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In August, Hyundai Australia announced it would be giving its 2020 advertising budget to three small businesses who needed it more. Artisan cheesemaker Coolamon Cheese Co is the first company to receive the generous offer.

Hailing from the NSW town of Coolamon, this year has thrown a number of difficult obstacles at the small business, forcing them to close their main public-facing venue. “After clearing many hurdles since opening the business, 2020 will be remembered as the year revenues dropped through the floor,” general manager Keiran Spencer told Business Insider Australia.

“Our cheesemaking, cheese tasting and cheese tour revenues were lost. Many of our wholesale customers also running cafes/restaurants were gone – and of course, even revenues from farmer’s markets and food festivals were gone.”

While the business wasn’t directly subjected to 2020’s Black Summer bushfires, it did see a huge reduction in the number of travellers passing through the region, affecting sales. On top of that, successive seasons of drought reduced cafe and restaurant trade from a local perspective.

“Then came the pandemic and we have struggled on thinking it might be the death-knell for us,” Spencer said. “COVID-19 has had an undeniable impact on our business as it has with other businesses, including the businesses that buy from us. It is by far the biggest impact on trade in all departments. Retail and wholesale sales were down by up to 92% during COVID restrictions. Many of our wholesale customers had to close their doors during those restrictions. This had a flow-on effect to our wholesale revenue.”

“Making the decision to outsource our café/restaurant and having to let go of our 15 staff members, many of whom were locals, was not an easy decision. A number of them had been with us for a number of years since opening — it was gut-wrenching.”

Coolamon Cheese Co was established in 2015 with qualified microbiologist Barry Lillywhite, the business’s founding cheesemaker and Coolamon resident. With decades of cheesemaking experience under his belt, Barry was keen to start an artisan cheese business of his own. Thanks to the help of Junee Licorice and Chocolate Factory founder Neil Druce, the pair devised an agritourism venture that included the making of artisan cheese, cheese factory tours, cheesemaking classes, a retail outlet and a café/restaurant all within the same facility.

With a grant from the Murray Darling Basin Regional Economical Diversification Program and help from the Coolamon Shire Council, they were able to bring their dream to life in a heritage building on the main street of the NSW town.

“The local community got strongly behind Barry & Neil, not only in offering practical help during the construction of the cheesemaking facility and the re-fit of the interior of the building for the café/restaurant, but also by the fact that a core of the local community agreed to become investors in the business,” Spencer said.

“Barry is now happily retired but not before handing over the reins to Jennifer Nestor — an experienced artisan cheesemaker from Victoria who was delighted to move to the Riverina and step into Barry’s large, ‘food complying’ gumboots. Jennifer has since gone above and beyond expectations in challenging cheese frontiers.”

Winning Hyundai’s Take A Load Off competition — a $52,000 bespoke advertising package taken from Hyundai’s own advertising budget — has given Coolamon Cheese access to services they “could only dream of before”. Not only that, it’s given the business a chance to bring its lactose-free range to the market, a secret weapon that truly separates Coolamon apart from the competition.

“We identified a niche market that wasn’t being serviced in Australia,” Spencer said. “The lactose-free milk market has seen significant growth over the past five to six years, though this has not translated into dairy cheese products that are lactose-free, and definitely not hand-crafted cheese.”

“Research showed us that investment was needed because of the significant rise in lactose sensitivity and intolerance in the community. We knew if we could make this cheese then the product would be the only artisan/lactose-free/dairy-based cheese in Australia — with few examples in the rest of the world either.”

After complex experimentation and taste trials, they pulled off a result so similar to the real thing, Coolamon was awarded a bronze medal at the World Cheese Awards in Bergamo Italy in 2019 for its lactose-free brie. What makes that feat even more impressive is that the judges had no idea they were tasting lactose-free cheese.

“We decided to submit our lactose-free Brie in the traditional Brie category,” Spencer said. “In other words, without letting on that the cheese was actually a lactose-free variant of our Brie. So you can imagine how elated we were to be awarded a bronze medal in an international Cheese Award — a competition category open to French, Italian and other cheesemakers from other countries who are famous for their artisan cheeses.”

Launching this product into the marketplace by the end of the year is Coolamon Cheese’s biggest goal but admits the business will be forced to do more with fewer resources for a little while. “We have in our sights a goal to significantly increase our brand-awareness too, as well as our reputation as a premium artisan cheesemaker,” Spencer said.

