The Byron Bay Cookie Company has been rescued out of administration, purchased by one of the country’s leading pasta makers, but the biscuit industry is still facing pressure from imports and the dramatic increase in private label sales.
The company’s manufacturing arm was placed into administration earlier this year, swamped with a winding-up notice from the Australian Taxation Office. The business also faced $2.7 million in debts to unsecured creditors.
Now, PWC has announced the business is back on its feet. Rinoldi Pasta, one of the country’s oldest manufacturers of pasta products and founded in 1878, purchased the company. The business has been expanding into snack foods and operates in a range of different countries.
The development is a win for Byron Bay Cookie Company, which had just announced expansion plans prior to its collapse.
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A purchase price wasn’t disclosed. Byron Bay Cookie Company turns over about $13 million a year. Rinoldi has purchased 100% of the company, with the previous owners no longer taking an active role.
But this isn’t necessarily a good news story for everyone.
Emily Witham, a senior industry analyst at IBISWorld, told SmartCompany this morning the biscuit industry is facing a huge range of pressures, including higher numbers of imports and private label sales from the major supermarkets.
Over the last five years, annual revenue growth in the biscuit industry has been a miniscule 0.3%. During the same time, imports have grown at an annual compound rate of 9% to now account for 20% of all sales.
“Within that trend we’re also seeing a lot of major players manufacture offshore,” she says. “That’s where a large portion of the imports come from.”
Over the next five years, IBISWorld expects revenue to grow at 2% annually, but Witham makes a sensible warning – biscuit manufacturers looking to contradict consumers’ demand for healthy products need to start innovating.
“Whether it’s working through more convenient packaging, reducing sugar, or so on, these are the areas more likely to see the greatest success.”
This is partly why Witham says she was surprised to see Byron Bay Cookie Company go into administration, but notes manufacturing costs have increased.
“This is why we’re seeing major players moving to outsourcing a lot of their production methods across Asia.