Australian baby food company Bellamy’s Australia Limited (Bellamy’s) has announced strong revenue growth of 141 per cent to $58.3 million and net profit growth of 137 per cent to $3.2 million for the six months ended 31 December 2014.

Australian Food News had previously reported on the July 2014 public float of the Tasmanian-based Bellamy’s business and the August 2014 soaring of its share price.

Bellamy’s Organic started in Launceston, Tasmania in 2004 as a family-operated company. It was the first to offer an organic baby formula range in Australia. Tasmanian Pure Foods Ltd purchased Bellamy’s Organic in 2007.

The Company supplies its certified organic product range, which includes infant and toddler formula, as well as baby foods and snacks, to Woolworths, Coles, independent supermarkets and pharmacy chains.

It also exports its food to China, Hong Kong, Taiwan, Singapore, Malaysia, Vietnam and New Zealand. The Company said strong demand for its baby foods in Asia had led to the opening of offices in Singapore, Shanghai and Hong Kong.

“The Company’s first half result reflects a growing business that is deliver operationally,” said Laura McBain, Bellamy’s Managing Director and CEO. “Our objective is to continue growing both our domestic and export business through a focus on expanding our distribution networks, and this has been clearly achieved over the past six months,” she said.

Australian market growth

Ms McBain said Bellamy’s had also consolidated its position with major retailers in the Australian market. She said the Company had extended its reach through distribution into pharmacies and independently owned stores.

“Underpinning this growth has been greater brand awareness built through effective marketing strategies, key to achieving Bellamy’s revenue growth in Australia,” Ms McBain said.

Bellamy’s organic formula and food range was launched in 160 Target stores nationally during the first half of the 2015 financial year. The Company also now has products available in 450 Amcal, AmcalMax and Guardian stores.

“In addition to growing multiple distribution channels, we continue to innovate on the product front,” Ms McBain said. “Over the past six months we launched new product initiatives such as the baby food pouch range in Costco and Big W,” she said.

Export growth strategy

Ms McBain said Bellamy’s overseas growth strategy was gaining momentum as the Company consistently attracted new customers and expanded its retail distribution.

“China in particular has shown strength as we have expanded into major supermarkets and launched our organic formula range in 160 Wal-mart stores in Guandong,” Ms McBain said.

Attaining sustainable cost structures

Bellamy’s reported a strong gross profit margin of 33.2 per cent, albeit slightly down on the previous corresponding period (35.4 per cent). The Company said this was largely due to increased ingredient pricing, in particular whole milk, as supply was stretched due to Bellamy’s sales growth.

Bellamy’s said it has successfully implemented changes to address this issue and expected to see the benefits of these initiatives flow into the full 2015 financial year result.

Outlook

Ms McBain said Bellamy’s had in place a “comprehensive strategy” to continue growing the Company.

“We are committed to expanding Bellamy’s globally, with a focus on developing the brand’s opportunities in Asia, particularly China and South East Asia,” Ms McBain said. “In addition, we have identified key markets for growth outside of Asia that are being considered,” she said.

“Innovation and distribution are at the heart of our growth strategy,” Ms McBain said. “We continue to develop the category with new products and also improve and enhance existing products,” she said.

Ms McBain said Bellamy’s was seeking full distribution across Australia through a range of distribution outlets.

“Supply chain management underpins the Company and we continue to build relationships with suppliers to support future growth requirements for organic ingredient supply and manufacturing capability,” Ms McBain said.

“We are excited about what the second half of this financial year holds for the business, and we continue to trade strongly,” Ms McBain said. “Recognising that December is a key trading month, and provided trading conditions remain the same, Bellamy’s second half performance should be consistent with its first half results,” she said.