“We feel that the Take A Load Off competition will be the launchpad to a greater goal — that of making ourselves the number one hand-crafted, dairy-based, lactose-free cheese brand in Australia. Of course, part of that will be to expand our ranges in all products, including the Coolamon Cheese Co lactose-free range.”

“Instead of seeing our business on the slippery slide, we can now look forward to staying in business and achieving all of that. So we say a tremendous thank you Hyundai.”

Coolamon Cheese Co make a range of artisan cheeses by hand, from the lactose-free double brie to soft and hard blue cheese and a unique collection of native ingredient cheeses. You can support the company and see its full range of products right here.

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In January 2020, the Aussie-based, Mexican cuisine restaurant chain opened its first store in the US, right in Chicago, Illinois. Having already established international stores in Singapore and Japan, the company has now extended its reach to the US, where founder and CEO Steven Marks is originally from.

GYG moved a team of around 40 people over to the US for its new store, which is complete with a double lane drive-through.

“We opened up and it was a huge success,” Marks told Business Insider Australia. “Obviously COVID hit hard, especially in the suburbs of Illinois, and without our double lane drive-through I think we’d be in a lot of trouble.”

GYG is also planning to open more stores in the US. Marks said they will be around 10 – 15 minutes away from initial store in Illinois to attract customers, adding “we like to build and cluster”.

“The opportunity in the US is massive,” he said. “And we’re hoping to sign two more leases by the end of December this year. So we’re growing.”

The year 2020 marks the one year anniversary of GYG’s ‘clean menu’. It also holds whispers of the company’s potential listing.

According the Australian Financial Review, documents filed with regulator ASIC indicated GYG switched from a proprietary company to an unlisted public company, which could be a sign of a looming IPO.

When asked about a possible listing, Marks was coy.

“It was a dream of mine since I was very young to bring a company public,” he said, despite business facing more scrutiny when they do so.

“I love GYG and I love our guests and I love the people that work at all our sectors throughout GYG. To give them the opportunity to own a share of GYG – that’s pretty amazing. And that’s a very special feeling as a founder and as someone who’s very entrepreneurial.”

He added that “if it happens or when it happens” that would be “awesome” but his team’s job is to continually open and run restaurants.

But, should the company go public, Marks confirmed that will happen in Australia. That’s compared to Australian tech giant Atlassian which listed on the US NASDAQ.

“No, we’d keep it at home,” Marks said. “We’re an Australian company – it would be an Australian listing.”

More stores in Australia

Around four months ago, GYG opened what it calls La Cucina (which means The Kitchen) around the corner from its office in Sydney. This houses kitchens where GYG tests and creates its products.

“We spend so much time there playing with food and tasting food,” Marks explained. “Because one thing you know when you when you want to open up restaurants, you have to have a discipline of what you keep on the menu or what you take off. So we’re very careful because the worst thing to do is just continually to add stuff and then increase complexity of operations. That means execuxtion starts to fall.

“So I have a very good discipline of what we put on the menu and what we take off.”

He added that GYG has “got some truly exciting things coming through the pipeline.”

One of the company’s goals is to ramp up the breakfast, lunch and dinner served through its drive-throughs. And while Marks isn’t a fan of plant-based meat, GYG is set to release a product that is made of vegetables.

GYG has six more stores planned for Australia by the end of the year and one more in January. There are even more on the way in the next year and a half.

“GYG throughout the last five to six years has evolved and evolved,” Marks said. “Right now we’ve close to 40 drive-throughs in Australia and we have a pipeline of probably another 40 that’ll open up in 18 months.”

Woolworths Group rode its strong FY20 trading into the beginning of FY21, delivering first quarter sales results 12.3 per cent up at $17.9 billion, and online sales growth of 86.7 per cent at $1.5 billion.

And with Christmas only 50 days away the group is anticipating a “very different” holiday season, but aims to deliver the opportunity for customers to enjoy the spirit of the holiday in a Covidsafe way.

“It has been a pleasing start to FY21, with all retail businesses delivering strong sales growth and customer metrics remaining solid,” said Woolworths Group CEO Brad Banducci.

“Covid costs remain material as we continue to prioritise the safety of our customers and team but have moderated as we become more efficient at operating Covidsafe.”

