Food producer RFG Holdings has reported a 5.6% increase in regional revenue for the five months to end-February, however, revenue in its international segment fell 19% due to declining demand and shifting market dynamics.
The group grew total revenue by 2.1% to R3.1bn, as domestic sales helped offset a sharp decline in international exports.
The group’s regional segment reported a strong recovery in volumes in both fresh and longlife foods, despite consumer spending remaining under pressure in the domestic market, it said on Monday.
However, the group’s international segment saw revenue tumble 19.1%, as export volumes plunged due to unfulfilled canned deciduous fruit contracts and the effect of last year’s drought in Eswatini, which hampered pineapple supplies. A stronger rand also weighed on international turnover.
Fresh foods led the charge, with ready meals and pies showing significant volume growth, while longlife foods saw double-digit revenue growth in fruit juice, dry foods, and pulps and purées. New product launches, such as the fruit nectar juice range, proved key in driving consumer demand, the group said in a trading update.
This growth came despite a challenging consumer environment, marked by constrained spending and price sensitivity. The group said regional volumes surged 8.7% from a 5.7% decline in the prior period, though price deflation of 0.6% reflected pressure on pricing.
RFG said it expected the positive regional momentum to continue, though it acknowledged that SA consumers were still under strain, despite recent signs of relief from interest rate cuts and lower inflation.
“In the international segment, lower revenue and price deflation has resulted in margin pressure and the group does not expect to meet its operating profit margin target guidance for the first half,” RFG said.
“The shortfall in international revenue from deciduous canned fruit for the period should start recovering from March onwards.”
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