Arnott’s strong FY20 results provide clear evidence of this year’s unprecedented consumer trend of returning to brands they know and trust during the uncertainty and stress of COVID-19.
In March to June, it recorded additional sales of four million packs of chocolate biscuits, two million cans of soup, 2.7 million packs of stock and a million more units of V8 Juice.
If there was not enough evidence of the sombre mood of the nation during a pandemic, then the 270 million Tim Tams sold in Australia is fair indication.
For the new Arnott’s Group CEO George Zoghbi it is a strong foundation for future growth and also a reflection on the company’s legacy as one of Australia’s oldest and most trusted brands.
He replaced the interim CEO Brian Driscoll, who is also board chair for investment firm KKR, which bought the company in December last year from Campbell Soup Company. KKR paid $2.2 billion for most of Campbell’s international operations, which included Arnott’s.
Strongest financial performance “in years”
The company recorded six per cent sales growth year-on-year, largely driven by COVID-19 lockdown restrictions which saw more people cooking at home and a lot more snacking by everyone.
Growth in export markets – New Zealand, Malaysia, Japan and Hong Kong also played a part.
Zoghbi said COVID-19 related supply chain constraints led to production cost increases of around six per cent but were offset by efficiency measures.
Zoghbi said the company is setting its sights on building the group into a regional powerhouse of consumer food brands.
“Over the next three years, The Arnott’s Group will expand its reach across key geographies in Asia Pacific to become a leading regional consumer food business.
“From our headquarters in Sydney, The Arnott’s Group will invest in key Asian markets; our ‘Tim Tam takeover’ will accelerate growth in biscuits, snacks, soups and meals in select geographies,” he said.
The company has also invested $66.4 million in new infrastructure to modernise its baking facilities in Australia.
New corporate identity
The new identity – The Arnott’s Group – and a refreshed corporate logo have also been released, as part of its strategy to build the company into a multinational consumer food business across the Asia Pacific.
Arnott’s said the new logo was designed to express this next generation of the business by capturing its proud history, including the vibrant colours of the parrot which is one of the most recognisable brand symbols in Australia.
The new corporate identity is not consumer facing, and there are no changes to the Arnott’s logo on its biscuits.
Zoghbi said its regional growth will be based on the company’s history, recognising its privilege to be a locally run business with local ingredients and Australian authenticity.
“Despite unprecedented pressure on many suppliers due to COVID-19 and the summer bushfires, we purchased over $110 million in fresh ingredients from Australian and New Zealand farmers.
“Over 72,000 tonnes of Australian flour, 23,000 tonnes of Australian sugar and 4400 tonnes of Australian and New Zealand-made dairy products came into our baking and cooking facilities.
The group uses RSPCA-approved cage free eggs and used more than 10 million eggs last year.
Zoghbi said it used 489 tonnes of UTZ-certified cocoa products to support sustainable and socially responsible cocoa production worldwide. It also only uses RSPO-certified palm oil products
“Across Australia, we work with the farmers who harvest our wheat, the bakers and chefs who bring our biscuits, soups and snacks to life and our partners who keep grocery shelves stocked so Aussies can always find their favourite brands in store. We have a responsibility to continue that legacy for many generations to come.”
“A big part of our strategy will be investing in our people and products while minimising our environmental impact and supporting the communities in which we operate,” he said.