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Phil O'Keefe - Simplot
"Australian grown has given us another card in the game"One of Australia's largest food processing companies Simplot Australia Pty. Ltd. says being Australian based has given it a significant advantage in the Australian market over the past decade.
General Manager of Agricultural Services Phil O'Keeffe says Simplot Australia Pty. Ltd. is the last frozen food processor in the country, and admits there has been a deliberate strategy to push the Australian grown message, as domestic consumers have a high standard when it comes to food.
"We are a high cost country to produce anything - particularly in the area of labour and now energy," he said. "The only way that we can (make a profit) as a growing community is to increase our productivity. So we focus heavily on getting better varieties that give us better yields in the field and maintain quality in the consumer’s eyes. For us, this Australian grown has given us another card in the game, so when you sit down with the major supermarkets and QSR customers, you've not only got to put your cost card on the table and quality, but also the Australian grown card on the table - which gives us a really good stake in the game."
Most of the vegetables are grown in Tasmania
Mr O'Keeffe says these deals with major national corporations have allowed it to significantly increase its own production, by more than 100 per cent.
"For this particular plant (in Devonport), six or seven years ago we were doing 40,000 tonnes of vegetables and this year we will do 80,000 tonnes," he said. "That is a result of getting all of the major private label frozen vegetable business, and increasing circulation. We have done a deal with Coles where we are the only branded frozen vegetable supplier into Coles. So we've not only got their private label, but our Birds Eye brand is in there as well. That's been the case for two years now and we've got an eight year deal with them."
Simplot are a global company, with separate operations in America, Canada, Mexico and China. In Australia its frozen vegetable production focuses 70 per cent into the retail market, with 30 into food service, while it is the reverse for potatoes with 75 into food service and 25 into retail. The company spends $35million at the farm gate for vegetables and $90million on potatoes.
Tasmania’s vegetable harvest season tends to be through the summer and autumn months, with broccoli and cauliflower spanning into winter, and Simplot cease production between September and November when supply drops off. It has growing regions right down the east coast, with sweet corn and green beans in Gatton in Southern Queensland, sweet corn and cabbage in Central West New South Wales and peas, beans, potato, carrots, broccoli, cauliflower, Brussel sprouts and onions in Tasmania, which Simplot says has an ideal climate for vegetable production.
"Most of the fresh vegetables, if you look at it from where they come from, they are either close to the major centres such as Sydney, Melbourne, Brisbane or they are coming from areas such as North Queensland in the winter time" Mr O'Keeffe said. "Australians are happy to have some seasonal supply. They are happy to realise mangoes are seasonal and do without them for a few months, but not things such as green beans and sweet corn and things like that."
Phil Pyke - FGT, Ian Locke - Tasmanian Fruit & Vegetable Export Facilitation Group, Phil O'Keefe - General Manager of Agricultural Services, Simplot and David Addison - Charlton Farm Produce
One of Simplot's biggest success stories is the introduction of their brassica farming model.
"We were importing almost all of our brassica, that is cauliflower and broccoli because we were just too uncompetitive buying from contract growers," Mr O'Keeffe said. "Then we pushed that into our farming model, and started off with a small volume about six to eight years ago, of about 500 tonnes and this year we will harvest about 10,000 tonnes in our own operations. That's moved all of that volume out of import and into Australian grown - and we are very competitive now."
But it has not always been smooth sailing, with Mr O'Keeffe saying that poor trading conditions in the early 2000’s forced the company in 2012 to review its vegetable business.
"That pushed our volumes down," he said. "We nearly made the decision to close our vegetable business because it was under performing at something like two per cent, and one plant was actually negative. Then we got Coles on board and our volumes nationally have reached 120,000 tonnes."
David Addison from Charlton Farm Produce is one of the contract growers for Simplot. He has two businesses, growing and exporting onions as well as growing other vegetables and potatoes. He says the issue of irrigation in Tasmania is constantly improving and allowing farmers like himself to become more successful.
"We were a recipient of the first irrigation scheme that got up and running, around five years ago and that has made a huge difference to our water security since we were short of water," Mr Addison said. "It has revolutionised what we do on the farm. We were already investing in new technology and equipment. Now we are needing to manage the soil a lot more than we used to. But just to be able to grow your own crop and water them and be successful has been a big change.”
Mr O'Keeffe has been at the company for over 40 years and agrees that improvements to irrigation management is the biggest change that he has seen in his time in the industry, recognising that Tasmania's geographical isolation from the mainland means they need to be flexible and self-sufficient.
"As everybody knows the single biggest productivity improvement on your farm is to irrigate it," he said. "In the past, decisions at this time of year were critical about what do you do with the crops in the ground; do you keep watering them or sacrifice them for higher value crop that you might want to plant in a months’ time. Those decisions don't have to be made now, as there is enough water. Yields have gone up, reliability has increased, and capability has increased."
He adds that Australia has a tendency to overproduce and an export council has been established to identify ways to get extra production to those who need it.
"Tasmania has a capacity to grow more than what's needed," Mr O'Keeffe said. "We grow 20,000 tonnes of peas, we could easily grow 40,000. We grow 290,000 tonnes of potatoes and McCain are doing 100,000. So our (goal of) 500,000 needs more land and irrigation development now."
For more information:
Simplot Australia Pty. Ltd
Tel: +61 3 6422 6550
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