consumers – from Aussie-inspired coffee blends to personalisation and expanded delivery services. 

His prioritisation of local sustainability initiatives has also helped the business deliver on its B Corp commitments and the broader purpose of using coffee as a force for good.

Key projects include:

• An innovative kerbside recycling trial.
• A Recycling Rewards pilot.
• The launch of the company’s first Australian StartCup Challenge supporting circular start-ups and SMEs.
• A partnership with Greening Australia to build resilience in local habitats in the face of climate change.  

Welcoming the new MD, Dragoli said Vermeulen deeply understands the local coffee culture, customer preferences and the nuances in each market. 

“Having led and built relationships with our teams on both sides of the Tasman over the last seven years, Stefan has already established a strong foundation for success in the Oceania market,” he concluded.

“I have no doubt he will do great things in this role, leading with our employees, customers and business partners front of mind.” 

Collins Foods, the ASX-listed operator of KFC and Taco Bell chains in Australia, and KFC in Europe – broke the US$1 billion sales threshold in its home market last year.

For the year to April 30, revenue from continuing operations rose by 14.2 per cent to $1.35 billion with growth across all business units.

KFC Australia’s revenue grew 10 per cent to $1.05 billion when compared to the prior corresponding period while same-store sale growth was up 5.8 per cent, driven by significant e-commerce growth.

Delivery, web and app sales contributed nearly a quarter of all sales in the second half in addition to increased accessibility through partnerships with major aggregators, including Uber Eats.

KFC’s Europe division delivered double-digit sales growth of $249.5 million, up 31 per cent while same-store sales were up 13.9 per cent.

Taco Bell’s revenue increased 36.1 per cent to $48.7 million, with the addition of eight new restaurants during the year.

Underlying tax-paid profit from continuing operations fell to $51.9 million while underlying EBITDA fell to $205.1 million.

In a results filing, the company said it expects inflationary pressures to remain for much of the next year, however, plans to maintain its long-term growth strategies.

That strategy includes a trial of click-and-collect at its Queensland and Victorian restaurants and the steady rollout through UberEats which is contributing to increased brand awareness.

Drew O’Malley, MD and CEO of Collins Foods, commended KFC’s strong store sales performance in Australia and Europe in the face of challenging economic conditions.

“Whilst inflationary pressures have played into our profitability in the short-term, our long-term growth plans remain on track, and we will continue to prioritise providing exceptional value across each of our brands as a primary driver of customer retention and engagement.”

Therese Frangie has been named Mad Mex’s CEO as founder and former chief Clovis Young moves on to become MD.

Frangie, the former COO of the business, will now look after the day-to-day operations of the company and focus on growing the brand into more stores.

Of her appointment, Frangie said she will be “laser-focused” on delivering sustainable growth and expansion while not wavering from operational excellence.

Meanwhile, Clovis Young who started Mad Mex in 2007 said it was the “right time” for Frangie to “officially step into the CEO role”.

“As the business size and scale increase, Therese has the operational excellence and leadership capabilities to run the day-to-day business.

“She has been a driving force over the past six years and knows the business inside and out. This transition in the role allows me to stay connected to the strategic goals of Mad Mex and better leverages my entrepreneurial strengths,” said Young.

The proportion of Australians who consume alcohol has increased since the pre-pandemic period, says market research company Roy Morgan.

In the year to March, 13,709,000 Australians – or 67.6 per cent of people aged 18 years and over – consumed alcohol in an average four-week period when compared to 66.3 per cent in the year to March 2020.

The increase is driven by the ready-to-drink (RTDs) category which registered an increase in consumption from 10.8 per cent pre-pandemic to 20.8 per cent now.

Consumption of wine, the most popular alcohol during the pandemic, has increased from 41 per cent pre-pandemic to 43.9 per cent in the year to March.

Meanwhile, beer has lost the momentum it had gained during the early stages of the pandemic. Now, fewer than a third of Australians – or 32.2 per cent – consume beer, down from 37.6 per cent pre-pandemic.

