Sydney, Feb 21, 2006 AEST (ABN Newswire) - Successive droughts and frosts in Europe and a closer price differential have set the scene for an Australian extra virgin olive oil marketer, Piquant Blue Limited, to smash through into the lucrative and massive United States market for olive oil.
ASX-listed Piquant Blue (ASX: PQB) announced today it expected first major exports to large US supermarkets by mid-year, supplementing surging sales in the Australian market.
Piquant - which packages and distributes the high volume redislandTM brand and the gourmet line, njoiTM - said today it was in advanced negotiations with several large supermarket chains in the United States to sell redislandTM.
"We expect to ship by June to the first such US supermarket chains, which are substantial retailers, some with sales in excess of US$10 billion per annum," Piquant Blue's Managing Director, Mr Andrew Konowalous, said today.
"Collectively, this first group of chains is larger than the entire Australian supermarket sector," Mr Konowalous said.
"The market conditions in the US have become highly favourable for redislandTM as retail prices for olive oil in the US for its traditional imports, the European brands, have increased up to 40% in the past six months due to poor harvests in Europe," he said.
"This has positioned redislandTM, now one of Australia's top selling brands, on a price parity with leading premium Italian brands, particularly with retail price tags of around US$8-9 per 500mL bottle.
"As there is no substantial local olive oil production industry in the US, the Americans are completely reliant on imports. This situation is likely to stay the same in the future.
"The recent Free Trade Agreement between Australia and the US has removed all tariffs on Australian olive oil and there is no anti-competitive "Buy American" campaign for redislandTM to encounter as it expands into this massive potential marketplace."
Mr Konowalous said Piquant Blue acknowledged that it would take some time to achieve the ultimate goal of country-wide distribution in the US but at this stage of the Company's development, the targeted markets in the US exceeded the value of the entire Australian market.
"This will create a solid and profitable base for expansion," he said.
In a letter to shareholders, copies of which were made public today, Piquant Blue said sales for the six months to 31 December, 2005, had totalled $1.6 million with a 51% increase in sales from the first to second quarters.
Second half domestic sales for 2005-2006 had commenced strongly with sales last month virtually equal to those of December, despite January usually being seasonally the weakest retail month.
"Our current monthly sales annualize to around $5 million and this doesn't take into account our mainstream export potential or the positive contribution from new product launches into Australia's major supermarket chains," Mr Konowalous said.
"The domestic sales momentum for redislandTM over the past 7 months has been so strong that we believe Piquant Blue will not have to rely on export sales success for profitability."
Mr Konowalous said Piquant Blue expected to achieve a profitable trading position during 2006 and was considering the establishment in Melbourne of the Company's second bottling plant - in addition to its primary plant in Perth - to assist eastern states sales and export access.
redislandTM is now represented in approximately 1,400 major Australian supermarkets and several hundred independent supermarkets, through Metcash. njoiTM , the Company's gourmet brand, is represented in more than 100 Australian gourmet food outlets.
"Piquant Blue now has significant growth prospects in its key markets domestically and overseas - an achievement well timed as Australian groves are just starting to produce significant volumes and marketing solutions are required," Mr Konowalous said.
"European producers have been successful in driving up demand for olive oil but with climatic conditions impacting their production and export markets, Piquant Blue has come to the market with a superior quality product at competitive prices.
"We believe the increased market presence through Coles, and the introduction of additional products and improving margins through economies of scale, will deliver both revenue and earnings growth to Piquant Blue during 2006."
Key shareholders include Timbercorp, one of Australia's largest agribusiness companies which developed the country's largest olive grove with close to one million trees. It is a key supplier of premium olive oil to Piquant Blue. Micro-cap specialist investment management company, Acorn Capital Limited, is also a lead shareholder.
Contact
Andrew Konowalous
Piquant Blue Limited
T: (61-8) 9388 8926 / M: 0417 990 334
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
| ||
|
