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October 26, 2021

Edita Food Industries to up prices to tackle rising costs

The Egypt-based bakery group grew its revenues by more than a third in the first half of the year.

Egypt-based bakery group Edita Food Industries has set out plans to increase prices on products sold under its flagship brand Molto.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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The London-listed company said the hikes would improve profits amid “global inflationary pressures and rising commodity prices”.

Edita generated a net profit of EGP163.7m (US$10.4m) in the opening six months of 2021, up sharply on the EGP67.5m booked a year earlier.

Gross profits rose 27.2% to EGP736.5m on the back of a 33.7% increase in revenue to EGP2.32bn. Edita’s gross profit margin stood at 31.8%, compared to 33.4% in the first half of 2020. When Edita announced those numbers in August, the company said the “cost of direct materials” had grown by almost 71% in the second quarter versus a year earlier.

In a stock-exchange filing yesterday (25 October), the company said Molto products previously priced at EGP2 per pack have been raised to EGP3. Items that were priced at EGP3 a pack have moved up to EGP4. Edita said Molto SKUs priced at EGP5 per pack “have been left unchanged”.

Chairman Hani Berzi added: “Having introduced a host of innovative new products in 2020 and 2021 and made important investments in expanding our production capacity, Edita has moved to leverage its dominant market position by adjusting price points across our Molto product range.

“Besides marking important progress on our portfolio optimisation strategy, the increases will help mitigate the effects of heightened raw material costs, which come as global energy shortages and supply chain dislocations have pushed global commodity prices to multi-year highs.”

Edita manufactures branded snack products including packaged cakes, croissants, biscuits and confectionery. It exports to 17 markets in the Middle East and north Africa.

In 2020, the company generated revenue of EGP4.02bn, flat on a year earlier. More than 42% of its revenue came from packaged cakes. Net profit was EGP302.2m, down 16.6% on 2019.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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