RFG brews up new plans for coffee
GOLD Coast-based Retail Food Group has restructured its coffee roasting and wholesaling operation as it seeks to perk up its non-franchise revenue streams.
RFG, which has seen its share price plunge following criticism over poor treatment of financially-stressed franchisees, said it has merged four businesses into one under the Di Bella brand.
The businesses are: Di Bella Coffee; Roasting Australia; Di Bella USA, and Evolution Roster.
Currently Di Bella targets the so-called ‘at leisure’ segment through sales to independent cafes and restaurants and franchise systems.
However, the business wants to expand into the ‘at home’ and ‘at work’ segments.
It also wants to target hotel chains, independent groceries, offices, and direct to consumer online sales.
Di Bella CEO Darren Dench said the new business will be able to leverage its scale to make further inroads into the $1.8 billion per year domestic coffee and tea market.
“This consolidation means that Di Bella is now Australia’s second-largest roast and ground-coffee enterprise, purchasing more than 3600 tonnes of coffee annually and supplying more than 3000 cafes and restaurants, and customers within 37 countries,” he said.
“Bringing these together into one large enterprise means we can leverage roasting capabilities among our different plants, as well as ensure that the product and service is more widely available.
“We are primed to grow profitably, and scale globally, thanks to the new sales model that aligns key customer segments, an accelerated growth mindset, and a focus on operating efficiency that will build a self-sustaining global coffee business.”
RFG bought coffee roaster Di Bella, founded by Brisbane coffee entrepreneur Phillip Di Bella, for $30 million in 2015
Retail Food Group, which operates a number of brands including Donut King, Pizza Capers, Brumby’s Bakery and more, is keen to turn attention away from its struggling franchise arm.
The company’s reputation has taken a battering following claims from past and present franchise owners that the company prioritised profits for shareholders over the livelihoods of their franchisees.
New CEO Richard Hinson, the former general manager of Metcash supermarkets, was installed in January after the resignation of Andre Nell.
He has since embarked on a charm offensive, vowing to listen to franchisees and provide better support in a tough retail environment.
The company has had several pieces of good news recently.
Earlier this month Bannister Law announced it was dropping a class action that it was seeking to bring on behalf of former franchisees.
That followed news that RFG’s lenders had agreed to waive testing of the company’s financial covenants under its debt facilities for the past financial year.
The company has flagged a net loss of $87.6 million for the past financial year.