Snack company Annies' sales in United States soar despite Covid-19 spiralling out of control

08 Jul 2020 9:49 AM | Mike Hearn (Administrator)

Blenheim-based food producer Annies has fronted a million-dollar turnaround in profits over the past year despite disruption from Covid-19.

Annies, which manufactures fruit bars and other snacks, entered two new export markets during the mandatory lockdown and pivoted its business model to deal with fallout from the pandemic.

Sales across the brand are now higher than they were pre-Covid - and are soaring in the United States, where Covid-19 cases are growing by tens of thousands by the day.

Bonnie Slade, sales manager for Annies, and Māori-owned parent company Kono, said sales in the US had accelerated significantly since it partnered with California-based subscription food box company Imperfect Foods in February.

Covid-19 cases in the US have surpassed 3 million and more than 132,000 deaths have been recorded. In some states, including New Jersey, transmission rates have hit a 10-week high.

Annies sales in the US through its undisclosed national retailer initially spiked in the US at the start of the pandemic and during lockdown before drying up. They have since returned to "near-normal" levels.

"What we've seen worldwide, and it happened in New Zealand as well, with the restrictions of numbers allowed into supermarkets, and some people not wanting to go to supermarkets, we saw a big spike at the start ... but that petered off because were at home [baking]," Slade told the Herald.

"On the flip side to that drop in demand, we saw huge demand from our US customer who is online."

Annies sends product to Imperfect Foods under private label. It puts its own branding on and delivers the product along with other commercially unsellable items in a weekly food box.

Slade said Annies was able to pivot and send more product to Imperfect Foods following demand loss from its retail partner quickly as the business experienced a surge in online orders.

Imperfect's business had increased ten-fold through the pandemic and was already a popular growing business prior to the outbreak, she said.

"They are seeing huge demand - they've got distribution centres all over the US - and many people are unwilling to go out so they are getting them online."

Annies sold more than 8.5 million fruit bars over the past 12 months and sent almost 500,000 new products to Imperfect Foods in the past few months.

The US is Annies' fastest-growing market, it is forecasting more than 420 per cent growth in the current financial year.

Annies was founded 33 years ago and acquired by Kono in 2014. Slade said the company had spent the past 12-18 months to re-strategising the business for growth. As part of this Kono and its brands set out seeking partnerships with other organisations.

The brand has been exporting to the United States since 2015 via an undisclosed retail chain and began sending product to Imperfect Foods during lockdown.

It also launched into China during lockdown and began exporting to the Middle East with a private label customer two weeks before lockdown. At the beginning of lockdown at the end of March, it also launched four new products and updated its packaging.

Other markets it exports to include Singapore, Thailand and Taiwan.

Slade said sales in the US despite the ongoing pandemic had exceeded expectations.

Growth in the market had happened faster than the company had forecast, he said.

"We knew Imperfect was going to be a good customer for us, we were not expecting the growth to be as fast as it has."

Annies is now focused on growing its business in Australia and markets closer to New Zealand.

Source: Aimee Shaw, a business reporter focusing on retail, small business, NZ Herald