Bellamy’s Organic in plum spot to list as $95 million public company this month

Investors are lining up to take a bite of Tasmanian organic baby food maker Bellamy’s Organic, which will list on the Australian Stock Exchange later this month.

According to Fairfax, the wholesaler will initially offer 25 million shares at a price of $1, taking the total number of shares in the company to 2.2 billion and giving the company a market capitalisation of $95 million.

Fairfax also reports the IPO will include the sale of more than 10 million existing shares, which has reportedly allowed former Rich Lister Jan Cameron to sell down her 55% stake in the business.

However, there is speculation Cameron, whose Retail Adventures group plunged into administration for the third time last week, might seek to reinvest in the food company.

Bellamy’s Organic was founded as a family business in Launceston in 2004, before being purchased by investor group Tasmania Pure Foods in 2007. The company produces around 30 products which are 100% Australian-made and certified organic.

The company reportedly has a 12% share of the local Australian baby food market, with distribution agreements with supermarket giants Coles and Woolworths, as well as Chemist Warehouse, Costco and Big W. According to BRW, its revenue was expected to reach $50 million in the 2013-14 financial year.

Bellamy’s Organics generates approximately 15% of revenues from international markets, including New Zealand, China, Singapore, Hong Kong, Malaysia and Vietnam, with chairman Rob Woolley telling Fairfax this week “China is a very promising market for Bellamy’s”.

“It has been well-documented that the nation’s palate is changing rapidly with a taste for dairy mainstreaming very quickly,” said Woolley.

“Another trend that has been less discussed is the increasing interest in certified organic food.”

Brooke Tonkin, senior industry analyst at IBISWorld, told SmartCompany Bellamy’s Organic is one of the leading producers in Australia’s rapidly growing organic food market.

Tonkin says there are two aspects to the growth in organic food consumption in Australia: spending on healthy snack foods, which has grown by 7.3% over the past five years, and organic farming, which has grown by 12% per year in the same time period.

The growth is being driven by domestic and international demand, says Tonkin.

“Domestic consumers have rising disposable incomes and they are becoming more health conscious, more aware of the foods they are eating,” says Tonkin. “So they are willing to spend more on healthy foods to look after themselves.”

“Incomes are also rising overseas and many countries have concerns about the safety of food production,” says Tonkin of rising international demand for Australian produced organic foods.

“Australia has a strong reputation as an exporter of quality and safe foods, and these consumers are willing to pay more for organic produce,” she says.

While Tonkin says it is difficult to quantify the exact market share of the organic food producers in Australia, she says companies such as Jalna Dairy Foods and the Woolworths-owned Macro Wholefoods join Bellamy’s as the market leaders.

Tonkin says the healthy snack food market is projected to grow by 4.6% to $734.9 million by 2018-19, while the organic farming industry is expected to grow by 8.4% to 833.5 million in the same period.