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Rhodes Food Group: Strong Regional and International Volumes Lift Turnover 20%

Strong growth in both the regional and international businesses contributed to RFG increasing group turnover by 20.0% in the first 22 weeks of the 2022 financial year.

The results include an additional trading week relative to the prior period and excluding the impact of this 22nd week, group turnover increased by approximately 15.2%.

CEO Pieter Hanekom said while turnover has been buoyant, margins remain under pressure due to significant increases in input costs. The major impacts are tin plate used in food cans, global commodities, raw materials such as meat and fats as well as international freight costs. “In the constrained consumer spending environment, it is particularly challenging to recover the higher input costs through price increases.”

Turnover in the regional segment, which includes South Africa and 16 other African countries, increased by 16.1%.

The two best performing long life food categories were fruit juice and dry foods. Fruit juice achieved high double-digit sales growth due to robust volume growth which contributed to increased market share in this highly competitive category. Dry foods also achieved strong sales growth supported by good volume growth.

Sales into the rest of Africa grew by 12.0%, with continued good growth in fruit juice, dry foods and canned meat and vegetables.

Fresh foods turnover increased by 13.4%. Ready meals continue to prove resilient in the weak consumer spending environment and achieved good volume growth. Pie sales recovered and the category recorded double-digit volume growth. However, meat price inflation and increased competitor activity continue to place pressure on margins.

International turnover increased by 44.1% due to strong demand for the group’s canned fruit products. Hanekom said the increased demand has been supported by the failure of last year’s peach crop in Greece, the world’s largest exporter of canned peaches.

“Good volume growth has been achieved despite the ongoing global logistics challenges and congestion at the Cape Town port which continues to create a shipping backlog. Shipping challenges have contributed to significantly increased sea freight costs since the start of the Covid-19 pandemic, while also impacting the group’s raw material imports,” he said.

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