Archive for 'Produce Companies'

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.

BayWa – Bayern Munich Fan Extraordinaire

baywa bag
Wandering through one of Munich’s shopping streets last Saturday, I came across a BayWa promotion….in their role of Bayern Munich sponsor. Being the naturally curious fellow that I am, I stopped for a visit and was promptly accosted by one of the promo girls, screaming into my ear, how absolutely marvellous it was that Bayern Munich had managed to get into the playoffs – and would I like to win a set of tickets for the playoffs?

Wow, I thought with a typical consumer reaction, pretty impressive.  And yes, I sure would like to be at the Munich/Dortmund Champions League final at Wembley later this month…that was the playoff I thought she was talking about. So I handed over my details and received this little bag in return. Glossy bag, bottle of water, an energy bar and an absolutely misshapen Granny Smith apple.

“What’s all that?”, I asked the young lady. “Well”, she said, we would like you to know a little bit more about BayWa. The water stands for our energy business, the muesli bar for our building supply activities and the apple represents our agriculture business. And we just love Bayern Munich.”

I did not take a closer look until I got back to my hotel later on and unpacked the bag properly.  The apple sure was not a good sight from a company which seems to consider itself to be a premium apple merchant.  I guess, one simply can’t just expect every apple to be the same…as one can with bottled water and muesli bars… or heating oil and building supplies…the prices might change but at least the product consistency would not change drastically.  Lessons to be learnt.

The lesson I learned was to read the fine print.  BayWa does not sponsor Bayern Munich, the soccer club…. but the Bayern Munich basketball section, so even if I win the tickets which I doubt very much, I would not be going to Wembley Stadium but to a basketball game in Munich.

A bit of a let down BayWa.

 

 

David Smith – Pony Finder Extraordinaire

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© 2013 Chattanoogaville.com

Many of you would have heard the following story before, in one form or another…

“One day a scientist decided to run a test on two boys. He took the pessimistic boy to a room full of new toys, telling him that they were all his. He immediately began to cry saying that one day they would all break. He then took the optimistic boy to an old barn which contained a huge pile of fresh steaming horse manure. The boy was immediately excited, grabbed a shovel and began digging in the manure. The stunned scientist asked the boy what he was doing. The boy immediately responded that with all this horse manure there has to be a pony in here somewhere.” (Anonymous).

And we have all been watching the fall out at Turners & Growers with great interest…

Well, if there is one guy in the New Zealand produce industry who has over decades consistently displayed great aptitude in finding the pony, then it would have to be Dave Smith at Freshmax.

Snow Hardy, Terry Brown and now Alistair Petrie are a right little troika of ex T&G ponies to emerge at Freshmax.  I would suggest – watch this space.

And now, for some thing completely different, here is a link to a famous Monty Python sketch, where John Cleese is teaching his colleagues how to defend themselves against being attacked by fresh fruit.  The banana segment is especially worthwhile watching.

Turners & Growers – Timeline Fog Lifts Further

turners&growers

 

 

In April 1970, thirty-three years ago, Foodtown was heading for its 12th store in Auckland, Birkenhead.  Once again, the supermarket chain suggested to Turners & Growers that there might be merit in working together to achieve direct fruit and vegetable deliveries from growers to a Foodtown warehouse for distribution to individual stores.  Jack Turner, who by then had succeeded Sir Harvey Turner as Managing Director felt that “any agreement to arrange direct supplies from growers would be against the wishes of growers…” (Stead, K. One Hundred I’m bid. A Centennial History of Turners & Growers, 1997. ISBN 0473 04169 3. Kestrel Publishing)

The T& G board advised Foodtown that “it was not prepared to agree to its proposal as the board was convinced it would be contrary to the interests of growers, consumers, retailers in general and the company”. (Ibid).

Foodtown responded “that it would continue to try to get whatever fruit and vegetables it could directly from growers themselves.” (Ibid)

And so the battle lines were drawn.

On one hand, the traditional produce wholesale company which had by then successfully been in business for half a century.  In the opposite corner, a business which had barely started a dozen years earlier and already threatened to disturb the industry fabric. Judged from a given point in time in, say 1970, one can understand the Turners & Growers perspective.  The system was working.  It was not broken.  Therefore no need to fix it.

From the supermarket’s point of view though, the system was already beginning to fray at the edges.  Getting produce to twelve stores every morning came with its challenges and being able to take possession of that produce the night before would have been a lot easier as the auction process itself was not very efficient.  Here is a description from the Auckland Fruiterers Association site.

Foodtown therefore quietly continued to build a core group of growers prepared to deliver some produce direct whilst maintaining a daily presence at the auction markets.

to be continued

 

Turners & Growers and Mr Tom Ah Chee

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The Turners & Growers Annual Report for 2012 showed up in the mail today.  I was tempted to comment straight away but I will wait for a while and let it settle.  In the meantime, I shall continue with the missing years in the Turners & Growers timeline.

Fruiterers are innovative fellows and in the mid-fifties one of them, a certain Tom Ah Chee whose family fruit & vegie shop was up on Karangahape Road started dreaming  – and he dreamt big.  So big in fact that when he retired he could look back onto a company that started from the one fruit shop and had spawned 30+ supermarkets in Auckland, Hamilton and Tauranga at the time.  The company was Progressive Enterprises Ltd and the supermarkets were called Foodtown.

A by-product of that growth was what amounted to a fundamental change to the way the produce business was conducted. Change did not happen overnight…but a head of steam started to build from the early sixties onwards and Turners & Growers were right in the midst of it.

In November 1968, the head of steam had becoming sufficient enough to warrant discussion at a special Turners & Growers board meeting. Here is what the then General Manager had to say to the board .

“For the past few years, a new class of retail buyer has become prominent in Auckland.  I refer to the supermarkets.  These have been established for a quarter of a century and undoubtedly have cut across the retail trade in New Zealand as well as in all other coutries where they operate.  For some time now a leading supermarket organisation had been pressing us to arrange sales of vegetables delievered directly from the growers.Up to the present time we have been able to avoid getting involved in that type of business…One of the leading supermarkets is now exercising further pressure and has intimated that if they are unable to get supplies direct from growers through our organisation they may be forced to dela directly with growers themselves.” (Stead, K. One Hundred I’m bid. A Centennial History of Turners & Growers, 1997. ISBN 0473 04169 3. Kestrel Publishing).

Stead then concludes the section discussing the board meeting as follows: “The board discussed the problem for hours and eventually decided to stick to its traditional knitting:  It resolved that it would “…not make any move away from our present auction system that would help to break it down.”

All I can say – opportunity lost.  20+ years later, in May 1989, Foodtown walked.  Why that took so long and how the separation was achieved will be discussed in future posts.