Tag: I’ve been thinking
Where is the ‘fine line’ then? The supermarket industry’s Rubicon? Tesco already sells anything from Life Insurance for your pets and travel to distant shores to party services. By the way, you can get your groceries there as well, including fresh produce…. In future though, starting in South London by the looks of things, shoppers will be able to just pop down from their high-rise flat to their local Tesco store on the ground floor…their Tesco flat that is in the apartment building Tesco has built!
The days when supermarkets just focused on selling FMCG products to willing buyers and saw their place in the supply chain as connecting manufacturers and shoppers are long gone and nowhere is that more obvious than in the UK. For the last 20 years, UK supermarkets have been depicted as the bad boys on the block for developing standalone stores and shopping centres at the outskirts of towns and therefore deconstructing High Streets. High Street now becomes a very viable proposition for smaller format food stores run by supermarket chains and, hey…if there is some urban development that can go with it, the much the better.
We have a whole city that needs redeveloping…may be we should sack the Canterbury Earthquake Recovery Authority and invite Tesco to have a go? Can’t be any worse by the looks of things.
Meantime back here in New Zealand politics, the Labour Party Leader Selection Carousel has started to spin and Shane Jones, the contender least likely to be successful, stated on national television that supermarkets are akin to ‘brown shirts’ and needed regulating. His point being that a duopoly as exists between Countdown and PAK”n SAVE /New World does not provide sufficient competition to keep food prices affordable.
He has a point about duopolies – but only up to a point! We have three limitations in this country which are underlying factors of the duopoly situation that has evolved over the decades – because our food retail industry sure did not start as a duopoly operator.
Firstly, we are a nation with 4.5 million inhabitants which does not give us critical mass in any way, shape or form. Secondly, one-third of New Zealanders are akin to a giant Gannet colony, squeezed together in the Greater Auckland area. This means our lack of critical mass is enhanced further in a negative sense. Thirdly, as a food exporter, our domestic price structure for meat, dairy and fish is linked to what we can achieve for our goods on the global market.
You can’t just regulate that, get real, Jonesy. Your Leader before the one trying to sell snapper in Parliament was bad enough when he wanted to upset the simplest and most effective GST system in the world by making fruit & vegetables GST exempt. The chaos that would have caused is nothing compared to what would happen if you attempted to regulate supermarkets.
All this suggests to me that there is money to be made with an inoculation system for wannabe party leaders which ensures they are administered a healthy dose of economic realism before they wander off and make rash promises in order to be elected.
I wonder whether I could obtain a grant for the necessary research from the Minister of Everything?
Posted: September 2nd, 2013 under Supermarkets- the other stuff, Thoughtpieces.
Tags: I've been thinking, innovation
There seem to be some changes afoot at Horticulture New Zealand. Some quite obvious, some not quite so. Andrew Fenton, the organisation’s inaugural president has hung up his shingle as far as that office is concerned, although he is continuing on the Board. Andrew had a good run and worked hard at moulding those two fairly disparate bodies VegFed and FruitFed into one homogenous organisation. Opinion is divided in terms of how successful he was in that. My opinion, for one, is this: Andrew provided solid leadership to Horticulture New Zealand. And leaders are not there to be liked, they are there to be respected. His presidency had to cope with the potato psyllid, kiwifruit PSA, a blurring of lines of how to define a grower, a whole bunch of other issues and a Government which firmly believes that grower pockets are deep enough to pay for part of the country’s Biosecurity incursion response costs. So yes, Andrew was a successful president.
Andrew’s successor, Julian Raine, is a Mainlander, as is the Vice President, one Brian Gargiulo, this well known Banana grower from Christchurch. – At least this is how Brian referred to himself at the speaker’s podium recently. A remarkable transformation from growing little round green fruit that ought to be red to longish bent green fruit that turn yellow if you know your stuff, but I am digressing. -
Julian is also a kiwifruit grower. He does not just grow kiwifruit, he is also into apples, boysenberries and blackcurrants – but kiwifruit are part of his diversified portfolio. My point being? Well, no one should be surprised about the fact that a kiwifruit grower follows a kiwifruit grower in the presidency of Horticulture New Zealand and if you believe its a coincidence, you probably still believe in Father Christmas and the Tooth Fairy.
I am not complaining and I am sure Julian will also be a worthy leader of Horticulture New Zealand. We just need to understand that with the weighting kiwifruit has in our fresh produce export portfolio, a kiwifruit grower as President is more or less a foregone conclusion, like it or not. What will Julian’s challenges be then? There will be plenty I reckon. Some have been around since Adam was a cowboy, others are raising their head now.
