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Just a thought
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Just a thought One of the things I have been waiting for in the Australian fruit and vege industry has been the appearance of branded produce. Widespread in the US and appearing increasingly in the UK and Europe, it is simply where a company puts its name on a package of produce. You may have heard of Chiquita and Dole Bananas. Well it can be as simple as that or it can be a spread of SKU’s or it can be anything in between. There is one company, Perfection Fresh, operating in several Australian states that is doing a bit of this and that and introducing a few new lines that are not common in Australia; Baby Capsicums, etc. In WA, the Sweeter Banana Company is trying to own the packaged banana market but seems to have lost out to a swathe of locals bagging up Eastern States bananas. This is a real shame because SBC really put the effort in to launch this line in WA and, being a local company, deserves more success. The flipside is that they have been so successful that they simply can’t cater for the local market; it says something about some people that rather than jump onboard a success story, some banana growers are so jealous of SBC’s success that they will sell their bananas at a low margin rather than participate in the programme. A similar scheme operates in Queensland; the increasingly popular eco-banana. Surrounded by dozens of growers using chemicals to grow bananas, the soil and water were never going to be sufficiently contaminate free to gain organic certification. After nearly two decades of no chemical farming, the difference between eco-banana farms and organic farms is negligible. Rather than give up on that hard work, the farms involved simply decided to market themselves as pesticide free, using the distinctive red, green or blue waxes to mark their produce for retailers. So successful has this business been that they were able to retail their bananas at $20 per kilo and still find buyers during the aftermath of the cyclone that devastated the Queensland banana industry and left Australians paying $10/kilo for normal bananas a few years ago. Now, given the success of these three and the plethora of salads manufacturers that have revolutionised that segment of the industry, it is surprising that there are so few other examples. Even in these examples, only one goes beyond the single line and, to be truthful, the single variety. I had the opportunity to speak with some of the people from SBC soon after their market dominance was first challenged and I mentioned that they could preserve some of their profitability by diversifying into some of the other varieties, perhaps marketing them for specific purposes. Having just picked up an award for having the biggest range of bananas in Perth, I was more than able to testify to the fact that there was a demand for apple, red Dakar, lady fingers and several other varieties. I did, however, suggest they avoid one of the mistakes made by Coles when they tried something similar- they marketed a rather sizeable banana as the ‘Lady’s banana’ with a picture on the packaging that subliminally suggested one of the uses for it that appear on some of the more interesting pornography websites (Of course Coles is becoming increasingly notorious for some of the double entendres that appear on its in-house labels). But they balked at the idea, unwilling to see that they had not yet secured their position in the market. It is hard to fault them; they are still able to sell their entire stock without too much trouble, just not the margins they used to enjoy. One does wonder how they will go when the Philippines is finally able to sell us bananas. But we have local successes and an international example and no small amount of opportunity. At the same time as there is a cooking revolution sweeping the country, there is also a lot of pressure on the supermarket duopoly and the fast food giants. It is a small window and won’t last. One of the problems is the retailers themselves. I am forever amazed that the industry in Australia generally, and certainly in WA, is so focussed on price point marketing. The inevitable answer to any setback, regardless of what that setback may be, is to push down the prices and screw everything else. Perth has, finally, accepted that it is 2010 and that late night trade five nights a week is a good idea. It has completely screwed the local IGAs but this always struck me as inevitable. The previous system gave these stores an advantage that was never going to last and which they completely screwed up. It was inevitable that Coles and Woolworths were going to be allowed to extend their trading hours eventually and the decade that IGA and their like enjoyed should have been used to cement a market position that would have been resistant to the eventual ending of this arrangement. Instead, they put their prices up, knowing they had a captive market, and screwed the customer to the point that when the arrangements ended, everybody went straight off to the majors. The answer from every IGA has been to find produce and put it out cheap. Except the quality isn’t there. One IGA I visited really thought that, because they were 99c each, it was perfectly okay to put out the wrinkliest, shrunken and plain rotten rockmelons (cantaloupes)- so rotten were they that the juice had leaked through the display and onto the floor to form a sticky puddle. So you could imagine how difficult it would be to try and push them to go with a premium product whose main feature was that it was a premium product. Another issue, and probably an even greater issue than the retailers, is the growers. I can’t speak to the rest of the world, but there is nobody more obstinate, thick and obtuse than the average West Australian produce grower. For every one grower that I respect for their drive and determination, there are three that are such wankers I cannot be in the same room with them; and a lot more for whom I would cross the