THE second half of Oceana’s 2013 financial year was not the time for the company to thank its Luck Star(s.) Oceana’s Lucky Star canned pilchard brand is one of the most affordable sources of protein.
The brand enjoys a quite astounding 3 million servings per day in Africa, and holds a market share that is edging close to 70%.
After a solid start to the 2013 financial year Lucky Star saw its fortunes dimming in the second six months to end September, when destocking at major customers and general reduction in protein consumption by consumers hit sales.
Oceana pointed out that year-on-year pilchard volume declined 1,2% after Lucky Star initially showed growth of 16% in the first half. Lucky Star sold 8,6m cartons in 2013 – down on the 8,7m sold in 2012, but still well ahead of the 7,3m cartons moved in 2011.
Lucky Start traditionally generates between 52% and 56% of its annual sales number in the second half of the financial year. This time, though, only 44% of Lucky Star sales were registered in the second half. This is a pity because Oceana reported improved pilchard catch levels and production yields in 2013.
Oceana owns 13,508 tons of SA pilchard quota with another 16,215 tons contracted from outside fishing parties. In Namibia 7,975 tons is owned by Oceana and 4,149 tons is contracted in.
Oceana faces a tough first half in financial 2014 in terms of shifting inventory as it finished the 2013 financial year with an increase of 82% in cartons held.
Oceana CEO Francois Kuttel explained that long lead times in the pilchard supply chain impacted the ability for the company to reduce stock levels in the short term. He added that domestic growth in the pilchard market would remain under pressure due to the prevailing economic environment.
Kuttel also indicated there were plans for a price increase in Lucky Star in 2014. “It remains to be seen whether market can absorb this…”
In the interim Oceana expects to push Lucky Star deeper into African markets – most notably Nigeria, Mozambique, Zimbabwe. If Oceana can replicate the success it has with horse mackerel in African markets, then Lucky Star might shine again in the medium term.
By Jenni McCann