US nut group John B. Sanfilippo & Son has said that it is pulling back on plans to grow sales of branded consumer snacks in export markets such as China after export sales failed to meet expectations.
Jeffrey Sanfilippo, the company’s CEO, said: “Over the previous three fiscal years, we have made various investments to grow the sales of consumer products in our export channel, especially in China. The result of these investments has not met our expectations due to the highly competitive environment in the markets that we targeted. During the current third quarter, our executive team reviewed this export growth strategy and concluded that we should discontinue our efforts to sell branded consumer products into China and certain other international markets.
“As a result of this decision, we will be consolidating our bulk export business into our commercial ingredients channel and the remaining portion of our export consumer products business into our consumer channel. Beginning in the first quarter of fiscal 2017, we will no longer report export sales separately in our distribution channel table in our quarterly and annual reports. In the upcoming fourth quarter, we intend to review and consider alternatives to replace our export growth strategy,” Mr. Sanfilippo concluded.
The announcement came on the back of the firm’s nine-month results where the firm posted increased sales and profits.
Net profit for the nine months ending 24 March rose to US$23.1m from $20.8m a year earlier. Operating income grew to $39.9m from $38.2m year-on-year.
Sales at the Fisher Nuts maker increased to $720.5m from $665.8m resulting from an increase in sales volumes. Volume contributed 6% to growth but lower pricing trimmed 3% off the top line.