New Zealand food group Keytone Dairy has entered a two-year agreement with local retailer Foodstuffs to manufacture and supply own-label milk powder products.
Keytone, listed in New Zealand and Australia, estimates initial sales from the deal for whole and skim milk powders of NZD7.1m (US$4.8m), with NZD500,000 in orders already received.
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The own-label products will be produced at Keystone’s plants in New Zealand, with the agreement expected to run beyond the two years.
Keytone CEO Danny Rotman said: “Based off our track-record and leveraging our credentials, world class facilities and reputation, Keytone has successfully tendered and won this significant contract in New Zealand for the supply of milk powder.
“While this is a large domestic contract, based off discussions to date, Keytone believes there is further upside in the value of the sales over the initial term not to mention the opportunity to sell in our range of high-margin proprietary products to Foodstuffs, New Zealand’s largest grocery retailer.”
The private-label agreement comes on the back of a deal announced in May for Keytone to acquire the assets of AusConfec through its wholly-owned subsidiary Omniblend. AusConfec manufactures protein bars and has contracts with Australian retailers Woolworths and Coles.
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By GlobalDataKeytone manufactures products under its namesake dairy brand and also Omniblend, Super Cubes, a health and wellness firm in Sydney, and Tonik, a producer of protein shakes in Australia.
The company’s financial results are issued in Australian dollars, with sales in the fiscal year to 31 March amounting to AUD22.5m (US$16.4m), compared to AUD2.5m the previous year. It started the new year with sales of AUD11.5m in the first quarter and AUD14.4m in the following three months.
