Food producer RFG said on Tuesday that its group revenue grew 21% in the 11 months to end-August, but noted that it was still a challenge to pass on input cost increases to hard-pressed consumers.
Like its peers, RFG has had to increase selling prices to cushion themselves against the surge in prices of soft commodities, which has been aggravated by Russia’s invasion of Ukraine.
SA is home to a range of branded and private food labels, all of which compete for a share of consumers’ wallets.
“The group continues to experience significant inflationary pressures from higher input costs caused by rising global commodity prices, particularly in tin cans, meat and oils,” RFG said in a trading update.
“Management has made good progress in protecting margins by recovering the increased costs from customers and consumers, but it is still proving challenging to fully recover cost increases in certain key product categories.”
RFG, which produces fresh, frozen and long-life food brands, said its international business boosted group revenue, growing 66% during the review period, reflecting strong demand for canned fruit and fruit puree products.
Export volumes grew 22.5%, supported in part by a poor peach crop in Greece, the world’s largest exporter of canned peaches, as well as a weaker rand.
Export growth has also benefited from the easing of congestion at the Cape Town port, although global shipping and logistics challenges are still adversely affecting sales, contributing to higher freight costs.
Revenue in the group’s regional segment rose 11.5% with volume growth of 5.2% and price inflation and product mix changes of 6.3%.
By the JSE’s close, the company’s share price had leapt the most in nearly two months, up 8.36% to R10.50. It is, however, still down about 40% over the past five years.
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