The cost of running Covidsafe businesses has decreased over time for Woolies, now only making up 1 per cent on sales, compared to 2 per cent in Q420.

And, while back payments to underpaid staff members are still ongoing, Woolies expects to have finished the majority of payments by the end of the first half. The remainder, which will be made to Dan Murphy’s and BWS team members, will be finalised in the new calendar year.

Australian supermarkets

In Australia, the business’ supermarkets saw sales in-store grow 9.2 per cent on the same time last year to $10.6 billion, while online sales doubled to $961 million.

However, the group’s Metro stores saw a decline of 5.1 per cent to $235 million as CBD foot traffic continues to be lighter than average.

“Freestanding and neighborhood stores continue to outperform with sales growth in major shopping malls and city locations still impacted by customer preferences to shop locally,” the business said.

“Sales continued to benefit from Covid-driven higher in-home consumption as well as the success of Disney+ Ooshies. Sales growth in Victoria was approximately 20 per cent in the quarter due to the more stringent restrictions in place.”

New Zealand supermarkets

Woolies’ New Zealand counterpart Countdown saw sales grow 6.9 per cent during the quarter to NZ$1.8 billion, while online sales rose 50.5 per cent to NZ$224 million.

Sales growth was primarily driven by items-per-basket growth, and the quarter saw a third dedicated e-commerce fulfilment center in Wellington and introduced in-app online shopping – helping push online grocery sales.

A “short-lived sales increase” occurred in August when a number of new Covid-19 cases were reported in New Zealand, likely as panicked Kiwis stocked up for a potential second wave, but growth quickly returned to normal.

As New Zealand was in lockdown for a portion of the quarter, no new stores were opened.

Big W

Discount department store Big W saw substantial growth during the quarter, driven by bigger basket sizes of leisure and toy purchases, with sales up 20.4 per cent to $1.1 billion.

Online sales were up 175 per cent to $104 million, due to the fact stores in Melbourne were transitioned to fulfil home deliveries and pick up services, as well as the launch of Big WX – a team within Big W that will focus on online, and collaborate with Woolies X, Countdown X and Endeavor X.

Endeavour Drinks

Woolies’ liquor arm Endeavour Drinks also saw strong growth of 21.4 per cent to $2.6 billion, and online growth of 57.6 per cent to $227 million.

Spirits was the fastest growing category in Dan Murphy’s and BWS, particularly gin, while wine and beer sales remained strong.

Hotels

However, the group’s Hotels division didn’t fair as well as the rest of the group, suffering a fall in sales of 33.2 per cent to $313 million, largely due to Covid-19 restrictions putting a stop to the majority of travel plans.

Lion has appointed Anubha Sahasrabuddhe as its new consumer & brand director, recruiting her from US FMCG giant Mars. 

In her new role, Sahasrabuddhe will oversee marketing for Australia and lead the company’s Consumer Global Centre of Excellence across Australia, New Zealand, the US and UK. The appointment will take effect from early next year.

“Born and raised just outside of Sydney, Sahasrabuddhe will return to Australia after a truly global career that saw her live in eight cities over the past 17 years,” said James Brindley, MD at Lion Australia. “This world-wide perspective will be invaluable to Lion as the company focuses on the rebound of the adult beverages sector next year following the heavy impact of Covid-19 restrictions during this year.”

Sahasrabuddhe is currently global VP of Chocolate at Mars and has had a number of senior positions including global VP, Wrigley in the US and China.

Prior to Mars and Wrigley, Sahasrabuddhe worked with Coca-Cola in New Zealand, Hong Kong, China and the Philippines.

“I feel privileged to have been chosen to lead the consumer thinking for Lion and oversee its portfolio of household name brands,” said Sahasrabuddhe.

“I look forward to taking these brands into the future, whilst also bringing Lion’s innovation and NPD strategy to life to meet consumer demand for new adult beverages in new growth markets.”

The company also updated the market on the underpayment of 6000 of its employees by as much as $300 million. The company said it paid out $164 million in the quarter for payment shortfalls. These remediation payments to staff now total $281 million.

The company hopes to clear up underpayments in its supermarkets business by the first quarter of next year.

Woolworths shares were down slightly to $38.48 on Wednesday afternoon.