road to avoid speaking to. I usually go to the example of the Tasmanian potato farmers whenever I talk about what dickheads growers can be. In the 1990s, Coles tried to get a range of premium potato varieties into their store and approached a group of Tasmanian farmers to set up a pilot programme. After spending a small fortune setting it up, Coles got the big shaft when these farmers signed contracts with a fast food giant to grow ‘chipping’ potatoes. When that giant ended their contracts with the farmers in favour of the Kiwis, they went back to Coles and demanded that it pick up where it had left off a decade before! A similar thing happened to both Coles and Woolworths when they financed opening cabbage and cauliflower farms around Albany in the far south of the state; the growers took the cash and then sold much of their produce on the export markets. Almost every example of something that would ultimately be good for growers that I have had experience with has ultimately been undermined by the growers themselves. The one aspect that most people would think would be a problem is probably the least problematic- the actual customer. One problem that Perfection Fresh has with its supplies is that its pack sizes are too large. 20 trevisio lettuce is probably 12 too many. Having said that, there is demand out there. A lot of unmet demand. It never ceases to amaze me just how popular premium lines are in even the most un-premium stores. Yet, as I have said time and time again, retailers inevitably cater to the lowest common denominator and the whole premium market is left to a select few specialist retailers that absolutely clean up. The irony is that every owner, manager and specialist looks at these premium specialists and marvel at how well they do and then totally miss the entire point when they try to emulate that success. All of this inevitably comes to mind whenever I hear somebody suggesting we ban fast food adverts because of the obesity epidemic. The WA government runs a campaign based on the 5 veg and 2 fruits balanced diet but never really pushes the actual produce itself; as a representative of the entire state it would probably be unethical to single out any one segment. Except, of course, the adverts are so bland that nobody remembers the bloody things so you are left wondering exactly what has been achieved after spending a crap load of money. Why not pick out a few things and actually push those to get people interested in eating fresh rather than hooning down to the local burger joint? When you think about it, having a stir-fry involves more than just buying and preparing a bit of cabbage so pushing cabbage wouldn’t mean the rest of the industry misses out. Plus you could keep the campaign fresh by making new adverts for other lines every year. I was not privy to the initial discussions on the campaign but I would not mind betting that any sort of initiative in this direction was inevitably sunk by the grower groups. The other thing about these promotions is that inevitably include a package of recipes only one of which most people would seriously consider serving up to their families. My favourites, in this regard, are the Potato Marketing Board; they seem to think that most people eat potatoes without meat all the time. A few years back they included a meal planner with a recipe for potatoes every night where potatoes were the major element of the meal- and with no meat. In a country where the average consumer eats their body weight in meat every month, it seems something of an oversight to say the least. I just don’t accept the premise that the only answer to the obesity problem is to ban fast food adverts. It’s not the fault of MacDonald’s or KFC that produce growers and retailers are so locked into their respective paradigms that trying to do something good for them, and the consumer, is simply a waste of time. Just because the fast food companies have their stuff together and can actually get their heads out of their arses long enough to get a viable promotional campaign up does not mean they should be targeted for government censure ultimately because the other side could not collectively find their own arses if you gave them detailed descriptions on how it was done. As an aside- Given the almost genetic weakness of Australian cricket against off-spin bowling, I am constantly surprised by the total lack of respect that off-spin is afforded in this country. Listening to the commentary on the Ashes Series on ABC radio and Channel 9 and Foxtel on the TV, one can be forgiven for thinking that off-spin bowling is the province of the lazy and weak and is not really part of the game. This despite the fact that many of Australia’s most embarrassing moments have come at the hands of the practitioners of this maligned art. Leg-spin, by contrast, is afforded almost holy status and its practitioners lionised, even though we have only had three truly great leg-spinners- the rest would be lucky to get a game in a state side if it weren’t for the mythical status attached to their art. Ian Chappell once said that the key to Australian success over the years has been to pick the best eleven players and then name one of them as captain. Looking over the Australian team at the moment, and especially the spinners, you are left with the conclusion that the objective of having a leg-spinner in the team is very important. A spinner is a good thing to have; does it really matter if they are a leg-spinner? Why not cast the talent net just that little wider and look at the up and coming off spinners? Because, given the bias against off-spinners even at club level, anyone sticking out enough to be considered an up and comer must be at least competent.  In truth is there no beauty? I am not in love; but i am open to persuasion. |
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12/10/2010 6:04 pm |
i wouldn't mind some of your fruit
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12/16/2010 12:31 pm |
let me persuade you then
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