RFG BENEFITS FROM A ROASTING

EIGHT months after snaring the Gloria Jean's Coffees business, Retail Food Group (ASX:RFG) has stepped up the pace of offshore expansion driven by what it says is a growing coffee culture in the developing world.

RFG says it has opened 16 new Gloria Jean's Coffees outlets outside of Australia over the past two months, aided by a reorganisation and expansion of operations which included the establishment of a dedicated international division.

RFG's CEO of franchise Andre Nell says the openings reflect growing interest in coffee in developing countries.

"Australia's coffee market is reasonably mature, with coffee consumers quite sophisticated and the café sector highly competitive," says Nell.

"In regions like Asia, espresso coffee culture is growing rapidly in popularity as consumers adjust their palates, acquire new tastes and learn more about the processes, flavours and blends available through espresso-style coffee.

"Coffee consumption trends are actually quite varied across different countries. For example, customers in China drink coffee well into the night rather than the morning-focused trade we see here in Australia."

Nell says this is just the beginning and more Gloria Jean's stores are in the pipeline with RFG's eyes set on high growth regions including China, Malaysia and Turkey.

"Turkey recently surpassed 40 outlets, opening six new stores in the past two months, and RFG's joint-venture partner in China is forecasting a minimum of 25 new store openings in the next 12 months," says Nell.

"RFG's traditional brands are also gearing up for expansion with increased interest from international partners since the establishment of a dedicated internal international division."

The international division aims to realise significant international growth opportunities arising from strategic acquisitions and along with Gloria Jean's, includes the expansion of Di Bella Coffee domestically and in international markets.

RFG currently operates coffee roasting facilities in Australia, New Zealand and the US, and blends around 5.9 million kilograms of coffee each year.