News

22 Nov, 2021
Harris Farm hopes to one day offer carbon negative products
Financial Review

Tristan Harris, the co-head of family-owned grocer Harris Farm, says he is looking forward to the day when customers can shop for a chocolate bar and get a carbon credit in return for their purchase.

Mr Harris said offsetting or avoiding carbon pollution in the production of food was the best way forward, but the retailer was working hard in every part of the business across its 10,000 products and thousands of suppliers to create a more ecological supply chain.

“So what we’re spending our time on at the moment is measure directly or get good enough proxies to measure carbon, and then allow the customers to opt in to offset,” Mr Harris told the UBS Australasia Conference.

“Obviously, it’s much better to avoid creating a carbon problem in the first place. I’m really looking for the time when we have carbon negative products so when somebody buys their bar of chocolate, they can get a carbon credit.”

Mr Harris said while it sounded relatively simple to bring all this information around production to the consumer, it was not.

“It’s going to take some innovative companies a bit of work to try to muster all that vast range of information and present it in a beautiful way to both retailers and customers,” he said.

Harris Farm is seeking to gain B Corporation status, spending time educating the consumer and seeking to move to 100 per cent renewable electricity by early next year.

Mr Harris noted Harris Farm also repurposed food: old bread was turned into bread crumbs and fresh kale was made into kale chips.

Consumers consider production

Anthony Pratt, the chief operating officer, northern operations, at JBS Australia, said the group was investing in high-end automation in its factories, which was improving the welfare of its people and creating higher global energy savings.

JBS Foods Australia is part of the Brazilian giant that is Australia’s largest meat and food processing company. The global company’s CEO recently made the commitment to go to net zero by 2040.

Mr Pratt added that if any business wanted to be a major player in any industry, as an operator, you felt the “gravity” of sustainability.

He said consumers made decisions to purchase your products or a competitor’s, taking production into account.

“If you’re not active in this space then it’s hard to get the consumers interested in your product,” he told the conference.

When asked about the rise in popularity of plant-based protein and if it would play a role in achieving its carbon reduction goals, Mr Pratt said there was no “silver bullet”.

“Will people eat more plant-based than animal protein? On the evidence we’ve got today, no. Plant-based protein has been around for a couple of years now, and it’s certainly a marketplace on its own that has contributed to people’s diets, but we’ve not seen any reprieve for our core products,” he said.

Brendan Savage, owner of Tolga Farm in Western Australia, said finding a cheap and efficient way to measure soil carbon would be welcome.

“Any work we’re doing with soil organic carbon testing, we’re in the infancy as far as that goes. We try and renew projects that were up and running in 2008 to 2012 ... but everything takes time as far as the bureaucracy goes,” he said.

Mr Savage hoped this project would enable him to go back to the sites and find out which practices had resulted in a beneficial change.

 

22 Nov, 2021
No alcohol Lyre’s spirits valued at $500m after latest raise
Financial Review

Lyre’s Spirit, which is producing strong growth from its range of no alcohol spirits, has raised $37 million in a capital raising which values the business at $500 million.

Queensland-based co-founder and executive director Carl Hartmann said on Wednesday that while some customers did not drink alcohol at all, there were many who were tired of waking up with hangovers and drank Lyre’s products in social settings or out at hotels and bars.

They were increasingly conscious of health and wellbeing and this trend had accelerated during the COVID-19 pandemic.

“In a lot of cases, people are using our products to moderate,” Mr Hartmann said.

Lyre’s, which takes its name from the lyrebird because the company set out to mimic a full range of spirits with similar tastes but no alcohol, was established in April 2019.

22 Nov, 2021
Treasury Wines buys Californian winery in $434m deal

The chief executive of Treasury Wine Estates has promised the high quality of the wines produced by luxury chardonnay maker Frank Family Vineyards in the Napa Valley in California will be maintained as it looks to step up volumes after a $US315 million ($434 million) acquisition.

Tim Ford said the quality would not be diminished as it sourced extra grapes from its own vineyards in California and contracted growers to expand the volumes of the No.2 player in the luxury chardonnay market in the United States.