The company was on the hunt for $56 million via a placement of new shares.

Canaccord Genuity – which was at hand for Marley Spoon's raising in May and helped float it in 2018 – was lead manager and underwriter on the deal, while Wilsons was chipping in as co-manager.

The placement was priced at $3.22 a share, which represented a 5 per cent discount to Marley Spoon's one-day volume weighted average price.

The capital raising coincided with the release of Marley Spoon's results for the September quarter.

The company was expected to unveil big growth in its US business, including a 163 per cent rise in revenue compared to the September 2019 quarter.

Caltex Australia chief executive Julian Segal shook off concerns about any impact from the growing take-up of electric cars on the initial public offering of 250 of its service stations, saying the business was future-proofed thanks to its strong retail arm.

The IPO, which analysts expect could raise about $1 billion, is proposed for the first half of 2020, with Caltex willing to sell up to a 49 per cent stake. The 250 ''core'' sites in the proposed real estate investment trust make up about half of Caltex's 500-strong petrol and convenience store retailing network.

Caltex shares climbed 6.97 per cent to close at $29.79 on Monday as analysts tipped a significant capital return from the proceeds. They were also buoyed by a separate announcement that Caltex's profit margins on its petrol business improved in the second half.

Mr Segal, who signalled in August he would step down as CEO after 10 years in the role, said the time was right for the property IPO after a comprehensive review of the group's network.

"There's a lot of value that is locked in the company,'' he said.

The property trust will receive rental payments of between $80 million to $100 million from Caltex in the first year. Most of the 250 sites are in New South Wales and Queensland. A further 50 sites have already been earmarked for sale, and they could fetch a combined $130 million.

Chief financial officer Matt Halliday said the group was adamant that it needed to maintain ultimate control of the sites and was only prepared to sell up to a 49 per cent stake.

"We absolutely must have clear operational and strategic control of these sites,'' he said.

But with ultra low-interest rates around the world, investors chasing yield would be attracted, particularly with the strength of the Caltex brand.

"You've got the Caltex reputation,'' he said.

RBC Capital Markets analyst Ben Wilson said the trading update was positive and the REIT would be ''well received as it unlocks value from the freehold sites via a strong REIT market''.

A ''significant portion'' of the proceeds from the IPO could be returned via an off-market buyback in the second half of 2020, Mr Wilson said.

He estimated that the 49 per cent holding could be worth between $900 million to $1.1 billion based on similar REITs and a capitalisation rate of around 4.5 per cent.

Caltex said full-year earnings before interest and tax at the convenience retail division will be between $190 million to $210 million, thanks to better fuel margins in the second half. That's still about 32 per cent below the previous year's EBIT.

Caltex also generated market share gains in petrol retailing, will total fuel sales volume from convenience retailing arm now expected to be about 4.8 billion litres in 2019. Caltex reported falling first-half profits on August 27 after tough conditions in both retailing and refining.

Front foot

Mr Segal said Caltex had been on the front foot in changing the Caltex sites from just selling fuel.

"They're designed to attract customers to come for the shopping experience not just for the fuels.''

It would also be a long way into the future before electric vehicle use up-ended the business model, even though Caltex was factoring in a gradual shift: "I think electric vehicles will play an important role. The question is what is the timeframe,'' Mr Segal said.

Earlier this month, Woolworths and Caltex said a new chain of stores selling fresh food, groceries and fuel would raise the bar in the $8.5 billion convenience sector and change the way people shop.

Australia's largest supermarket chain and the nation's leading fuel retailer unveiled the first of about 250 Caltex Woolworths Metro stores earmarked to open over the next few years under a long-term supply agreement.

A pilot store in North Ryde in Sydney carries about 2500 packaged grocery products as well as sandwiches and salads, along with fruit, vegetables, meat and prepared meals.

The stores, a mini Woolworths Metro in a Caltex service station, are designed to appeal to time-poor customers who can shop for food and fuel on the way to or from work.

Online wine merchant Vinomofo has lost its co-founder Andre Eikmeier and seen its major investor Blue Sky Venture Capital collapse in the past year, but it has turned its first profit to ease fears about its dwindling cash pile.

Despite revenue in 2018-19 remaining flat at $45 million from the year prior, Vinomofo made an after-tax profit of $280,704 after losing $198,260 in 2017-18, according to accounts lodged on November 4 with the corporate regulator.

