Wessanen has indicated it expects to continue to see the benefits from pricing action it has already taken during the rest of the year.
The Dutch organic food specialist today (25 July) reported that its sales dropped by 2% in the first half of the year.
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However, the company emphasised it did benefit from improved pricing and product mix in the period. Price/mix contributed a 2.6% sales gain, the group revealed.
Speaking after the release of the group’s results, a Wessanen spokesperson indicated the firm is not planning further pricing action in the back half of the year.
“In general price increases to retail happen in the earlier part if the year, so we expect continued benefits from these,” Hoyer told just-food.
However, Wessanen’s price/mix gains in the first half of the year were not enough to offset a 4.6% drop in volumes.
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By GlobalDataThe company attributed the decline to the depressed consumer environment in Europe and the group does not believe that higher prices contributed to falling volumes, the spokesperson said.
“[Our] best guess is that volumes are in general not much impacted by our price increases, but we do feel the impact of low consumer confidence and less spending on our volumes,” he said.
While Wessanen booked a drop in operating profit during the period – which declined from EUR2.9m to EUR2.2m – this was primarily due to higher spending on marketing and the company insisted that it has been able to control input cost pressure.
The spokesperson said: “Up to now, we are able to control our raw material costs, supported by our central sourcing initiatives to streamline our sourcing efforts and consolidate our supplier base.”
Wessanen indicated that it will continue to execute its strategic plan to sharpen its focus as a branded organic food manufacturer in Europe and is “making progress” on its planned divestment of its US drinks arm ABC and European frozen food division.
The group also plans to continue to extend its brand-building efforts. “We [will] continue to invest in brands as we did in H1, although we skewed this partly to H1,” the spokesperson said.
