The latest developments at Premium Brands Holdings, a North America-focused food business, have the potential to contribute C$100m ($73.2m) to sales in Asia. The company has secured new supply deals in the region. President and CEO George Paleologou announced that the company has gained new listings in Asia and sees tremendous potential for growth in that market specifically in Japan, South Korea, and China. Paleologou estimates the opportunity in Asia to be around $100m in the shorter term.
The company has a diversified portfolio ranging from bread to pastries, meat, sushi, and seafood, and they reported a 1.3% increase in group revenue in the third quarter to C$1.64bn. Specialty Foods, the largest business division, generated C$1.06bn in sales, up 4.9% in the period ending 30 September, while the distribution and wholesale business posted C$586.9m. However, it experienced a decline of 4.6% due to a “challenging lobster market.
In addition to the expansion in Asia, Premium Brands has struck a seafood deal for Menu-Mer in Quebec through its Premium Food Distribution (PDF) business unit. CFO William Kalutycz suggested that Menu-Mer generates about C$28m in annual sales.
CEO Paleologou emphasized the company’s focus on organic growth, with five capital expenditure projects lined up, three of which are expected to be operational in the fourth quarter. This is expected to lead to a significant acceleration in the organic growth rate in the coming quarters, with particular focus on premium frozen sandwiches, cooked protein, meat snacks, and artisan baked goods.
The company has overcome various challenges and continues to explore potential acquisition opportunities, cautiously considering factors such as synergies and growth opportunities. CFO Kalutycz explained that the company is involved in friendly discussions with potential partners and may use its shares as a currency for acquisitions, if it makes sense from an IRR perspective. Premium Brands aims to make strategic acquisitions that align with their growth initiatives and market opportunities.
