The garage pie is making a comeback – and it’s much bigger
JSE-listed consumer goods company RCL Foods says that its food division delivered a strong financial result, with a record performance in sugar, which benefited from higher demand, strong cost control and improved sales mix.
Staff Writer | Business Tech
RCL said groceries also delivered pleasing growth aided by a good recovery in pies and continued strong performance by the grocery operating unit.
“All business units continued to benefit from increased in-home consumption and associated higher demand for pantry essentials. A focus on internal cost control and progress against key strategic imperatives supported the division’s positive overall result,” it said.
On Monday (6 September), the group, which boasts brands including Pieman’s, Rainbow Chickens, Bobtail, Epol, Nola mayonnaise, Yum Yum peanut butter, reported financial results for the year ended June 2021, showing revenue up 14% to R31.7 billion.
Earnings before depreciation, amortisation and impairment (EBITDA) was up 47.3%, while headline earnings per share advanced 723.7% to 107.9 cents.
The group delivered a total dividend of 45 cents, up from 25 cents in June 2020.
In its interim results, RCL noted that lockdown restrictions hurt its pies operating unit – amid reduced on-the-go consumption. On Monday, the group pointed to ‘steady progress’ in post-lockdown.
RCL said that in the pies operating unit, a key focus has been on regaining volumes lost during the lockdown period when consumers were doing less travelling and making fewer shopping trips.
It said that product extensions and innovations in pies were successfully launched in recent months, most notably its Pieman’s Big Deal Pie, a larger pie-in-a-box concept for the grab-and-go garage forecourt market.
A strong “back to market” recovery plan has seen double-digit growth in the forecourt channel, albeit off a low base, with the newly launched Pieman’s Big Deal pie making a strong impact, RCL said, noting the sale of two million “Big Deal” pies in the first three months of launch.
After a brand extension for a key retail customer, this was the second innovation out of the group’s new pies plant, which was completed in July 2020 as part of the pies recovery and growth strategy, RCL said.
The group said it bakes more than half a million pies each day. However, softer demand in the retail prepared channel remains a challenge which, together with rising raw material costs, is placing pressure on margins.