As part of the Blue Sky portfolio hived off to Oaktree Capital subsidiary Australian Alternative Asset Partners in June, the fate of the Melbourne-based e-tailer – which claims that 300,000 people bought wine from it in the previous 12 months – is being keenly watched. Oaktree, the US private capital giant, forced Blue Sky into receivership after the Gold Coast manager defaulted on a $50 million loan.

A major factor in Vinomofo's improved bottom line was $758,065 of interest being forgiven on a related party loan from the Vinomofo group subsidiary holding its share capital, which was converted to $10 million of equity in 2018-19.

Vinomofo co-founder Justin Dry said the $10 million had come into the group as equity, and that new auditors PKF, which replaced Deloitte during the year, had advised it was more accurate to represent the funds as issued capital than as a loan.

The conversion allowed Vinomofo's operating company to record a positive net asset position of $2.6 million after a negative $7.7 million position the previous year.

Mr Dry claimed the conversion had nothing to do with the disappearance of Vinomofo's main potential source of future funding, following the collapse of the Blue Sky group into administration.

Tightened purse strings

However, he said the business had in the past two years adopted a focus on profitability and halting its cash burn.

A big-budget television commercial and a now-stalled attempt to crack the US market had seen Vinomofo fast running through its funds, with $9 million of cash in 2015-16 dwindling to just $1.5 million last year.

However, $1.4 million still remained by the end of this year, and Mr Dry said Vinomofo's Singapore division was also profitable and throwing off cash, while taking the group's total revenue to "well over" $50 million.

There was a $2 million jump in inventories to $4.9 million, which Mr Dry said related to an expansion in range to include established brands at normal market pricing, rather than a focus on only daily deals.

There has also been a pivot into what Mr Dry called the "SOLA movement" among wine consumers, which stands for sustainable, organic and low-alcohol varieties.

Now that the business was profitable, Mr Dry said it did not require more funding for the foreseeable future. According to its regulatory filings, Vinomofo has paid-up capital of $74.7 million in ordinary shares, much of it from wine industry investors. There is an additional $25 million in Series A capital from the Blue Sky investment in 2016.

Co-founder departure

The other big change for Vinomofo in 2018-19 was the complete departure of Andre Eikmeier, who founded the business alongside Mr Dry in 2011.

When Mr Eikmeier stepped down as co-chief executive in September last year, Vinomofo announced he would stay on as a director and adviser, however he resigned from the board in May.

Mr Dry said the split with Mr Eikmeier, who is also his brother-in-law, was amicable and was a case of the pair having grown too much alike.

"We were a perfect match early on, with very different skill sets, but it got to where we'd rounded them out about the same and the business needed someone looking at it from a different angle," he said.

The two co-founders each retain 20 per cent of Vinomofo, however Mr Eikmeier is now focused on his Adelaide-based GOOD Agency, which helps businesses develop their brand, culture and vision.

Mr Dry said Mr Eikmeier helped replace himself on the board, bringing in Adelaide-based charity executive Paul Edginton as chairman.

The former Blue Sky executive who now represents Oaktree's interests on Vinomofo's board, Nicholas Dignam, was contacted for comment on the manager's plans for its investment but he did not respond.

Metcash has suffered a major blow to its wholesale business, after 7-Eleven announced it will not be renewing its contract with the food and beverage supplier.

Metcash said in a statement to the ASX on Friday afternoon that it was “unable to reach an agreement with the convenience chain 7-Eleven on its supply requirements for the east coast, including delivery routes and scheduling”.

Metcash felt that the requirements laid out by the chain would lead to supply being “uneconomic” for its convenience business.

Metcash’s convenience sales to 7-Eleven are worth approximately $800 million annually, mostly in lower-margin tobacco products.

Metcash said it will be looking for ways to offset the impact today’s announcement will have on future earnings.

The grocery wholesaler is still in discussions with 7-Eleven about supply to Western Australia and a number of smaller categories on the east coast.

Today’s announcement is just the latest in a string of blows to the business. In September, its largest wholesale supermarket, Drakes, announced that it was going out on its own, with its departure from the group set to cost Metcash around $270 million in sales.

Drakes ended its SA contract in 2018 after Metcash announced plans to open a new purpose-built distribution centre.