Enza’s Whakatu packhouse manager Simon Taylor, well known in the UK for time spent with Empire World Trade, says the facility was designed to cater for the changed and varying needs of growers. The one-millionth carton went through the lines a fortnight ago, and volumes are creeping up year on year, as growers recognise the benefits of transferring the responsibility for packing fruit to the marketing company.
Fifteen local growers use the facility at this point, but that is likely to extend in years to come. “We are making everything more efficient as we develop,” Taylor says. “And as the systems and processes improve, we are taking more fruit on board. We are having a lot more interaction with the growers, and providing them with the information that can really help their businesses. Overgrading can be a problem in any packhouse and we are very aware of that, and we are able to tell every grower how his fruit is performing as it goes through our lines.
“Growers are gaining confidence in our capabilities, and this season we have had them coming in and complimenting us on our performance, compared with what went before. That is really satisfying for us.”
Keith Page, site manager, says that eight million cartons went through the site in 2001, in the days of Enza Cool, before the dramatic changes brought about by deregulation hit home. Now, 2.5-3 million cartons is the norm.
“The whole dynamic changed, and we have refocused ourselves. We took out three coolstores to convert them to packhouses, and Turners & Growers is committed to developing production in Hawke’s Bay, so over time things will take shape here. We have around 30 hectares of land that could still be developed, but the debate is whether the returns would be better on an investment in this type of service, or in planting new orchards.”
The Whakatu area is in transition, as the meat industry that also gave it vibrancy in the past has gone through some very hard times, but Page believes his site could be part of a conversion of the area in a central food hub for the region. “More ancillary services are already coming to the site,” he says, “and everyone is keen to keep capital costs down, as they realise that there is little point being asset rich if you can’t make a return on those assets.”
The seasonal nature of the business means the site is largely unused from July through to February. “It’s a fact of our business cycle,” says Page. “You can either beat yourself over the head with that or face the reality. We push a large volume through during the season and the growers are very positive about what has happened here. We try very hard to see their side of things, as we are aware of the friction that can exist. By communicating better and giving growers the big picture, we can go a long way to eliminating that.”
A better understanding of the role of the packhouse would serve the industry well,” he adds. “The more unsuitable fruit you stop from going in a bin in the first place, the better you manage your costs. Sending juicing fruit through a packhouse like this is a very expensive way of grading. All we can do is sort, we cannot make the fruit better. Packouts are one of the most mis-used factors in the industry and I think packhouses around the world are unfairly judged on that basis.”
Taylor agrees, but adds: “Growers this season have so far done a fantastic job, and I think grower liaison managers in the orchards are having a big effect on that. That is all part of the connection we make.”
The connection between the two parts of the supply chain is crucial, Page says. “We are an extension of the grower’s business; this is not a revenue stream for Enza, and that needs to be communicated to bring the growers fully on board. We want to reinforce the right perception; that we care.”
GRAY DAYS SPELL BRIGHT NEW HOPE FOR EXPORT GIANT
There is no denying that seven years down the line, the New Zealand industry is still getting used to its deregulated state.
With 250 growers using its services to get their fruit to market, Enza, the company that morphed from the former board, lays claim to around 30 per cent of the top-fruit production volume, and under general manager, Canadian Dawn Gray, it is putting the bricks in place to rebuild its empire, to represent between 50 and 60 per cent.
Gray told New Zealand publication The Orchardist in a recent interview that the results of deregulation were predictable. “In my experience when industries deregulate there is a period of time where this sense of freedom of choice for growers creates euphoria and generally brings importers and marketers from around the world to fuel that euphoria with promises of better net grower returns,” she told the trade monthly. “There is a ‘sorting out’ period, the length of which will be determined by the economic factors driving financial viability in the orchard.”
The introduction of competition into the market, while welcomed by many, has brought about a number of practices that have done the industry a disservice, she says. With just one per cent of the global apple exports in its armoury, the New Zealand industry is “too small to fight”, Gray adds.
She does, however, believe that market forces will help Enza achieve its aims, with 75 major international customers essentially controlling the size and structure of the supply chain. “Big retailers need big suppliers,” she says, adding that the Enza merger with Turners & Growers (T&G) in 2003 was the first step for the company in re-establishing itself as a powerhouse. “Turners & Growers merged with the Enza brand, the physical aspects like cold storage facilities and the packhouse, and are now continuing down the track of vertical integration.
“Those types of assets don’t make a business. What T&G said was, ‘here is an opportunity, a like mindedness in having to reach economies of scale.”
Enza has also embarked on a policy that involves acquiring its own orchards and striking up partnerships with orchardists, as it looks to find the right structure for itself and its growers. “Growers are working on pretty thin margins, and individual companies can’t do what is necessary to stay competitive,” says Gray. “If you have any chinks in your armour when thrown into deregulation, survival becomes more of a challenge. Either you leverage economies for volume or ultimately become a niche player, but there is no room for confusion of identity.”
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