Lotus Bakeries has reported a strong recovery in its Natural Foods division, with healthy snack brands Nakd, Trek and Bear bouncing back from Covid-driven sales falls last year.
The Belgian food group today posted headline group growth of 13.1% to €750.3m as its core Biscoff and Natural Foods division both delivered double-digit growth.
Lotus Biscoff grew 15% year on year as it benefited from the reopening of the hospitality sector in the first half of 2021, the partial recovery of air traffic and the brand’s international expansion.
Its natural snacking division saw revenues of €140m and 25% growth in the second half of the year after a lockdown-induced sales slump last year.
Negative growth was again recorded in the first two months of 2021, but growth was achieved month by month from March onwards.
All brands “grew strongly”, with the international sales of the division rising by 40% to now represent 26% of its sales with the balance in the UK.
“The strong recovery after the Covid-19 pandemic reinforces Lotus Bakeries’ conviction in the strategy adopted for Lotus Natural Foods,” it stated.
“A strategy based on further expansion of market-leading brands and focus on innovations in the UK on the one hand and accelerated international growth on the other.”
The group achieved recurrent operating profit of €123.8m, up 11.4% year on year, as the turnover and volume growth boosted the bottom line.
It made a non-recurrent operating loss of €4.1m, compared with a €4.6m loss last year, due to one-off costs related to the restructuring of its UK-based Natural Foods division, which saw the merger of two offices and startup costs in the US.
“At the end of 2021 we are able to present another very good report,” said CEO Jan Boone.
“The enormous growth of Lotus Natural Foods has even exceeded my expectations, particularly the continued growth in the second half of the year. This has further reinforced my conviction that there is still plenty of potential for the Lotus Natural Foods brands.
“For Lotus Biscoff, this means first and foremost making sure that the capacity expansions are delivered in 2022 and that opportunities for further longer-term expansion are identified.”
However, the group warned it had seen “cost inflation not seen for a long time” in the second half of 2021, which would continue into 2022.
It said it had announced price increases across its product range in recent months and would implement “fair but adequate” increases this year to offset cost inflation.
Boone added: “2022 looks set to be challenging. As a manufacturer, we’re faced with unprecedented increases in costs and at the same time we want to continue to offer consumers their favourite cookies or healthy snacks at an affordable price. For this reason, we aim for a fair price increase for our products.
“In the end, this is crucial if we are to meet our targets for margins and – above all – continue to invest in the growth of our brands.
“The consistent implementation of these necessary price increases may lead to disruption with certain customers in the short term but this is the only way to ensure that our business continues to grow and remains successful in the long term.”
Lotus Bakeries built its UK-based Natural Foods arm through a series of acquisitions, buying a majority stake in Nakd healthy cereal bars maker Natural Balance Foods in August 2015, Bear snacks producer Urban Fresh Foods in December 2015 and infant snack and feeding brand Kiddylicous in July 2018.