Spirits consumption has also recorded a meagre decline of 27.5 per cent from 28.7 per cent pre-pandemic.

Roy Morgan CEO, Michele Levine, said alcohol consumption amongst the Australian population is now “reasserting itself”.

“The standout performer of the last few years has been RTDs which have kept increasing despite the ending of lockdowns and all pandemic-related restrictions,” said Levine.

“The emerging trends suggest consumption of wine and spirits looks set to return to pre-pandemic levels while RTDs such as vodka, gin, bourbon and rum have been on a sharp rise in recent years and that trend could well continue at the expense of beer consumption which has continued its long-term decline.”

Infant formula maker A2 Milk has scored a win in on one of its most lucrative markets after the company’s contract supplier, Synlait Milk, was approved by China’s market regulator to continue selling its China label infant milk formula product.

On Tuesday, A2 Milk announced that China’s State Administration for Market Regulation had renewed approval for Synlait to manufacture stages one, two and three infant formula products after its previous registration only got a bridging extension in February pending the regulator’s decision.

It comes after infant formula sold in China underwent a regulatory process to meet the country’s more stringent food safety rules, known as GB standards, with the renewal to be valid until September 2027.

A2 Milk said production was expected to begin later this month at New Zealand-based Synlait’s Dunsandel facility, and that its products would transition to the market in the first half of 2024.

The company’s chief executive David Bortolussi said the approval by China’s market regulator would provide A2 Milk with continued access to China’s substantial domestic infant milk formula market, which remained a key focus of the firm’s growth strategy.

“We look forward to making our upgraded new China label IMF product available to parents and their infants and young children in China, building on the strong brand loyalty we have developed with Chinese families over the past decade as the pioneer and leader of the A2 protein category,” Bortolussi said.

Chinese parents represent a lucrative key market for the dual-listed company, with revenue from its Asia market increasing 24.5 per cent in the 2022 financial year.

Bortolussi previously told this masthead the company was also seeking to build back its Chinese daigou community after the pandemic’s closed borders inflicted damage on the reseller channel into its key Asian market.

Synlait chief executive Grant Watson said the registration in China was a significant milestone and the company would benefit from the certainty received through the renewed approval.

“The re-registration is a very important milestone, and we have worked hard together to ensure its success,” Watson said.

Following the announcement, shares in A2 Milk traded 4.1 per cent higher at $5.56 shortly after 1pm AEST, ending the day 1.9 per cent higher at $5.44.

Tribeca Investment Partners portfolio manager Jun Bei Liu said the approval extended for a longer timeframe than most investors were expecting.

“The market was getting quite worried about what was happening with A2’s licence and was only expecting a short renewal or one or two years,” Liu said. “The approval removes an overhang for the company and is quite meaningful.”

Liu said China was a core growth market for A2 and that the company’s outlook was positive.

“A2 is one of the few companies that have managed to capture the imagination of Chinese consumers and the outlook now looks great.“

Sigma Pharmaceuticals has won over the Chemist Warehouse wholesale pharmaceuticals contract held by its much-bigger rival EBOS, in a major win for the business.

It has signed a binding term sheet with the pharmacy giant for supply of Pharmaceuticals Benefits Scheme (PBS) medicines and fast moving consumer goods (FMCG) items for five years starting in July 2024.

The contract is worth $2 billion annually and would triple Sigma’s existing Chemist Warehouse contract from $1 billion.

Sigma would pay Chemist Warehouse across new shares and a right to acquire some non-core assets. It would issue about 10.7 per cent of its share base at 64.2¢ a pop to the pharmacy owner at the start of the supply contract. (Sigma shares closed at 63.5¢ on Monday).

In addition to it, Chemist Warehouse would have the right to acquire certain non-core assets from Sigma that have a $24.5 million value. Should Chemist Warehouse decide not to buy the assets, Sigma would have to pay it $24.5 million net cash.

Sigma’s largest shareholder is David Di Pilla’s HMC Capital, which owns 19.07 per cent. HMC Capital, in turn, is backed by Chemist Warehouse’s owners and has been on fundies’ M&A radars for a while.

