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.
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.”
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.