Turners & Growers (T&G) has completed the restructure of its pipfruit business with the appointment of former Apollo Apples MD Bruce Beaton as general manager of New Zealand pipfruit.
Beaton is now reporting to Darren Drury, who was promoted to a global role as executive general manager of pipfruit for the group earlier this year.
Previously, T&G had two pipfruit executives reporting to group CEO Alastair Hulbert, with former GM of pipfruit Tony Motion overseeing supply and Drury managing market sales. But the new structure provides a more streamlined system, while also better equipping the company to manage its global growth aspirations, according to Drury.
“T&G Pipfruit is the internal brand we’re now using to identify the pipfruit business, because it’s about a lot more than Enza these days,” Drury explained. “We have our Delica sales team across Asia, the Apollo brand inside the business and our proprietary varieties that we’re licensing globally.”
“It’s a really big operation now and we have great aspirations to grow the business, not just through licensing varieties but through ramping up our global production.”
New Zealand forms a core part of those plans, where T&G is “well on the way to achieving its growth targets in terms of volume”, according to Drury. In his new role, Beaton is responsible for T&G’s entire New Zealand-based pipfruit operations, particularly the alignment and integration of the business with Apollo Apples, which it acquired (subject to Overseas Investment Office approval) earlier this year.
Drury said Beaton’s great industry knowledge and experience, and the respect he commands in the business, were valuable assets to T&G.
“What we wanted is someone with a presence in one of our main growing regions, namely Hawke’s Bay, because me and my predecessors at T&G have always been based in Auckland,” he said. “The Apollo business has changed dramatically and improved greatly under Bruce’s stewardship and he brings skills across a spectrum of areas. He can bring together good teams of people and develop a well integrated business.”
While Beaton had already committed to stay in the business for at least four years after the T&G/Apollo acquisition was announced, his appointment to the new GM role also signals a longer-term involvement that counters expectations among some industry watchers he might take a back seat in the T&G business following the Apollo sale.
“From a Delica perspective, when we made our transaction with T&G last year, people might have though the same,” said Drury, one of four former Delica shareholders involved in the sale of the business to T&G. “But there is a big and exciting challenge with T&G, and we’re only half way through our journey in turning the business around. In BayWa, we have strong owners who want to support us with sensible growth targets.”
One of the immediate targets for Beaton is to integrate what Drury acknowledges are “two pretty different business cultures” at Apollo and Enza. “A big part of Bruce’s role is to work on how the two businesses can operate side by side and then start to integrate them in terms of efficiencies and so on,” he said. “Bruce has spent the past four or five weeks learning about the Enza business to get his feet under the desk. We need to ensure we are not just putting two businesses together without adding any value.”
Green growth for Envy
While T&G has ambitious expansion targets for its global pipfruit business, with plans to double sales to around 20m cartons by 2020, back in New Zealand Drury said the company is targeting more steady growth. “We want to build up our presence in some of the more commodity varieties again, such as Gala and Pacific Rose,” he said. “We’ve also seen rapid growth in Envy production over the past two seasons and we expect that to continue as growers recognise the value in this variety and the returns it can deliver.”
Envy production is now approaching 650,000 cartons in New Zealand, Drury estimates, and he expects it to increase by around 200,000 cartons in 2015. “We won’t be far off 1m cartons, and we expect volumes to double over the next two or three years, which is not insignificant when you consider the national apple crop is around 17-18m cartons.”
More than half the Envy production coming online is earmarked for Asian markets, to which the variety is ideally suited, according to Drury. But he also singles out the US, where licensed production of Envy is gathering momentum, as another market with excellent potential.
“We’ve had some incredible feedback from US retailers. We have got some major players telling us that Envy is the only new variety they see with significant attributes to differentiate it from other varieties on the market. These retailers want to make Envy the centrepiece of their apple displays but we don’t have the volume to supply them yet.”
While production of Envy is just getting established in the US – at around 200,000 cartons– Drury is confident volumes can be ramped up to 2-3m cartons in the next two to three seasons. “All the signs have been very positive in terms of the way Envy grows in the US, and we are doing a lot to launch the variety to the trade at PMA Fresh Summit in the US this week with billboards prominently positioned on highways around Anaheim.”
Although T&G is also trialling production of Envy in Europe, he said conditions there were proving less conducive. “We are doing a lot of trial work and we’ve found some spots in France, South Tyrol and Spain, but it’s not a simple variety to grow and we won’t grow it unless we’re confident we can get high returns from nearby markets for the growers.”
Tough 2015 in prospect
With the 2014 pipfruit season now more or less over in New Zealand, Drury said it had been another “solid performance, if not as spectacular as 2013”, but he confirmed the industry is steeling itself for a “difficult” 2015 on account of the dramatic shift in global trading conditions.
“A lot of producers are finding their traditional markets can’t pay what they need them to, and they’re seeking new markets,” he observed. “We’re already seeing in places like the Middle East and China producing countries that are new to those markets sending quotes without any understanding of how these markets work and it’s causing some unease. The Russian situation is part of it – it’s not just affecting Europe but other parts of the world like the Middle East and Asia.”
