Milklab to drive Noumi’s return to profit

Noumi (formerly Freedom Foods) will throw its weight behind its popular plant-based barista milk brand, Milklab, in an attempt to bring the company back to profitability, as global milk prices edge up and the plant-based movement gains further traction.

The ASX-listed food company’s earnings dived 79 per cent to $4.6 million in the first half of fiscal 2022, as COVID lockdowns, supply chain issues, staffing shortages and rising costs ate into the company’s bottom line.

Milklab is the most popular brand in Noumi’s (formerly Freedom Foods) stable.Credit: Christopher Pearce

However, Milklab was a standout performer among Noumi’s portfolio of brands that include Australia’s Own, So Natural and Vitalife, with sales shooting up 32 per cent in Australia and 64 per cent in export markets despite the pandemic interruptions.

Noumi chief executive Michael Perich said Milklab would be a key focus for the business as it continues to mitigate COVID headwinds such as rising milk costs and staff shortages.

“More and more people are migrating to having regular coffees using plant-based [milk], and that continues to grow. That’s an important area for us to focus on,” Mr Perich told the Sydney Morning Herald and The Age. Noumi will also look to ramp up exports, with its latest oat milk product performing well, he said.

“Definitely for Noumi, [the] plant-based [movement] is a significant driver of revenue growth, and that is a key area of focus for us.”

Mr Perich is among a number of other food and hospitality leaders, including Grill’d co-founder Simon Crowe, Betty’s Burgers’ parent company chief Nishad Alani, and even poultry supplier Ingham’s boss Andrew Reeves who are eager to meet growing consumer demand for animal product alternatives.

Mr Perich acknowledged that inflationary pressures had led to higher input costs for raw materials such as milk, which Noumi would be passing onto its retail and distributor customers and likely onto the consumer. Global milk prices see-sawed immediately after the pandemic and have risen steadily since, and are now at levels not seen since late 2020.

“There is continued pressure on world dairy prices, which is across the board, so we will work with our customers around passing on those prices as we need to,” he said.

Noumi CEO Michael Perich.

But he added that Noumi was contending with rising input costs across other fronts, such as packaging and fuel.

All of Noumi’s key metrics were down across the board for the first half of the 2022 financial year, with net revenue down 7 per cent to $265.3 million.

The company posted net losses after tax of $65.8 million, which had blown out by $50.8 million since the same period the year prior. The lion share of these losses were attributed to a US litigation settlement.

The Omicron wave that hit during Christmas is still affecting sales numbers, with geopolitical risks contributing to price volatility.

The company is currently facing a shareholder class action that is before the Supreme Court of Victoria over alleged misleading financial reporting between 2014 and 2020.

Noumi shares slumped over 10 per cent to 26 cents following the half-year results.

The company’s share price plunged in 2020 after the then-chief executive left abruptly, leaving major shareholders the Perich family to step in.

The company changed its name to Noumi late last year after selling its Freedom Food brands to Arnott’s.

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