Archive for April, 2014

The Winter’s Tale

seeka_kiwifruit_industries_limitedOnce upon a time, there was “an integrated kiwifruit orcharding and post-harvest company” called Seeka Kiwifruit Industries Ltd, which ran a pretty tight ship in a sector of the produce industry the business understood really well – kiwifruit. That was not a surprise to anyone because one would expect kiwifruit growers to understand everything there is to understand about kiwifruit. And if there was something about kiwifruit the kiwifruit growers who owned the orcharding and post-harvest company did not understand about kiwifruit, they could always ask the good people at Zespri who understand the marketing aspects of kiwifruit really well. Because unlike the orcharding and post-harvest company, Zespri really understands everything there is to understand about dealing with kiwifruit retailers and their needs, demands and quirks.
Being a kiwifruit grower has had its ups and downs in recent years, but the kiwifruit orcharding and post-harvest manager in question sought NZX listing and developed a strategy which can be found on its website. The strategy says that the company wants to be “New Zealand’s premier produce business”, and that “developing complementary business” will add to the company’s prospects for future growth. As one would expect from a kiwifruit orcharding and post-harvest company, it already packs a complementary crop, avocados, and the 2013 Annual Report states “limited volumes of Kiwiberries will be handled…in 2014”.

No big surprises so far – and the fairly ambitious statement about wishing to be the country’s premier produce business could be seen as a bunch of Bay of Plenty growers having gotten carried away at a strategy & vision session.

And then there was this announcement recently:

Seeka Kiwifruit Industries Limited advises that it has agreed to purchase Glassfields (NZ) Limited“.

I beg your pardon?

Did I get this right?  A kiwifruit orcharding and post-harvest company is buying a banana importer which exists at the grace of Countdown?

Apparently, I did understand correctly.  The purchase was completed on 17 April.

Now, adding a banana importing and ripening interest to one’s produce business activities is a significant undertaking in anyone’s book.  Well, almost anyone’s.  Here is how Seeka classified its move:

“Glassfields is a small but important step in Seeka achieving its strategic goal of becoming New Zealand’s Premier Produce Company.”

A small step? I don’t think so.  Bananas are the ultimate big league product. Kiwifruit are important to the extent that we manage to fill whole reefer vessels here in New Zealand and send them to the world’s markets.  But within the context of the global fruit trade, Kiwifruit are one of many ‘also run’ sub-tropical products on offer on the world’s fruit & vegetables shelves and any supply issues or disruptions at store level is at best of nuisance value. Woe behold though, if a supermarket experiences a banana supply problem and be it ever so small. Produce shoppers judge the state of the whole  produce department on the quality of the bananas for sale and any deviation from the norm in terms of volume, ripening stage, shelf life or size will lead to pretty hefty “Please explain” requests being issued by agitated banana category managers, and depending upon the severity of the deviation, more senior supermarket managers will fairly rapidly become involved as well. An attention level not afforded to Kiwifruit, Avocados and Kiwiberries I might add.

fortune favours the bold

I am sure Countdown doesn’t think that step is all that small.  Although Countdown has started to diversify its banana offer in recent months, Glassfields was after all started to facilitate the supermarket’s ability to break free from having to purchase bananas from the global brands such as Dole and Bonita and their local supply partners.  Glassfields manages the logistics of getting Countdown’s Gracio bananas (a Sumitomu brand) into the country and into the retailer’s stores.  ’Manages’ as opposed to buying, as Countdown has a direct supply relationship with Sumitomu, as well as with its new Ecuadorian supplier, of course.

So – whilst the whole banana supply scene has become more diversified as the result of advances in  container shipping technology and practices, I would still call it a bold step for a kiwifruit orcharding and post harvest company to leapfrog to banana ripener and distributor status in its quest to grow, diversify and secure its business. One can only wish Seeka well in their endavour.

By the way, did you  figure out why the story is entitled ‘The Winter’s Tale’?  You might want to check this page. The first paragraph will suffice.

There Are Two Sides To Every Story

Similar but not identical produce crates from a bygone era

Similar but not identical produce crates from a bygone era

Australia and New Zealand share a lot of common history, have strong bonds as ‘brothers in adversity’, are closely cooperating members of the Commonwealth, often take a joint approach when it comes to tackling injustices in their common neighbourhood, such as the support for Timor Leste and getting the Japanese to stop whaling under scientific pretences in the Southern Ocean.

Then there are the sporting rivalries. Cricket, rugby, rugby league, netball, basket ball – the sport where our Australian cousins don’t claim to be superior beings has yet to be invented. Phar Lap, Pavlova as well as Russell Crowe, by the way, do have their origin in New Zealand, not across the ditch.

In the greater scheme of things though, we do get on. The similarities are obvious in many areas of society and in the economy. This includes horticulture and the produce industries of our respective countries.

