Australian food and beverage icon SPC is on the road to recovery after years in the financial doldrums, but it’s powder rather than peaches driving its comeback.
Functional milk powder – powdered milk with added vitamins and other nutritional supplements – was now its core product for markets in Asia, SPC Global chief financial officer Brant Clutterbuck said.
“That’s the baseline business throughout Asia at the moment,” he told AAP.
SPC Global’s foray into powdered milk follows its 2024 merger with Nature One, along with The Original Juice Co and Natural Ingredients, after years of supply constraints, cost pressures, debt issues and a tanking share price.
The combined entity sells in 15 markets, mostly in Asia, and has strong footholds in Singapore, Hong Kong, Vietnam, Indonesia and Malaysia, while seeing signs of growth in China.
Functional milk powder is now a springboard to launching SPC’s other products into those markets.
“Because of the merger, we’re seeing the ability now to cross-sell the broader portfolio,” Mr Clutterbuck said.
“We are far more resilient and diversified now than what we were 18 months ago, and that’s why we’re seeing some significant contributions coming out of the international part of the business.”
Aussie products also attract a high price-tag offshore.
“The Australian-made, Australian premium has really got some traction over in those (Asian) markets,” Mr Clutterbuck said.
The company is also looking to expand sales into the Middle East after signing a memorandum of understanding with the Shahin family office to potentially distribute in markets including the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman.
On the home front, SPC has pivoted away from low-margin, low-contribution arrangements such as co-pack and private label deals, towards higher-margin products and brands.
“That has contributed to our overall net sales revenue decline year on year,” Mr Clutterbuck said.
“But, most importantly, what we’ve seen is that strategy has allowed us to improve our gross margin profitability.”
The group’s operating income jumped by $8.2 million to $38.5 million, despite total sales falling almost 12 per cent to $331.8 million.
Despite improving earnings, SPC has a long way to go before it’s back in the black after delivering a $11.6 million net loss in the 2026 financial year, while holding a net debt position of $85.8 million.
Shifting from a supply-led to a demand-led strategy has also helped streamline the business.
“The facility would procure what the growers grew and turn it into finished goods, and then we would go to the market and seek to sell that,” Mr Clutterbuck said.
The company, which has a stock market value of $87 million, instead now looks to demand to help inform its raw material purchases.
Shares in SPC were trading around 7.4 cents on Tuesday.
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