UP FOR THE CHAL­LENGE

2013 was an ex­tremely pos­i­tive year for ex­porter com­pany oob; but fast growth comes with its own unique set of chal­lenges. Co-owner Robert Au­ton shares the gains and some pains.

Exporter - - CONTENTS - By Glenn Baker.

2013 was an ex­tremely pos­i­tive year for or­ganic berry ex­porter oob; but fast growth comes with its own unique set of chal­lenges. Co-owner Robert Au­ton shares the gains and some pains.

In 2002 Robert and Shannon Au­ton be­gan a fam­ily busi­ness with the goal of pro­vid­ing a prod­uct with a unique point of dif­fer­ence. Both hav­ing come from cor­po­rate back­grounds, their ini­tial de­sire was to make, grow or man­u­fac­ture some­thing tan­gi­ble.

That ‘some­thing tan­gi­ble’ is to­day a range of or­ganic fresh and frozen blue­ber­ries and straw­ber­ries pro­duced at their Omaha fac­tory north of Auck­land for do­mes­tic and ex­port mar­kets – as well as a se­lec­tion of or­ganic ice cream, sor­bet and juice. So why or­ganic? And why blue­ber­ries? Ten years ago blue­ber­ries were a com­mod­ity grow­ing in pop­u­lar­ity and had global ap­peal, re­calls Robert. And al­though de­mand for ‘or­ganic cer­ti­fied’ prod­uct was a lot less back then than to­day, there has since been an in­creased fo­cus on health­ier food op­tions and or­ganic prod­ucts – so their tim­ing on en­ter­ing the mar­ket proved to be bang on.

“Es­sen­tially we started as an or­chard grow­ing blue­ber­ries, but our fo­cus turned to value added prod­ucts early on,” says Robert. “In 2003 we of­fered an or­ganic range of frozen blue­ber­ries into New Zealand su­per­mar­kets, and that mar­ket has grown sig­nif­i­cantly. We now ex­port to Wool­worths in Aus­tralia, and a few Asian des­ti­na­tions.”

Robert says se­cur­ing busi­ness in a large su­per­mar­ket is un­der­stand­ably cause for great cel­e­bra­tion. How­ever, as most F&B ex­port com­pa­nies will know, in such a com­pet­i­tive mar­ket­place there is a con­tin­u­ous chal­lenge to main­tain that mo­men­tum and en­sure that your brand is ac­cepted in a sus­tain­able way.

“That re­quires a lot of ef­fort and it is a big chal­lenge,” he says, adding that he and Shannon gain the most sat­is­fac­tion from re­flect­ing on oob’s growth and any suc­cess­ful out­comes – al­beit some time af­ter the ini­tial deal has been made.

Ob­vi­ously they’re do­ing some­thing right, be­cause in 2013 not only did oob win two cat­e­gories in the West­pac Auck­land North Busi­ness Awards, the com­pany also won the Fastest Grow­ing Ex­porter award for Auck­land and the Up­per North Is­land in the Deloittes Fast 50 pro­gramme.

Robert says win­ning the West­pac Awards was wel­come con­fir­ma­tion that they were “do­ing OK” in the eyes of the judges. “It also meant that we do­ing pretty well com­pared to other businesses, so this af­fir­ma­tion was great to re­ceive,” he says. “It was a good boost for the cul­ture of our com­pany too; the staff were able to see the re­wards for their ef­forts had had an im­pact on the frame­work of the busi­ness – not be­ing mea­sured on sales or prof­itabil­ity, but mea­sured on our strat­egy, plan­ning and sys­tems.”

The Fast 50 rank­ing took the Au­tons by sur­prise; they didn’t think they’d been do­ing any­thing that un­usual. “We knew we had good growth, how­ever it did come off a low base, and ser­vic­ing over 800 stores is quite a big jump from just ser­vic­ing New Zealand su­per­mar­kets,” he con­cedes.

The ex­port story

Oob has been a ex­porter from day one. Fresh blue­ber­ries were top of the list. At one time they ex­ported to the US – to­day they still send them to the Mid­dle East and Sin­ga­pore. But ex­port vol­umes of fresh blue­ber­ries are un­likely to grow much fur­ther due to in­creased lo­cal de­mand.