I picked up this booklet on ZESPRI 2013 Grower Payments up at the conference and Julian, being a kiwifruit grower himself, will obviously be familiar with the content. The booklet is very well laid out, easy to follow and anyone who reads it is left in no doubt that the kiwifruit sector is, despite PSA, well organised and displaying all the hallmarks of a well organised industry, where growers know where they stand, how their payments are structured and how excellence is awarded. If one compares this with a broccoli grower supplying local supermarkets at the other end of the scale, one gains an appreciation how diverse the produce industry is and that growers face rafts of differing issues, depending on what they grow, how they are organised and whom they supply.
One of the recent HortNZ weekly e-mail newsletter updates announced the formation of a “working group to look at the organisation’s structure and Board election processes. The group will develop a discussion paper including a description of the status quo and various options for change to enable wider industry discussion.” That announcement relates to the recently published Future Focus report. Two of the fundamental pillars of that report clearly do not sit well with all growers, particularly some of the the larger growers who are very focused on their specific crops and consequently have put a lot of energy into building robust product groups affiliated to Horticulture New Zealand.
A Motion was therefore put to the Horticulture New Zealand AGM in July 2013, Motion 6, entitled PRODUCT GROUPS NOT GROWERS AS MEMBERS OF HORTNZ which wanted to see individual growers to be funneled into product group membership and product groups being the only Horticulure New Zealand members. The order paper containing all motions is noteworthy for three aspect in relation to Motion 6. Firstly, Motion 6 is the only motion on the Order Paper that starts with a legal opinion – a sign that this is a meaty issue indeed. Secondly, the Explanatory Note accompanying the motion states that only 28% of growers voted in the 2012 Commodity Levy Referendum, suggesting that Horticulture New Zealand “remains disengaged…with approximately 4,000 growers.” If that is correct, then we are seeing an accelerated rationalisation process taking place within the industry. A successful levy referendum needed to be supported by more than 50% of voting growers and more than 50% of associated production volume. Growers seems to be be further reducing in numbers and the remaining ones are getting bigger and are diversifying into other supply chain functions. Thirdly, this motion can only be seen as a direct challenge to the existing structure and task allocation of the grower bodies, with product groups lining up on one side of the fence and Hort NZ on the other. Not a pretty sight if it gets ugly.
One of the signs that “ugly” is not too harsh a term to use, played itself out in the Tomato Sector Conference held in conjunction with the main Horticulture New Zealand event. Arriving midway during the morning session, I promptly realised that I had walked into a stoush between growers and the independent sector chair. It seems that the product groups chairs at a meeting earlier in the year decided to place a cap on operating grant applications accepted from local grower associations. Given that it is grassroots growers at local level and regardless of size who are paying the levies to both Hort NZ and their respective product groups, a fair head of indignant steam was being vented by amongst others, the aforementioned Canterbury banana grower.
And do you know what? They have a point. With growers providing the money in the first place, it is a little hard to swallow for them that they should now be limited in funds they can apply for to run their local activities. With any organsiation, a healthy grassroots structure is the critical platform to achieve critcial mass, whether you are a member organisation, a supermarket chain with local branches or a political party with local MPs. What we seem to have here is a national body under attack from product groups wanting to pursue their own agendas; more product groups appointing independent chairs, wishing to inject heightened levels of objectivity, skills sets and professionalism into their performance; and, growers funding both bodies but with reducing ability to pay for their local industry association activities unless they want to dip their hands into their wallets a third time.
Is it a surprise therefore that growers are disgruntled? No! And what’s more – all the above discussed lines of thought are very plausible when assessed in isolation – unfortunately, we are living in the age of global connectivity and isolationism is no longer good enough. Does this need to be sorted? Absolutely? When? Yesterday! Why? Because the common ‘enemy’ is ‘out there’, not amongst us!
And before any grower reader of this column starts wondering why a non-grower like me is getting interested in how Horticulture New Zealand and the issues it faces will evolve, I suggest you head for the this page of the Hort NZ site. Julian, I wish you well.
Posted: August 25th, 2013 under Industry Politics, Thoughtpieces.
Tags: growers, I've been thinking
We might be a fairly sophisticated lot, us humans, but there are some basics facts in play, which apply regardless of where we live, of our gender, our age or our occupation. I want to focus on just one of those facts for now; namely, the fact we need to eat. And as we , at least in the OECD countries, lead relatively charmed lives these days. We do not even need to make time for hunting and gathering in the traditional sense in our busy schedules… we are able to just go shopping.
The places where we tend to shop for food are typically single category stores such as bakeries, butcheries, delicatessen stores, open air markets and supermarkets. Nobody makes us favour one over the other, nobody stops us from mixing and mingling, nobody says we need to shop daily, nobody stops from just shopping fortnightly and, most certainly, nobody prevents us from placing whatever we fancy into those shopping trolleys. Naturally, there are constraints, such as the depth of our wallet, our dietary needs, distance between store and home, our mode of transport; but those factors not withstanding, life is pretty easy. Our mind articulates a need and hey presto, we are down at the store, meeting our mind’s request. Wouldn’t you agree that there is a far higher degree of certainty to that model than there is to the traditional style hunting & gathering lark?
