Intense competition inside supermarkets and the growing popularity of private-label foods has seen pie maker Patties Foods post a 16.5 percent fall in first half profits.
The company, which owns Herbert Adams, Four'n Twenty and Nanna's, made a net profit of $9.1 million in the six months to December, down from $10.8 million in 2011.
Along with increased competition Patties said it had been held back by manufacturing disruptions caused by installing a new packaging system and a $1 million charge on bad debt.
Fairfax Media reports Patties managing director Greg Bourke said the company would aim introduce a new line of frozen desserts to try and win back supermarket customers.
“The area where we are having the most impact on margin is our frozen fruit business,” he said.
“It is growing in the value end – increased value products rather than premium branded products.
“There is a change of mix going towards private label and also to the value range.”
Bourke said while the company was still selling the same amount into supermarkets, consumers had drifted away from premium products toward cheaper foods, which delivered slimmer margins.
He said the company had also seen strong growth in its petrol station and convenience store products, but the gains had not been enough to offset weakness in other parts of the business.