TasFoods Limited has wound up its organic poultry venture at Flowerdale and says plans to "reinvigorate" its Betta Milk brand will be applied in this quarter.
The company announced the organic poultry project in 2021, aiming to tap into expected demand growth.
However, it this year decided to ditch the operation as a revamped board and management team looked for ways to reset the Launceston-headquartered business, which has long struggled to be come profitable.
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"The organic poultry operation placed significant financial and operational stress on the broader Nichols (Poultry) business unit," TasFoods said in its June quarterly report.
"Organic poultry has not been profitable for Nichols since inception and, using the TasFoods capital management framework, we have decided to deploy the resources to other sectors of the business.
"We believe there is a future for Nichols to participate in the premium sector of the market through expansion of our Ethical Free Range offering and plans are under way to deliver that in a profitable manner."
TasFoods said its business had undergone significant change in the previous nine months and continued evolution was expected as it built capacity in processes, systems and people.
It said the changes were expected to improve efficiencies and lead to better financial performance and a platform for growth.
TasFoods bought Burnie-based Betta Milk for $11.5 million in 2019.
It said it assessed the milk and cream business' profitability in March and increased the prices of all product lines.
That led to reduced volumes in the June quarter of cream (by 23 per cent, compared with the previous corresponding period) and milk (5.4 per cent).
"However, revenue reduction was only 4.7 per cent and 0.7 per cent respectively, resulting in profitability being achieved in the Betta cream category and margin stabilisation in Betta milk," it said.
"We believe the Betta Milk brand strongly resonates with consumers and plans have been developed and will be executed in quarter three to reinvigorate this proudly Tasmanian brand."
The poultry division increased revenue by 1.6 per cent, compared with the previous corresponding quarter.
TasFoods' net operating cash outflows were negative $1.3 million for the quarter.
The company raised $5.7 million during the quarter, saying it was extremely pleased by the level of support from existing and new investors "who are aligned with management's vision for the future of TasFoods".
Sean Ford
The Advocate Newspaper, Tasmania. Business, economics, politics, crime.
The Advocate Newspaper, Tasmania. Business, economics, politics, crime.