“We simply won’t do it,” Mr Ford said. “We are not going to compromise the quality of these wines. We’d be silly to adjust the formulations.”

Frank Family Vineyards was established in 1992 by Rich Frank and sells wines in price brackets from $US38 to $US225 per bottle across grape varieties including chardonnay, cabernet sauvignon, pinot noir and sparkling wine. The flagship wine is a luxury chardonnay which is No.2 behind market leader Rombauer Vineyards.

Mr Ford said the acquisition would sit well with the company’s existing brands in the US and was a high-margin business delivering 37.9 per cent earnings margins, compared with the current Treasury Americas operations which generate overall margins of 17.2 per cent.

 

22 Nov, 2021
Treasury Wines buys Californian winery in $434m deal
Financial Review

The chief executive of Treasury Wine Estates has promised the high quality of the wines produced by luxury chardonnay maker Frank Family Vineyards in the Napa Valley in California will be maintained as it looks to step up volumes after a $US315 million ($434 million) acquisition.

Tim Ford said the quality would not be diminished as it sourced extra grapes from its own vineyards in California and contracted growers to expand the volumes of the No.2 player in the luxury chardonnay market in the United States.

“We simply won’t do it,” Mr Ford said. “We are not going to compromise the quality of these wines. We’d be silly to adjust the formulations.”

Frank Family Vineyards was established in 1992 by Rich Frank and sells wines in price brackets from $US38 to $US225 per bottle across grape varieties including chardonnay, cabernet sauvignon, pinot noir and sparkling wine. The flagship wine is a luxury chardonnay which is No.2 behind market leader Rombauer Vineyards.

Mr Ford said the acquisition would sit well with the company’s existing brands in the US and was a high-margin business delivering 37.9 per cent earnings margins, compared with the current Treasury Americas operations which generate overall margins of 17.2 per cent.

The Frank Family Vineyards business had increased revenues every year since 2009 and been largely unaffected by the pandemic, selling all the product made by its winemakers.

“They have sold what they’ve made,” Mr Ford said. “The chardonnay is the big prize for us.”

Treasury Wines expects to unlock more potential as it brings the business into its own operation, which has a much larger distribution network in the US and lifts volumes by making more wine. It also aims to pull out $US5 million in cost synergies.

Frank Family Vineyards sells about 50 per cent of its wine in independent liquor stores, 40 per cent in restaurants and bars, and 10 per cent direct to the consumer.

Treasury Wine Estates has been steadily exiting from lower-priced commercial wine operations in the US and its strategy is to shift further into the premium end of the market in that country. Its previously lucrative China business has been decimated by punishing tariffs imposed by the Chinese government, which have undermined overall profit growth.

Mr Ford said the US wine market more broadly was gathering momentum as the economy opened up and the on-premise trade returned.

Frank Family Vineyards marks the biggest acquisition in the United States in six years for Treasury Wines, which acquired most of alcoholic beverages giant Diageo’s wine division for $754 million, in late 2015, under previous chief executive Mike Clarke.

Frank Family Vineyards produced net sales revenue of $US54 million in 2020-21 and US$21 million in earnings before interest, tax and the SGARA agricultural accounting standard.

Luxury wine portfolio

The assets being acquired include the Frank Family Tasting Room in Calistoga, the Benjamin Vineyard in Rutherford, the S&J Vineyard in Capell Valley, and the portfolio of luxury wines. About 30,000 visitors attended the cellar door in 2019, before the pandemic.

Under the deal, Rich and Leslie Frank will maintain the ownership of Winston Hill Vineyard in Rutherford and the Lewis Vineyard in Napa, Carneros. Both vineyards will continue to source grapes for the Frank Family reserve tier of wines.

The acquisition is being funded by the combination of a new $US240 million underwritten acquisition bridge facility and cash from proceeds of US commercial wine divestments.

Mr Ford said Treasury Wines had largely completed its program to divest non-priority US portfolio brands and assets, with total net cash proceeds of around $300 million in Australian dollars. Some of the brands offloaded include Beringer Main & Vine and Beringer Founders Estate.

