Kiwi dessert manufacturer in the belly of the beast
A small Timaru-based food manufacturer is a big hit with global retailer Costco Wholesale.
Denheath Desserts is selling millions of its “iconic” custard squares in the retailer’s stores, displaying the Southern Alps flanked by pristine dairy country on its packaging in Australasia and previously Asia.
“My mother had told me she wanted us to take the custard square recipe and make Denheath a New Zealand household brand as well as selling internationally,” explained Lisa Templeton, coowner of the business with her husband Donald.
Now, she says, the twogeneration family-owned manufacturer has sold its creamy iced delights in more than 53 Costco outlets in NZ, Australia, Korea and Japan. It pulled out of Asia after communications broke down during Covid when it had to upgrade to meet dairy export standards.
But it is now one of a few manufacturers in NZ that have a dairy risk management plan which allows it to go back into the market and access all countries.
At Costco Westgate, a 1.5kg pack of 10 custard squares sells for $29.99.
Each square is individually wrapped and weighs 150g — a bitesize delight which Seven Sharp cohost Hilary Barry took some time to master back in 2019 when she helped make, then eat those sweet squares.
“They can make 15,000 custard squares every day,” Barry told viewers from the bakery.
Lisa Templeton is a little more circumspect about disclosing volumes manufactured and sold, particularly when it comes to Costco.
But Denheath Desserts’ Timaru yard has a number of containers side by side, indicating an extremely high-volume export business.
The Templetons might make tiny desserts, but they sure make a lot of them.
It’s one of the great Kiwi success stories. In 2019 when Costco Wholesale Westgate was being planned, managing director of Australia and New Zealand Patrick Noone said the chain wanted to buy and distribute more New Zealand goods to its 94 million member shoppers and many NZ-made goods are prominent at Westgate.
Templeton says Denheath was “lucky” in 2013 to forge into Costco Australia when the Americanheadquartered giant had only a few stores across the Tasman and was yet to open here.
The Templetons learned how the influential chain was planning to promote NZ food products on a roadshow via NZ Trade & Enterprise, she recalled. So they approached Costco, asking if it might be interested in selling Denheath Desserts.
The relationship flourished from there, to the point that the Timaru manufacturing base needed upgrading to meet the Ministry for Primary Industries’ dairy product export manufacturing standards.
All went so well that the Timaruvians were soon distributing container-loads of their squares through Australasia and Asia. But the story just gets better. “When Costco was coming to New Zealand, the new buyer for Australia and New Zealand remembered us and she asked us to go up to Auckland for a cup of coffee. So we did,” she recalls.
And the relationship has grown ever since.
Asked what difference the Costco supply agreements had made to Denheath, musician and co-owner Donald Templeton said: “The most encouraging thing about it is that we now have an international market for a product that started in a small rural township. We’ve grown and the future prospects look even brighter.”
Denheath says its squares are “as Kiwi as alpine ranges, glacierfed lakes and little men with hairy feet”. They also make profiteroles and cheesecakes. As for the name, it came from Denheath House — a country cafe at the old post office in sleepy little Pleasant Point, South Canterbury.
That was the birthplace of the uniquely different, light and fluffy “Denheath Custard Square”.
The original owners of the cafe where the squares were sold were Dennis Knight and his potter wife Heather, hence the name Denheath. Lisa Templeton’s mother Carol thought Denheath House was worth buying for Heather Knight’s custard square.
“If we were corporate enough ever to write a mission statement, achieving my mother’s dream would be it,” Lisa Templeton says.