Dutch organic food specialist Wessanen has seen its second-quarter profits slide as a result of lower sales volumes and higher marketing spend.
The company today (25 July) booked net profits of EUR3.1m (US$3.8m) in the quarter, down from EUR5.4m last year. Operating profit declined to EUR2.2m, down from EUR2.9m in the comparable period pf last year.
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Wessanen said profitability was impacted by marketing investments, which increased year-on-year as the group looked to execute its brand-building strategy.
Nevertheless, in spite of higher investment levels, the food maker said sales were depressed by the weak consumer sentiment in Europe as consumers traded down to cheaper products and own label. Sales dropped 2% in the period, with a 2.6% improvement in price/mix failing to offset a 4.6% volume decline.
The group said it continues to make progress on its strategy to become a more focused player in the European branded organic sector. It said that it has received a “good level” of interest in its ABC drinks unit and the company took full ownership of its Favory frozen convenience business as it prepares to sell off its frozen food interests.
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By GlobalData
