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.