Increased purchases of honey by more health-conscious consumers has boosted demand in Australia by nearly four per cent over the last financial year, says producer Capilano.
That has helped Capilano Honey lift net profit nine per cent to $10.3 million for 2016/17 as the company increases its supplier base and focuses on producing more premium products - such as Manuka honey and floral varieties from Western Australia.
Managing director Ben McKee says increased demand - 3.9 per cent growth, in volume terms, in the grocery channel over the last financial year - reflects the greater consumer interest in natural, healthy foods.
"It is pleasing to see that growth in the honey category is being driven by an increase in purchase frequency," Mr McKee said in Capilano's 2017 review of operations.
He said recent rainfall in production areas had boosted winter honey supplies and the company was optimistic about increased production in the coming season.
At the close of the 2017 financial year, Capilano's honey stocks had lifted to 5,953 tonnes, from 4,960 tonnes a year earlier.
"The improving honey supply base and inventory holdings facilitates the opportunity to deliver growth in key markets," Mr McKee said.
He said international bulk honey markets had been relatively stable after prices softened last year, but Capilano had stopped supplying some industrial sectors because of insufficient margins.
With Australian honey now an expensive commodity compared to honey from other countries, Capilano is focusing on developing widespread distribution of premium retail products.
Shares in Capilano were two cents lower at $16.48 at 1353 AEST.
CAPILANO HONEY FY PROFIT UP 9PCT
* Annual net profit up 9pct to $10.3m
* Revenue down 0.4pct to $133.1m
* Final dividend of 40 cents, fully franked, unchanged
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