Ann: Market Update, page-120

The annual report is to be released in the morning, Aus time 14th. If last year is anything to go by there should also be an investor update being released anytime soon. Last years August update gave an in-depth breakdown of how each division was performing, which will be interesting to see, especially for the food division. All that is currently known about the food is that the 2019 harvest to date far exceeds that of 2018, but there has been no info on whether crops were planted in states other than Tasmania. It is also known that Woolworths are as of this month a customer.
I know that Ananda Food are listed to exhibit at Fine Food Australia expo , which starts on 9th Sept.at the ICC Sydney.
Looking at the bar chart that featured on page 4 of last years Aug update, it looks like the food sales increased in the same meteoric way the Nutraceuticals did in the first seven weeks of the 2018/19 financial year.
Some of the key snippets about the food divison from last the 2018 August update
• Could sell everything we grow and more
• Holding 20% of seed for ~2,000 ton of capacity in 2019
• New business model improve gross margins significantly
• Thomson’s brand very committed to plant based super food
• New white label clients will come on board when we can provide supply at scale
• Lots of unmet demand for hemp seed in Australia today. Some being met by imported seed.
• Balance 2018 sales -v future output targets
• 2018: 360 ton of output (70 ton saved for 2019)
• 2019: 2,000 ton of output
• 2020: 5,000 ton of output
• Output targets require land, farmer training and planting seed. Scale takes time to build properly
• Key actions: seed management and large scale farming partners
• Ecofibre has built and will add additional infrastructure to handle 15,000 ton of food processing capacity
1. Strategy –White label first for scale and then build smaller own retail brand
2. Build scale to support growth strategy. Requires a lot of land longer term BUT planting seed in shortterm
3. New business model in place to build margin from COGS perspective first
4. Future margins driven by product development and use of ‘by-product’