U.S. Tariffs Weigh on MyEco’s White Label Sales Despite Strong Domestic Growth

Sustainable Growth Despite Global Challenges

MyEco Group Ltd (ASX, MCO), a key player in sustainable packaging, has released its sales update for the first quarter of fiscal year 2026, revealing a nuanced performance shaped by both promising growth sectors and external headwinds. The company posted total group sales of $3.7 million, marking a 2% increase compared to the same period last year.

Driving this growth was a remarkable surge in the Council and Waste channel, where sales more than doubled, climbing 103.8% year-on-year to $1.7 million. This was bolstered by the rollout of the Ballarat Council tender, which reached over 55,000 households, and reflects the growing adoption of food organics garden organics (FOGO) programs across Australia. Regulatory mandates, particularly in New South Wales, are expected to further accelerate demand for compostable products as supermarkets and hospitality sectors prepare to comply with new waste collection requirements.

Retail and Market Share Leadership

MyEco® branded products also contributed positively, with global sales up 8% year-on-year to $1 million. The company continues to dominate the compostable bin liner and kitchen caddy categories in major Australian supermarkets Coles and Woolworths, holding market shares of 39% and 62% respectively. However, quarter-on-quarter sales dipped 16.9%, a fluctuation attributed to the timing of promotional activities and typical sales lumpiness in large retail chains.

White Label and Resin Sales Under Pressure

Conversely, white label sales experienced a significant decline, down 26.7% year-on-year and nearly 60% quarter-on-quarter. This drop is largely due to recent U.S. tariff policy changes that have disrupted trading conditions, alongside a high comparative base from a major UK order in the previous quarter. Resin sales also fell sharply by 62.5% year-on-year as MyEco strategically prioritized resin production capacity for its own branded products amid volatile market conditions. The company is actively developing advanced compostable resins in collaboration with research institutions to enhance product sustainability and application breadth.

Strategic Outlook and Market Expansion

Looking ahead, MyEco Group remains cautiously optimistic. The company is focused on embedding its refined sales strategy and operational restructure to drive long-term growth and profitability. While the medium-term impact of U.S. tariffs presents ongoing challenges, MyEco is expanding its footprint in markets outside the U.S., including Mexico and Canada, to diversify revenue streams. The continued rollout of FOGO programs and regulatory support in Australia underpin a robust demand pipeline for its compostable products.

Overall, MyEco’s Q1 results reflect a company navigating complex global trade dynamics while capitalizing on domestic regulatory tailwinds and expanding sustainable product adoption.