|
All Producers Need
Alliances
This article was written by Sandra Taylor and
published in the June issue of Country-Wide
southern edition. Neil McCliskie recently
spoke at the Being Green and in the Black: Wealth
from Wild Oats seminar
Nelson apple grower Neil McCliskie
believes all producers need to form alliances
no matter what industry they are in, all the
way along the supply
chain.
Nelson apple grower Neil McCliskie is
pragmatic about the state of his
industry.
He admits the industry is not at the top of
its game, and needs to break the commodity
cycle and become more consumer-focused in
order to grow.
As well as being an orchardist McCliskie is a
director of Heartland fruit, which exports
apples around the world, chairman of Yummy
brand apples, which sells apples through New
Word supermarkets throughout the South Island
and director of Fruit Logistics, a fruit
storage company.
McCliskie knows too well the frustration felt
by consumers who are continually disappointed
with the apples they are buying on the local
market.
The reason for this is that most of the apples
supplied to the local market are the ones
orchardists don’t want to export. In other
words they are second grade apples, and this,
according to McCliskie is not good
enough.
“The consumer must be our focus because this
is where the power is.”
He believes the industry has to stop being
production-led and develop strategies to
regain volume.
“We now have logistics-focused fruit not
fruit-focused logistics.”
Looking at the local market in the South
Island there are two major supermarket chains
and sales outside of these supermarkets is
estimated to be less than 10% of the
market.
While this provides an opportunity for the
small niche farmer, the bulk of apple growers
have to find ways to make the supermarkets
work to their advantage, or in McCliskie’s
words they need to leverage the
stranglehold.
He says apple growers need to control their
own destiny.
Consumers are our friends and the supermarket
our leverage. Even with disastrous returns
from exports last year growers are still being
production-led.
On the worldwide market, China poses the
biggest threat to this country’s apple
growers. By 2010 it is estimated China will
produce 40% of the world production, up from
8% in 1980.
China is now producing 35% of world
production; more than enough to feed
themselves, while the rest of the developed
world produces 47% of the world’s
apples.
While this doesn’t rue well for the future,
McCliskie says the developed world still has
the power in the world apple market because
this is where the hungriest and wealthiest
consumers live.
McCliskie believes this country’s producers
tend to have a national focus rather than
working internationally, and they don’t listen
to what consumers want.
“As producers we think about ourselves. If
there is rubbish in the market what do we do —
throw more rubbish at it.”
Worldwide apple consumption has trended
downward in recent years as it competes
against other fruit in the world fruit bowl
and because, put simply, apples often taste
bad.
Apples also have to compete against the
enormous snack food industry, and the equally
enormous sum of promotional dollars spent on
this industry.
Looking at the demographics of apple
consumers, McCliskie says its not looking
good.
Wealthy baby-boomers are not buying apples in
any great volume and their children have left
home, while their children are growing up with
little knowledge or history of healthy food
and no food brand loyalty.
“It’s not looking good.”
McCliskie says as an industry they need to
segment the market and look at the easiest
consumers to regain.
He believes the greatest opportunity lies in
the health and well-being industry.
“There are huge opportunities for our business
and despite this the apple industry fails
spectacularly in this area.”
The industry does not have a co-ordinated
approach in promoting the health-giving
properties apples possess.
Despite all the signals apple growers tend to
ignore the fundamental problems and simply
look for a new variety to provide the
answers.
McCliskie says even when new varieties are
created growers continue to grow the old
varieties despite consumers telling them they
don’t like them.
In the western world the majority of produce
is sold through supermarkets. In the UK
supermarkets sell 90% of the produce sold,
while in the US this figure is 80%.
Even in Thailand supermarkets sell 25% of the
produce consumed and this figure is expected
to grow.
Supermarkets in the UK and US are huge and
wield huge power making the most powerful man
in the apple industry the Wal-Mart apple
buyer.
“What drives him- it is appearance and
profit.”
“We don’t know who eats our fruit so we must
work with these buyers and make them our
friends.”
This is essentially what McCliskie and his
fellow directors have done with their Yummy
brand of apples.
They wanted to sell grade one apples to the
New Zealand public so they approached the
Foodstuffs supermarket chain.
Foodstuffs helped provide a focus in some
stores and showed that their consumers liked
top quality apples.
Yummy now supply 43 New World
supermarkets.
McCliskie says every year they deal with
Foodstuffs, the more committed they all
become.
“We have earned our stripes to tell our story,
the next stage is to tell our story to the
consumers.”
“ Let’s leverage the power consumers
have”.
He believes this local market experience is a
talisman for what the industry can do in the
export sector.
Yummy have been running an apple promotion in
North island schools where children collect
the stickers off Yummy apples enabling schools
to receive sports gear from Rebel
Sports.
McCliskie says the industry needs to start
thinking about branding.
“If our focus is on production we are not even
going to consider these things, we have to
think outside the square.”
“We’ve got a story to tell but we just don’t
bother to tell it.”
He reiterates that the industry has to make
friends with the buyers and understand what
drives the buyer. Quality is a given and must
be delivered consistently. Growers need to
grow apples that meet consumer’s
expectations.
“Collaborate and work with anybody and
everybody who can help you.”
McCliskie believes all producers need to form
alliances no matter what industry they are
in.
Alliances are needed all the way along the
supply chain to effectively market apples to
the consumer, and to undertake consumer
research and promotion.
|