One of Treasury Wines’ fastest-growing brands in the US is 19 Crimes, which sells at a substantially lower price than the Frank Family Vineyards portfolio.

The 19 Crimes brand, fronted by a big marketing and advertising push featuring American rapper Snoop Dogg, has grown into a 5-million-case-a-year business around the world, but generates most of its sales in the US.

15 Nov, 2021
GrainCorp ‘benefiting’ from global supply chain crisis, says CEO
SOURCE:
The Age
The Age

The boss of ASX-listed GrainCorp says the grains giant has side-stepped and even benefited from the global supply chain crisis after reporting a $139 million profit in 2021 due to bumper harvests.

Pandemic-triggered disruptions in the global supply chain have left many retailers short of stock and consumers have been warned to start their Christmas shopping early amid major delays caused by ongoing shipping issues.

However, GrainCorp chief executive Robert Spurway said his company had managed to avoid the supply chain issues because more than 95 per cent of GrainCorp’s goods are delivered in bulk, meaning they do not require shipping containers, which are in short supply and the cause of major congestion and delays.

“If anything, supply chain challenges globally have benefited us,” Mr Spurway said on Thursday at the company’s 2021 financial year results.

He said only two of GrainCorp’s 115 vessels carrying grain experienced minor delays this year, which was “unusual” in the current environment. “In my experience over the years of global shipping, that’s almost unheard of,” he said. “That gives me huge confidence as to our resilience in terms of the model we operate, the decisions we make.”

Likewise, ingredients, packaging, imports or exports associated with the processing business have experienced no interruptions, he added. “That’s not just through good luck. It’s through very good management, working with our suppliers and our partners to make sure we’re planning ahead.”

GrainCorp posted an underlying net profit of $139.3 million for the 2021 financial year, up from a $16 million loss the year before. The company more than doubled its dividend to 18 cents per share fully franked, up from 7 cents per share in the 2020 financial year.

Mr Spurway said 2021’s “bumper” harvest was due to excellent growing conditions and the end of three years of drought which allowed farmers to plant “just about a full crop”. The company expects the favourable conditions to continue through to the 2022 financial year.

“There’s very strong evidence that that’s absolutely continuing across the rest of the country. Farmers are now just working through the logistics of getting that crop harvested and bringing it into storage.”

GrainCorp shares were down 1.64 per cent to $6.57 in late afternoon trading.

9 Nov, 2021
Coca-Cola set to buy Gatorade rival BodyArmor
Inside FMCG

The Coca-Cola Company has acquired an 85-per-cent stake in BodyArmor, a line of sports performance and hydration beverages, after taking a 15-per-cent share three years ago. 

The deal, valued at US$5.6 billion, will see BodyArmor managed as a separate business within Coca-Cola’s North America operating unit. The brand will keep its base in New York, while the co-founder and chairman, Mike Repole, and president Brent Hastie will continue their roles at the company. 

“BodyArmor has been a great addition to the system lineup over the last three years,” said Alfredo Rivera, president of the North America operating unit of The Coca-Cola Company. “The company has driven continuous innovation in hydration and health-and-wellness products.”

Under the partnership, Coca-Cola and Repole will also collaborate on BodyArmor’s still beverages portfolio, including marketing, packaging and innovation strategies across multiple brands. The company will continue to be distributed by the US Coca-Cola bottling system. 

According to the company, BodyArmor is currently the number two sports drink in the category in measured retail channels, growing at about 50 per cent to drive more than US$1.4 billion in retail sales.

“Ten years ago, we set out with a vision to create a better-for-you sports drink with a goal of becoming the number one global sports drink,” Repole said. “Our talented leadership team under Brent Hastie, our 400 dedicated employees and incredible Coca-Cola bottling partners have helped us build this remarkable brand.” 

9 Nov, 2021
Wesfarmers bid to pick up Priceline owner API in health play succeeds
Inside Retail

Wesfarmers will acquire 100 per cent of Priceline Pharmacy-owner Australian Pharmaceutical Industries, signaling the retail conglomerate’s entrance into the wellness space.