So, if we are in agreement of that, why is it that not one week goes by where one or other consumer group gripes about the price we have to pay for our food? Not shopping is not compatible with the structure of the post-industrial age we live in. Period. The provision of shops where we can hunt & gather in a style more appropriate to today’s society is therefore a value add offer in its own right, regardless of what type of shopping experience we choose and prefer.
I would like you to think about that last sentence a bit before you read on….
Food shopping outlet price comparisons are a dime a dozen. Everywhere. And they all follow the same model… Supermarkets get the bash for being too expensive, green grocers tend to be cheaper but possibly lack range and discount stores sit somewhere in between. Right?
Channel 4 in the UK published a price survey, at the end of January 2013. It makes for entertaining reading.
Firstly, their survey was based on three items only; “everyday fruit & vegetable items” they called them. I can accept that description for Broccoli. Pears are not really an everyday item and Coriander most certainly is not.
Secondly, the survey was conducted in “32 locations across the country”. Hm, given the population density of the UK, this is certainly not representative by a long shot.
Thirdly, and here is a new aspect for us here down under, the three categories sampled were a
- large supermarket,
- an independent trader (greengrocer)/ local market,
- a convenience store version of the large supermarket.
Well, this is one for the books. The penetration rate of these shoebox supermarket mini versions is now such that they come under the spotlight of the
price nazis consumer rights media.
I shall leave you to read the survey results in your own good time but, for me, the issue boils down to this: what price is reasonable for convenience? We will pick that theme up again in a little while.
Posted: April 7th, 2013 under Consumer, Supermarkets- the other stuff, Thoughtpieces, value-add.
Tags: Consumer, equilibrium, I've been thinking
Who doesn’t remember this Johnny Cash Classic?
There has been a bit of hype in the media over the last few days in relation to Turners & Growers CEO Geoff Hipkins. Is he there or is he not? What exactly happened in Berlin? What is the T&G board going to do about it?
Let me try to make some sense out of this from my perspective. And, by the way, I have two perspectives here – as an industry commentator and as a T&G shareholder…
As an industry commentator I have to say that reputable publications such as fruit net do not run stories for purely speculative reasons. So where there is smoke, there is also going to be fire. The produce industry is a people industry. We don’t always agree with each other and we are often found taking diametrically opposed positions, but at the end of the day, the industry functions because of common courtesy and respect being the fundamental pillars upon which business relationships are built. And when these pillars start to crumble, business suffers.
Respect goes beyond today and reaches into the past…Respect for accumulated knowledge, respect for institutional memory, respect for lessons learned from past mistakes, respect for an in-depth understanding on how the produce industry works. It seems that there might be room for improvement in this department if the ENZA Gold growers are to be believed.
As a T&G shareholder, I am a little disturbed to see the losses mounting, key staff disappearing, not so well thought through import deals causing disturbance in the market place and I am sure others share these concerns as well.
The cryptic message to the New Zealand Stock Exchange on the matter of recent media speculation therefore only adds fuel to the fire. It does not calm the waves.
Which brings me back to Johnny Cash. How high will the water need to rise?
Posted: March 11th, 2013 under Industry Politics, Observations.
Tags: I've been thinking, Turners & Growers
Eyeing The Fruit Stand
John George Brown
Now I have heard it all. To save me repeating myself, readers should start by checking out this link on the NZ Herald website before reading on. Go on, do it now!
Here we have a scallywag who thinks it is ok to wander into a New Plymouth supermarket and start eating the food on display, which happens to have been nectarines, on the basis that he had no money to pay for them. The court case was heard in Kaitaia and defence counsel claimed that her client had been living on the streets of Gisborne.
The first thing that comes to mind is that its a long way between New Plymouth, Kaitaia and Gisborne. Several hundred kilometres in fact. And to cover this distance one needs money…. But we don’t have the money to pay for a nectarine? The second thought is – do our courts really have nothing better to do than prosecute a young layabout who helped himself to one piece of fruit? Court costs, judge’s salary, defence counsel’s fees, the mind boggles. The third tought – there is a whole social argument hidden here in the trenches. We are mammals which need to eat when we are hungry and drink when we are thirsty, otherwise we die. Yet our societal structure has evolved to the extent that we actually need this artificial invention called money that drives the concept called trade in order to provide sustenance for ourselves. Have we gone too far? And lastly – back to the commercial reality we are a part of, like it or not – what does the produce industry have to do to get consumers, including judges, to understand the true value of fruit? $1.25 in reparation is quite ridiculous from that perspective. All it will do is drive the message home that fruit is of very little value and its ok to help yourself. I wonder what the sentence would have been if Master Casford had opened a can of Coke instead?
Posted: February 14th, 2013 under Consumer, Observations, Produce, Summerfruit.
Tags: I've been thinking, supermarket