It is a major blow for the New Zealand and ASX listed EBOS, which has a $7.25 billion market capitalisation and was halted from trading on both exchanges on Tuesday morning.

Eric Morris will step down as chief executive of Larry Kestelman’s Brand Collective – the name behind Superdry, Clarks and Volley – after 18 years in the top job, with former David Jones boss David Thomas taking the helm.

Mr Morris was appointed to lead the Brand Collective business when womenswear retailer The PAS Group merged with Brand Collective in March 2022. Rich List property developer Mr Kestelman snapped up Brand Collective from Anchorage Capital Partners, which owns Shoes & Sox, Shoe Warehouse and Volleys, in 2021. He bought PAS Group after it fell into administration the year prior.

“It has truly been an amazing journey, from the formation of The PAS Group in 2005 following the acquisition of the Yarra Trail business by private equity, to my involvement in each subsequent acquisition of the PAS brands and to the delivery of the business as it stands today,” said Mr Morris, who will take a non-executive director seat and advisory role within the Brand Collective business.

Under his management, the enlarged Brand Collective business expanded its portfolio, adding Reebok, Replay and Canada Goose.

Mr Thomas headed up Country Road Group, as well as a short stint as CEO of David Jones, and stepped down from running Peter Lew’s Brandbank Group, which owns Seed Heritage and All Kinds, after four years.

“I am delighted to join Brand Collective and to work with the team to enhance business performance and deliver on future growth opportunities. The team have created a strong framework for future growth, and I look forward to this new challenge,” said Mr Thomas.

Executive chairman Mr Kestelman said the company is positioned for a prosperous future as the business evaluates growth opportunities.

“I would like to thank Eric for what he has done in building the business as well as his dedication and tenure, and I look forward to David’s future leadership and contribution,” he said.

Brand Collective’s parent company, Queens Lane Capital, was founded and is controlled by internet entrepreneur-turned-property investor Mr Kestelman, Boris Rozenvasser and Nick Tsoumanis.

Brand Collective is one of Australia’s biggest multi-brand apparel, footwear, and sports businesses, with a stable of 24 brands, over 300 retail stores and 14 e-commerce sites.

It also operates Designworks, the wholesale arm responsible for the development and distribution of private label and licensed sports and character brands such as Bluey.

It’s time to take the makeup off at Sydney private equity firm Crescent Capital Partners.

Street Talk can reveal Crescent has mandated Ankura Consulting Australia to find a buyer for its beauty and makeup business, Nude by Nature, after nearly a decade of ownership.

Nude by Nature lays claim to being Australia’s No.1 mineral makeup brand that rings up a sale every 27 seconds from the range. Its product offering covers the whole gamut – foundations, BB cream, mascaras, brushes – and is marketed as 100 per cent clean and natural.

Despite its clean-ingredients push, it’s not a niche player but rubs shoulders with juggernauts like L’Oréal in the makeup aisles of Chemist Warehouse, Priceline, Myer, Target, Big W and 1200 independent pharmacies in Australia and New Zealand.

The homegrown business is the fifth-largest seller at pharmacies – behind multi-nationals Maybelline, Revlon, L’Oréal and Rimmel – where nearly 45 per cent of the population does its cosmetics and beauty shopping.

Its mineral foundation sells for $42.95 a pop, while brushes start at $16.95 on a full-price basis. It claims to be “cleaner” than higher-priced competitors and is ready to be scaled up locally and overseas, according to the sell-side pitch.

Ankura is preparing Nude by Nature for a 100 per cent sale, and would take expressions of interest before commencing the sale process.

Slap on the lipstick, COVID is over

Crescent Capital Partners has pressed play on the sale as discretionary retail straddles a tricky divide – on one side, sales in categories like makeup and movie cinemas are recovering from lockdowns but on the other, rate hikes are being tipped to force shut shoppers’ wallets again. The PE firm has also redrawn it territory to become a leader in healthcare assets. 