API had been locked in a tug of war between Wesfarmers and fellow pharmaceuticals firm Sigma, which made a bid at keeping Wesfarmers out of the health space, but ultimately stepped out of the contest over the weekend after the retail business upped its ownership of API to 19 per cent and said it would vote against Sigma’s deal.

Wesfarmers’ offer landed at $1.55 per share, signaling a 35.4 per cent premium to the business’ closing share price as of 9 July, and a 36.8 per cent premium to its one-month weighted average.

API’s board recommends its shareholders vote in favour of the deal, which will still need to be approved by the ACCC, and which is expected to be completed in the first quarter of calendar year 2022.

According to Wesfarmers, the aim of the buy-up is to enable the conglomerate to enter the “growing health, wellbeing and beauty sector”.

“API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector,” Wesfarmers’ managing director Rob Scott said earlier this year.

“The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our business for growth over the long term.”

8 Nov, 2021
George Weston Foods cleared to buy NZ’s Dad’s Pies
Inside FMCG

Allied Foods has received regulatory approval to proceed with its planned acquisition of independent rival bakery Dad’s Pie’s. 

The Commerce Commission said today it had granted clearance to Allied Foods’ subsidiary George Weston Foods NZ to buy the business. Both companies make savoury pies and sausage rolls retailed through supermarkets, dairies, convenience stores, petrol stations and food distributors that supply cafes and restaurants. Allied’s pies bear the Big Ben brand, while Dad’s sells them under its own name, along with The Baker’s Son in supermarkets. 

Commissioner Dr Derek Johnston said in a statement that the commission is satisfied the acquisition is unlikely to substantially lessen competition in any New Zealand market. 

“Our investigation found that GWF and DPL are not each other’s closest competitors in New Zealand. Customers consider Big Ben to be a ‘base’ or ‘mainstream’ pie, whereas Dad’s Pies are considered to be ‘premium’ pies,” he said.  

“We also found that GWF and DPL compete against several large and well-resourced competitors, including from Australia. Post-merger, we expect that the merged entity will face significant competition from these players for all the different types of customers they supply.” 

4 Nov, 2021
Lark Distilling buys Tasmanian rival for $40 million, plans expansion
Inside FMCG

Listed Australian single malt whisky distiller Lark Distilling Co is to pay $40 million to acquire Kernke Family Shene Estate, the owner of the Pontville Distillery and Estate. 

Lark will raise $53 million to complete the purchase and fund construction of a 1 million litre distillery on the acquired land as well as accelerate the company’s export strategy.

Pontville is located north of Hobart in Tasmania and the site includes 16ha of land, a 130,000-litre distillery, cellar door, bond stores, cooperage, stables and homestead. 

Pontville will become Lark’s third working distillery in Tasmania, alongside its Cambridge and Bothwell sites and will contribute to the inhouse production of 576,000 litres of Lark whisky each year. Lark at Pontville will commence distilling in February and open its cellar door there with Lark’s master distiller Chris Thomson and his team will continue to oversee whisky distilling, and product development for the combined business. 

The new 1 million-litre distillery is scheduled to be commissioned in 2023. 

“The acquisition of the Pontville Distillery and Estate supports our vision of becoming a global icon in single malt whisky,” said Lark Distilling’s MD Geoff Bainbridge. “This builds on our vision to become the world’s most innovative distiller.”

Bainbridge said the assets provide significant whisky inventories on value-accretive terms and re-balance the maturity profile of the company’s whisky under maturation. 

“Critically, the age profile and quality of the whisky under maturation being acquired will enable The House of Lark to commence an export programme from FY23 which is approximately 12 months ahead of previously published plans.”

With the acquisition including 483,000 litres of whisky under maturation, Lark now expects to have more than 2 million litres of whisky under maturation as of June 30 next year, valued at around $435 million. 

The deal is binding with settlement scheduled for early next year. 

