Food product manufacturer Strauss Group has released the results from its second quarter for 2021, stating that innovation, combined with the lifting of restrictions and returning business activities have contributed to the growth seen in the company’s revenues.
Strauss reports an increase in revenue of about 10 per cent in the second quarter, amounting to approximately US$65.8 billion.
According to Strauss, sales growth was seen across all operating segments and was most evident in the branches of Strauss Coffee, Strauss Israel, and Strauss Water. Sabra in the United States also recorded revenue growth.
“We are wrapping up a solid quarter and half year with significant sales growth, reflected across all regions in which the Group is active, and stability in most of our market shares,” says Giora Bardea, CEO and President of Strauss.
The company’s gross profit in the second quarter was approximately US$245 million, a 6.9 per cent growth compared to same period in 2020.
Gross margin was at 37.3 per cent, as compared to the 38.4 per cent last year. This drop in gross margin, says Strauss, is the result of an increase in raw material prices and international shipping costs.
Operating profit in the quarter was about US$65 million, a 10 per cent margin compared to 11.5 per cent in the same period of 2020.
Strauss says this drop in operating margin is mainly due to a related drop in gross margins, and in nonrecurring events, such as the one-time Chinese grant that was received in 2020. Marketing and General and Administrative expenses were also lower in 2020 due to the pandemic.
Strauss Israel’s operating margin, however, improved in the first half of 2021, with the branch’s net profit reaching approximately US$99 million and showing an overall increase of 8.7 per cent.
“The lifting of restrictions and the gradual return to life alongside COVID-19 have enabled the [Strauss] Group to resume regular operations in segments where business was considerably slowed in the corresponding periods last year,” says Bardea.
“That said, looking ahead it seems likely that some of the limitations will be reinstated in the third and fourth quarters due to the global spread of the delta variant, and we will simply have to learn to live and work alongside COVID.”
Strauss says it understands that business activities will have to continue alongside the coronavirus for the foreseeable future, saying this resultant uncertainty will serve as a catalyst for continued expansion and growth.
According to Strauss, the coffee company has grown in all geographies including in Brazil, Israel, and Eastern Europe with the capsule category being a strong driver of growth, particularly in Israel and Brazil.
In the second quarter, Strauss Coffee’s sales reached US$262 million in total, showing a 13 per cent growth compared to 2020. Strauss says this is thanks to the sales growth found in Israel markets that came from reopening the Elite Café chain business, and its sales to the institutional market.
This included countries such as Serbia, Romania, Russia and Ukraine where both the quantity of products and sales price showed growth.
The company’s Growth and Innovation Arm and FoodTech branches have also been driving company expansion, having just announced a US$105 million round of funding from cultivated meat manufacturer, Aleph Farms. This will be recorded in the third fiscal quarter.
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