C C Grubb, chairman of So Natural Foods Australia Limited, told shareholders at the company’s annual general meeting yesterday that the largest soybean producer in Australia has reported a setback in its growth for the first time.
“I think it relevant to see the last year’s result in this context,” he stressed, however.

Grubb noted that while sales fell slightly over the last twelve months, profitability had dropped sharply and So Natural had to report its “first ever loss”. Furthermore, he said: “Our results might have been worse were it not for our product diversification, loyal consumers and very laudable growth in market share due largely to our highly successful rice drink.”

“The primary disappointment for us was the first decline in soy milk sales in the history of this food category,” he explained, which is down to several contributing factors: more competitive dairy milk since sector deregulation; TV coverage disputing the benefits of soy; appearance of soy in products other than milk; less soy advertising and a downturn in breakfast cereal consumption.
Grubb pointed to the legal costs of a court case against Sutherland Shire Council, over a 24 hour operating licence, as adversely affecting the company’s financial and operating performances: “These costs plus final provision for the ten year loyalty bonus for the CEO and other non-recurring corporate expenses tipped the company into the red.

“Without these non-recurring items we would have remained profitable and we expect a return to profitability this year.”
Grubb added that the company still has no clear completion date for its plan to turn its valuable soy residue by-product into an additional revenue stream. However, he was confident that “if we persevere with our innovative soy initiatives we can attract strong consumer support and successfully broaden our revenue base.”

During the last year, So Natural has roughly doubled its manufacturing capacity and improved its manufacturing flexibility.

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Grubbs also welcomed The Bega Co-operative Society as a significant shareholder after the close of the financial year. Bega’s buyout of 2.1million shares at 80 cents per share has strengthened So Natural’s balance sheet and has meant that the company is “already exploring export, production and
product development ideas which will assist our growth this year”.

Summing up, Grubbs said: “So Natural has weathered a much more difficult consumer environment than envisaged at this time last year.

“So Natural has been in the forefront of offering consumers affordable functional and nutritional foods which are not only ahead of these challenges, but are squarely aimed at meeting valid consumer preferences for a healthy and balanced dietary intake at all ages.

“Certified organic beans are used exclusively in our Australia’s Own soy drink range, our So Natural Fresh soy milk and now our soy yoghurts in yet another step in So Natural’s progress towards meeting its mission of providing ‘Nutrition For Life’.”