The preliminary sales pitch has urged prospective buyers to think of Nude by Nature’s double-digit EBITDA margins (detailed financials were not offered at this stage), track record of growing profitably, large footprint and future growth opportunities.

The latter, it said, would come from pushing further into digital channels and new geographies.

Nude by Nature’s chief executive officer Mark Thompson, who has been in the role since 2014, sees merit in launching again into China and is preparing a US foray in the 2025 financial year. The management has experience in taking its products global, and is already driving revenues from launches in Canada’s Shoppers Mart and Europe’s Nocibé, Douglas and Karstadt.

Lastly, it has a pipeline of products ready to launch, including colour cosmetics, clean baby care and teen-focused products, prospective new owners were told.

As a comparable deal, Melbourne-based high-end skincare brand Aesop fetched a $US2.53 billion ($3.7 billion) enterprise valuation in a sale to L’Oréal in April. Aesop made $US537 million in fiscal 2022 and had its highest-ever profit margin at 25 per cent at the time of the sale.

Global FMCG giants P&G, Mars, Amcor, and Delterra have launched a joint initiative to tackle plastic waste and help develop a more circular economy, with a US$6 million budget over the next five years.

The partnership comes in the lead-up to the second negotiating committee meeting for a Global Plastics Treaty, working to develop a “globally binding” instrument on plastic waste. 

Allison Lin, global VP for packaging sustainability at Mars, said the collaborative aims to create programs for waste management and recycling systems – particularly in the Global South – where there needs to be more infrastructure needed for waste management.

“We call on all parties gathering in Paris for the Global Plastics Treaty negotiations to agree on a regulatory framework that enables the creation of effective waste management infrastructure systems everywhere in the world,” said Lin.

Recognising that plastic pollution is a symptom of poor waste management, the partnership said it is committed to investing in programs along the full value chain, including the following:

• Upstream: Design a “waste out of the system” with Delterra’s global rollout of Plastic IQ, a digital tool that aims to change how companies understand and improve their plastic footprint. 
• Downstream: Work on the supply and demand side to capture recyclable and compostable materials and return them to productive use with Delterra’s Rethinking Recycling program while innovating material traceability solutions to provide transparency on matters such as source, quality and ethical concerns along the recycling value chain. 

Delterra president and CEO Dr Shannon Bouton added that solving plastic pollution requires rethinking how corporations produce and manage waste, including rapidly expanding waste collection and reliable recycling markets. 

“We are inspired that these organisations are stepping up to this challenge alongside Delterra, and we invite more companies to join this growing partnership,” concluded Bouton. 

The joint initiative said it would focus on countries of the global south, beginning with Indonesia, Argentina and Brazil. It aims to provide easier access to waste management and recycling systems and will explore new ways to improve the ecosystem.

Woolworths’ proposed acquisition of the Supa IGA store in Karabar, NSW has been opposed by the Australian Competition and Consumer Commission (ACCC).

Supa IGA Karabar is an independent supermarket that sells a range of groceries and liquor along with an attached liquor store (trading as Liquor Boss) located in Karabar, NSW.

The regulator concluded the transaction of the entities would likely “substantially lessen competition in the supply of groceries in the local area”.

The decision was made after analysing the spending habits of local consumers, including how often and how much local consumers spent at different supermarkets in and outside the local area.

ACCC chair, Gina Cass-Gottlieb, said: “Local consumers would be left with just one Coles and two Aldi stores as alternatives.”

Woolworths already operates two supermarkets in the neighbouring suburbs of Queanbeyan and Jerrabomberra while Supa IGA is the only independent supermarket in the local area.

“The more supermarkets or grocery stores there are, the better outcomes for local consumers, who can change where they shop based on the most competitive offerings for their particular needs,” said Gottlieb.

The proposed acquisition would also affect suppliers supplying to Supa IGA as they may not be stocked by Woolworths.

“The local Supa IGA competes with its different product mix, service offering and store amenities, and different promotional cycles.

“It also has the ability to make decisions locally, and to dynamically adapt and respond to changes in tastes and preferences of local customers,” said Gottlieb.