Major South African food producer hikes prices

Food producer AVI implemented price increases in its 2025 financial year to offset lower sales volumes amid South Africa’s challenging consumer environment.

AVI owns several well-known South African brands, including Five Roses, Freshpak, House of Coffees, Bakers, Willards, ProVita, Yardley, Frisco, and Green Cross.

The company released a trading statement for the year through June 2025 on Friday, 25 July 2025.

This update showed AVI’s profit margins come under pressure due to a challenging consumer environment with anaemic demand in many of the company’s key categories.

In addition, AVI recorded a strong performance for its 2024 financial year, which provided a high comparative base for its 2025 results.

Despite these pressures. AVI’s revenue increased by 1% to R16.02 billion, while operating profit grew by 7.8%. The group’s operating profit margin was 6.7% higher than the prior year.

AVI’s earnings per share for the period are expected to increase by between 6% and 8% compared to 2024.

The company explained that this growth was underpinned by selling price increases that were implemented to offset lower sales volumes. This also enabled the company’s gross profit growth to exceed revenue growth.

In the company’s interim results released earlier in 2025, it warned of these price increases, saying that if South Africa’s economic situation does not improve, it may need to hike its prices to keep up with rising costs.

AVI kept a close eye on costs in 2025, but recorded increased investment in marketing activity to support its brands and once-off costs of R42 million associated with restructuring initiatives.

However, the company’s net finance costs were higher than in 2024 due to increased average borrowing levels following the payment of the special dividend in October 2024, though this was partially offset by lower interest rates. 

Positively, AVI’s capital gains increased after the disposal of the assets and business of I&J’s Unsobomvu joint venture. This transaction led to a capital gain of R12.6 million after tax.

AVI is expected to release its full results for the 2025 financial year on or about 8 September 2025.