4 Nov, 2021
‘Like a cheesy Hollywood start-up movie’: Here’s what happened when Australian start-up Zero Co crowdfunded $5 million in under 7 hours
Business Insider
  • Australian start-up Zero Co broke records on Tuesday by raising $5 million in crowdfunded investment in less than seven hours.
  • Founder Mike Smith said the day felt like “a cheesy Hollywood start-up movie.”
  • The funding, and additional investment, will see the company expand its range of refillable personal care and household products

Mike Smith and the team at Zero Co expected Tuesday’s equity crowdfunding round to succeed. What they didn’t anticipate was $5 million in new investment in less than seven hours, breaking records to become one of the most spectacular crowdfunding rounds in Australian history.

“It was ridiculous to be completely honest with you,” Smith told Business Insider Australia. “It was a wild, crazy, rollercoaster of a day… It felt almost like a cheesy Hollywood start-up movie.”

 

‘Just crazy’: Zero Co breaks Birchal crowdfunding records

 

Australian start-up Zero Co launched in 2020, pledging to cut down on single-use plastics with refillable personal care and home cleaning products under a direct-to-consumer model.

Boosted by a compelling product, savvy marketing, and an initial $250,000 Kickstarter campaign, Zero Co says it now services 43,000 Australian households, accruing $8.2 million in total sales.

Seeking the funds to expand its operations at home and abroad, Zero Co took to equity crowdfunding platform Birchal to seek a maximum of $5 million in fresh investment.

Pre-registration opened 11am Tuesday, with the offer set to open to the general public on Thursday.

Smith would not need to wait that long. When the dust settled, 3,082 investors had contributed the full $5 million in six hours and 27 minutes.

Zero Co’s funding round became not only the largest in Australian history, but the fastest to meet the $1 million and $3 million marks.

“Honestly, people were dancing and hooting and screaming in the office all day,” Smith said.

“We were quietly confident that we were going to be able to reach the $5 million maximum funding limit. But we had no idea that it was going to happen as quickly as it did.

“You know, most of us thought it was probably going to be about a week long campaign and to have it done in under seven hours was just crazy.”

Although the target has been reached, the round will officially close on Thursday, 4 November. Smith said over half a million dollars is effectively sitting in a “waiting list”, should existing investors pull out in the coming days.

The round also serves as a major victory for platforms like Birchal. The ability to meet investor demand for start-up equity powered the sector to its biggest-ever quarter through September, the company said. The Zero Co round suggests the field has more room to grow.

 

‘Big demand out there for products like ours’

 

The crowdfunding success was backed by a further $6 million in investment from venture capital fund Square Peg, and a $2 million boost from existing investors — a roster including names like Koala founders Dany Milham and Mitch Taylor, and Atlassian co-founder Scott Farquhar.

Smith said the Square Peg investment came under the same terms and price as the crowdfunding offer.

That funding will go towards the expansion of Zero Co’s range to 30 personal care and household products, each of which will fit into the company’s circular economy philosophy.

Strong interest in the company has reflected an unmet demand for reusable products across a range of categories, Smith said.

“There is this big demand out there for products like ours, and in in all kinds of different product categories that are more sustainable and have less of an impact on the planet,” he said.

The funding will allow Zero Co to set its sights on the European and North American markets, he added.

“We want to go after the big fish,” Smith said. “And, you know, markets that we can have a really oversized impact on the single use plastic problem.

“Going into a market with 300 million customers that are all using single use plastic every day is really exciting for us, and the impact that we can therefore have on the problem [of single-use plastic].”

And if the launch was a Hollywood movie, Smith already has eyes on the sequel: building out the circular economy worldwide, and providing a template for other major producers to emulate.

“Big ships take a long time to turn,” he said.

“But they are they are starting to, and I’m heartened by some of the experiences I’m having with the companies about their ability and their willingness to want to kind of do the right thing.”

APPLY NOW

Upload Resume/Portfolio

One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
One file only.
5 MB limit.
Allowed types: pdf, jpg, jpeg, doc, docx.
* Required Fields. † For Designers, Design Assistants and Product Developers please attach your Portfolio including sketches, illustrations, trend boards, finished products etc... Please send through in pdf or jpg format. File uploads maximum size 5MB.