Supermarket struggles take knife to Maggie Beer Product’s bottom line

Maggie Beer’s food empire has served up a $250,000 half-year loss as it struggled in the key supermarket sales channel.

Maggie Beer. (Picture: Channel 10)

Tough times in retail are even pinching some of the best known and loved food brands, with TV chef and media personality Maggie Beer’s branded groceries suffering a $250,000 loss for the six months to December 31 as it was forced to spend more on promotions to drive sales and shoppers picked up cheaper priced items from the supermarket shelf.

While the much loved chef did pick up some deals to sell her ice cream on Etihad and Qantas flights, in the key channel of supermarkets it was a much harder sell for her foods.

The financial results for Maggie Beer Products were released as part of the latest financial filings for publicly listed company Longtable Group, which bought a 48 per cent stake in Maggie Beer’s food empire in 2016.

Maggie Beer Products, which produces goods including sauces, ice creams and quince pastes and which carry the famous chef’s name, has been struggling for the last few years amid difficult trading conditions in the grocery sector and tough competition between branded foods. The intense competition has forced many branded food groups to slash their prices or invest more in promotions and discounting, which crimps profits.

Longtable Group (LON) issued its latest financial results to the ASX this morning, and has revealed that Maggie Beer Products posted a loss of $250,000 for the December half, with Longtable Group’s share of that loss on its own accounts mounting to $120,000.

For the first half, revenue for Maggie Beer Products rose slightly to $11.09 million from $10.857m.

Longtable Group, whose chief executive Laura McBain once led infant milk formula group Bellamy’s, said the six-month period was “challenging” for Maggie Beer Products as it skidded to a trading loss.

The foods group suffered from a slower than expected rollout of its goods in Metcash, a sales product mix that was skewed towards products with lower margins — and therefore lower profits — increased promotional spend to remain competitive and $430,000 of new product development expenses.

Longtable Group is pushing through a number of initiatives at Maggie Beer Products to improve sales and profit but it warned these would only be “mildly incremental” over the second half with most of the impact expected to hit from 2019.

It said there were some positive “recent wins” for Maggie Beer Products including a successful pop-up store at Melbourne shopping centre Chadstone, which delivered good brand exposure and positioning in the months leading to Christmas, a review of ingredient sourcing to deliver improved profits and the ranging of Maggie Beer ice cream on Etihad and Qantas flights.

In 2014, the celebrity’s food company booked revenue of $21.1m, to produce earnings before interest and tax of just $1.11m and net profit before tax of $970,000. In 2015 Maggie Beer Products sales lifted slightly to $21.36m, with net profit before tax falling almost 50 per cent to $580,000.

Mrs Beer and her husband pocketed $5m from the sale of the 48 per cent stake to Longtable Group, with $10m to be reinvested in the company.

Longtable Group this morning posted revenue of $371,000 and a net loss of $3m for the half, up from a loss of $200,000 for the first half last year.