United Fresh, the pan industry body of the New Zealand horticulture and produce industries, was very supportive when the Australian produce sector decided to re-establish an industry association under the PMA banner and suggested it became known as PMA Australia and New Zealand. That was because we recognised the similarities and trade connections that existed between our respective produce industries.

However, the terms ‘similar’ and ‘identical’ are not synonymous. Differences do exist and as a result of those inherent differences, industry structures present differently as well. I was therefore surprised to note the tone of an article about the Australian and New Zealand produce industries and their structures in the Autumn 2014 edition of Produce Plus Magazine. The article, entitled “Collaboration or Competition”, included this sentence:

“But there appear to be many opportunities for collaboration that are not being pursued, either for a lack of will or because existing competitive positions amongst stakeholders are too deeply entrenched.”

This statement is in my view either outright mischievous or an indication of a lack of knowledge about how different the two industries are – despite all the obvious similarities.

Here then are some key differences which will continue to play their role in ensuring that the Australian and New Zealand produce industries will never be collaborating to the extent that national identities are lost.

  1. Australia is a tropical fruit producer; New Zealand’s climate does not cater for these crops.
  2. Australia is self sufficient as a banana producer and bans banana imports to protect its local industry. New Zealand imports all its bananas, predominantly from the Philippines and Ecuador.
  3. New Zealand’s fresh produce industry is export focused, with the Zespri and Enza brands standing out as prime examples of what the New Zealand industry can achieve in global markets. Australia has an interstate focus, with exports coming a distant second.
  4. Australia’s capital cities operate municipal produce wholesale markets. No such markets exist in New Zealand cities. Here, commercial companies operate wholesale trading floors where retailers who do not receive direct supplies from growers can purchase their produce.
  5. New Zealand’s geography and topography differ to that of Australia. We might drive produce overnight from Auckland to Wellington. In Australia, produce is trucked by road train from Brisbane to Cairns, a journey that takes several days.
  6. New Zealand ranks joint first (with Denmark) in the global Corruption Perceptions Index 2013 of the world’s least corrupt nations. Australia ranks joint ninth (with Canada).
  7. New Zealand looks at Australian produce from the perspective that if it makes commercial sense to import the produce, then we will need to find a way to make it happen. Australia’s position is that New Zealand produce belongs anywhere but Australia.
  8. New Zealand has had very stable and effective grower and produce industry associations in Horticulture New Zealand and its predecessors, its affiliated product groups and United Fresh. PMA Australia (without the New Zealand bit) is the latest attempt to get an effective and sustainable produce industry organisation up and running in Australia.
  9. Australia’s federal political structure provides the Australian horticulture industry with plenty of challenges which we, on this side of the Tasman, are not experiencing. One central government and a multitude of local government agencies keep us on our toes enough as it is. This makes us very nimble, lean and ensures our effectiveness as in industry – something we are not keen to compromise.

Collaboration is a two way highway, not a one way street or cul de sac. I am sure that there is always more room for collaboration – just as we will never be able to collaborate on all facets of our respective produce industries.

One area the Australian and New Zealand produce industries have been collaborating on is this year’s industry conference, PMA Australia and New Zealand Fresh Connections. The event is co-hosted this year by PMA, Horticulture New Zealand, The Australian Chamber and United Fresh. An example for a plausible and achievable bit of collaboration, is it not?

Disclosure Note

The writer is a member of the United Fresh Executive Committee and a Trustee of the 5+ A Day Charitable Trust.  The opinions expressed here are his personal ones.

You Know The World Is Upside Down When (II)

cabbage

Cabbages claim first prize in a Verbosity challenge, involving some pretty important documents on mankind’s radar.

This little comparison is currently making the rounds.

Not sure where it originated. Inevitably, one of our team members, Helga, picked up on it on account of cabbage getting a mention in dispatches. 

Pythagoras’ Theorem: …………………………24 words
Lord’s Prayer: ………………………………………… 66 words
Archimedes’ Principle: ……………………………..67 words
Ten Commandments: ……………………………………179 words
Gettysburg Address: ……………………………………………….286 words
US Declaration of Independence: ………………………….1,300 words
US Constitution with all 27 Amendments: …………………………7,818 words
EU Regulations on the Sale of CABBAGES: ………………..26,911 words

I haven’t been able to lay my hands on the EU cabbage document yet but you might want to start looking for it yourself here, at the entry portal for EU Fruit & Vegetable Standards.

You Know The World Is Upside Down When (I)

A newspaper thinks it needs to operate an online garden centre.

Guardian garden centre

Not a belated April Fool’s day Joke but the website of the virtual garden centre operated by The Guardian newspaper in the UK. If nothing else it confirms that being a champion in an existing consumer channel offers little protection from operators emerging from entirely different channels looking  for new ways to generate income  - because they can!