“Our goal was al­ways to ex­port, es­pe­cially the ice cream we are cur­rently man­u­fac­tur­ing,” says Robert. “New Zealand was al­ways go­ing to be too small a mar­ket for pre­mium ice cream, and in­ter­na­tional de­mand for New Zealand dairy prod­ucts has been strong.

“In­ter­na­tion­ally, or­ganic prod­ucts are grow­ing in de­mand, how­ever we be­lieve there is plenty of scope for much more growth in this sec­tor.

“Cur­rently most of our ex­ports are sea freight to Aus­tralia, al­though we are work­ing on some op­por­tu­ni­ties into China,” he says. “Per­haps the big­gest chal­lenge there is be­ing no­ticed, and be­ing con­sid­ered as a po­ten­tial sup­plier of a qual­ity prod­uct and hav­ing the ca­pa­bil­ity to pro­duce the re­quired vol­ume.”

Over­com­ing con­stant chal­lenges is all part and par­cel of ex­port­ing, and as

Robert points out “if it can go wrong it usu­ally does”.

“Ship­ping is gen­er­ally very re­li­able, but as soon as hu­mans get in­volved, there al­ways seems to be a hold-up which im­pacts on our busi­ness,” he says. “We see our­selves as a ‘just in time’ busi­ness; man­u­fac­tur­ing, pack­ing and de­liv­er­ing at short no­tice. High in­ven­tory can sti­fle a busi­ness’s cash­flow, so we try to be as ef­fi­cient as we can.”

Robert says they’ve ex­pe­ri­enced large de­lays at var­i­ous ports while clear­ing con­tain­ers over the Christ­mas pe­riod, “so we’ve learnt a les­son this year to en­sure stock lev­els can cover this pe­riod.

“We couldn’t pre­dict the high tem­per­a­tures in Vic­to­ria ei­ther which also closed ports due to un­safe work­ing con­di­tions; or the crane that fell over in New South Wales, killing a port worker and clos­ing the ter­mi­nal. All these things have a big im­pact and are out of our con­trol. “Su­per­mar­kets don’t want empty shelves ei­ther, so we have to work hard to deliver on time.”

Robert is some­what philo­soph­i­cal about man­ag­ing an ex­port busi­ness. He ad­mits the past 12 months have been drain­ing emo­tion­ally and that con­verts to phys­i­cal tired­ness as well. But he’s driven by the con­tin­ued or­ganic growth (of the busi­ness). “And the pe­ri­ods when de­liv­er­ies are all made on time. But we know around the cor­ner there may be an­other ‘missed de­liv­ery’ or an­other sup­plier who lets you down on a ser­vice is­sue.

“Whilst we are a ver­ti­cally in­te­grated com­pany do­mes­ti­cally, we have lit­tle con­trol over dis­tri­bu­tion in ex­port mar­kets, so it is im­por­tant to de­velop sound work­ing re­la­tion­ships.”

Fur­ther chal­lenges

As the busi­ness grows and people start to no­tice you, sup­port seems to find you, says Robert. “We’ve been well served by ATEED (Auck­land Tourism, Events and Eco­nomic De­vel­op­ment) and NZTE is be­gin­ning to be of as­sis­tance. We are par­tic­i­pat­ing in a food trade show in Sin­ga­pore in a few months un­der the NZTE ban­ner, which we hope will open up fur­ther op­por­tu­ni­ties.”

Robert and Shannon are con­scious of the need to draw on the ex­pe­ri­ence of oth­ers when it comes to mak­ing ex­port de­ci­sions too. “Shannon and I can con­vince each other of a good idea, so we have just formed an ad­vi­sory board with a strict man­date to test us and chal­lenge us on all our de­ci­sions,” says Robert. “We are also work­ing with New Zealand ex­port specialist CHINZ, which has of­fices in China, to de­velop a mar­ket there for our ice cream.

“But it is early days. Much reg­u­la­tory work has to be over­come in or­der to com­bat the mine­field of po­ten­tial is­sues that face ex­porters into what is now re­garded as the largest mar­ket in the world.

“This is a very large chal­lenge, but one well worth pur­su­ing.”

Glenn Baker is edi­tor of Ex­porter.

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