TasFoods benefits as world craves clean, green food

Has there ever been a better time to be an agricultural company based in isolated Tasmania?

The TasFoods portfolio of produce includes poultry, dairy and homegrown wasabi.

TasFoods, the micro-cap premium food specialist whose portfolio of produce includes poultry, dairy and homegrown wasabi, believes there has never been a better time to be an agricultural company based in isolated Tasmania with the world craving clean and green food.

Addressing shareholders at its annual general meeting, TasFoods chief executive Jane Bennett also said the producer is positioning to benefit from an expected consumer shift to cheaper proteins like chicken as the economy worsens.

The new financial year had witnessed a growth in sales and earnings across its key food divisions, however the dairy arm had been pinched by the shutdown of restaurants and cafes with the company working with its retail partners to keep pace with switches in consumer demand.

Although only having a market capitalisation of a little over $26m, the Tasmanian-based diversified food producer has had plenty of corporate intrigue and turmoil in the past few years including a revolving door of chairman, directors and CEOs, with some of the friction coming from its biggest shareholder, controversial businesswoman Jan Cameron, who owns 15 per cent.

Its former chairman Shane Noble has launched legal action in the Fair Work Commission against three TasFoods directors alleging breaches of the Fair Work Act when he was ejected in June.

Despite growing sales, TasFoods has consistently failed to return a profit. Its losses have been growing, but the company believes it is now in a position to leverage its portfolio of Tasmanian foods and benefit from the island’s isolation amid the global coronavirus pandemic.

“We believe that great food comes from great places. With its clean air, abundant rain, rich soil and temperate climate, Tasmania is ideally suited to creating the finest food produce,’’ Ms Bennett said in her AGM address.

“Never has there been a better time to live on a sparsely populated, remote island in the southern hemisphere. Tasmania has a natural barrier of water providing excellent conditions for managing biosecurity which have been demonstrated in the current COVID environment. This biosecurity barrier also provides benefit for intensive livestock industries such as poultry and sensitive crops like wasabi.”

Unprecedented shifts in poultry markets experienced since March have created significant uncertainty as the industry experienced rapid changes to demand mix and volume.

She said its Nichols Poultry sales for the first half of 2020 were higher than the same period for the previous year, however changes to product mix and volumes had impacted gross margins.

The business responded quickly to demand changes by realigning chicken volumes in agricultural operations.

“Demand for chicken meat is forecast to grow as consumers downgrade protein choices in a tougher economic climate.”