Wins & woes in food manufacturing: Part One

Earlier this year, Food mag was lucky enough to be invited to South Australia as part of Advantage SA's Premium Food tour. A whirlwind two day tour, we met with a number of hard working, inspirational food and beverage producers and manufacturers in Adelaide, Coffin Bay, Port Lincoln and the incredible Kangaroo Island.

With an international reputation for top quality foods and wine, and growing export opportunities in regions including China, India, the US and South-East Asia, who better to ask about the trials and tribulations of manufacturing than those getting their hands dirty?

Peter Davis, owner Island Beehive, Kangaroo Island

Kangaroo Island is famed as being the only source of the most pure Ligurian bees on Earth, and it is from these bees that Island Beehive produces its renowned organic honey.

As well as producing honey from his own hives, Davis has eight other producers contracted to supply honey with all the packaging and labelling completed on the Kingscote premises, and adhering to the strict guidelines of the National Association for Sustainable Agriculture Australia (NASAA), the brand's organic certifier.

Perhaps the most exciting development in Davis' business in recent times is China's growing interest in his products.

Davis recently sent an order for 10,000 jars of honey to China, which was no easy feat seeing as it all had to be packaged and labelled by hand.

"We couldn't find a packer who was certified to pack organic honey in South Australia at a price that we could actually accept, or that the customers would accept. So we decided to pack it ourselves. Only having a small, hand-packing machine, we packed 10,000 jars for that order, and a week after that order, another Chinese girl said 'I want 6,000 jars plus 2,000 one kilogram units,'" Davis said.

"So we went from having a $30,000 order to having another $40,000 order as well."

Davis sees exporting as the biggest opportunity for his business moving forward, and as such is in the process of installing a mechanical production line to boost productivity and efficiency.

"One of the reasons why we're doing it is to try and guarantee the integrity of the product," he said. "The other reason is that we want to increase employment opportunities locally.

"Throughout February and March, where we would normally have had a downturn in tourism activity, we actually employed all of our girls for extra hours to pack by hand and label all the products.

"But we want to go mechanical because we can see that instead of doing seven tonnes in two months, we might have to do seven tonnes in a couple of weeks, and we just don't have that capacity at this stage."

As excited as he is about Island Beehive extending its reach overseas, actually getting the product off Australian soil is a tedious and frustration process, Davis said.

Despite the rigorous testing involved in receiving organic certification, Davis told Food magazine the exporting process for organic products is much more restrictive than for non-organics. Not only are there a lot of I's to dot and T's to cross, but there's also a lot of confusion between NASAA and the Department of Agriculture, Fisheries and Forestry (DAFF).

"We've been having lots of trouble with the DAFF and NASAA in trying to get the right forms. None of them seem to know which forms you require … It's not a very clear process. It's supposed to be, but it's not.

"We've been trying to export wax into Liguria and we've spent the last two and a half months trying to do the paperwork and we still don't have the right forms, because DAFF doesn't know which ones we need and NASAA doesn't know which ones we need."

Other than an abudance of red tape, other key issues which are causing Davis, and no doubt countless other Australian food manufacturers, grief are the high Aussie dollar and increasing expenses. Put them all together and doing business can be a real chore for companies like Island Beehive, which despite its growing successes overseas is struggling domestically with retail figures stagnant at 2008-09 levels.

"We get ice cream from Streets and the distributor came in this week and said that each week in Adelaide four to five small delis, pizza shops and chicken shops that have ice creams are closing their doors and walking out of their business because they're not getting the turnover. They're not getting people coming through the doors," he said.

Davis can empathise with these struggling business owners, himself frustrated with the seemingly endless expenses associated with operating your own brand.

"The red tape that we have to comply with, the taxes that we're having to pay, the electricity prices and the water prices have all gone up so much that everyone is going broke," he said.

"The government's trying to tell us trade, trade, we need to trade but all they do is make it bloody harder for us."


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