Thomas Foods links exporting and innovation

Prosperous export businesses don’t succeed by chance. Thomas Foods International has grown to become Australia’s third largest meat producer – and the sector’s largest family owned business – with an annual turnover of about $1.3 billion.

CEO Darren Thomas says this is the result of 40 years’ work in international markets, built around a strong but highly flexible business strategy.

“The goal is not just about establishing export trade, but thinking about the market you are going into, and the relevance of your product in that market,” Darren told a full auditorium at a recent Brand South Australia I Choose SA industry briefing on the trade and investment sector.

Implementing this idea means examining the numbers to understand precisely what your product means to a global market, and this has prompted Thomas Foods to move far beyond its original business of meat processing and distribution.

Thomas Foods’ original business was in meat processing and distribution.

“Australia cannot feed the world,” says Darren.

“We can produce enough food to feed about 60 million people, and the markets we are already exporting to have a population of three billion people, so therefore we are always going to be a boutique producer, no matter how much the company grows in size and reach.

“This understanding was behind our very first decision, which was to concentrate on premium products.”

Darren says a key to export success, which now represents about 80% of Thomas Foods International’s business, has been through investing directly in markets where Thomas Foods International is trading.

It has built infrastructure and distribution hubs in the US, entered business partnerships with foreign companies and purchased several others to establish a solid beachhead in 85 key international markets – from Dubai and Cairo, to South America, Shanghai and Tokyo.

Recently Thomas Foods International purchased a company in the Netherlands, which had been a long-term customer, strengthening the company’s position in Europe.

“If you want to succeed in other countries, you have to get closer to the customer – there is no other way,” says Darren.

The expansion of Thomas Foods International also signals that progress depends on being reactive to what happens in the market, rather than staying fixated on your existing products.

With this in mind, Darren says he is aware that selling traditional boxes of meat will eventually be phased out altogether, which is why Thomas Foods International is a keen and active participant in emerging e-commerce technology and marketing strategies.

“You have to keep asking yourself how you remain relevant,” says Darren. “It’s crucial to keep abreast of technological changes in your sector, to know what your opposition is doing in the same competitive space, and to understand what your customer’s customer wants.

“We need to read and understand consumer habits and preferences, to embrace change in the marketplace as it happens.”

This has seen the company expand to include food retail label Thomas Farms, meat wholesaler Holco, ready-to-cook meal business Thomas Farms Kitchen, and sustainable seafood export business Thomas Cappo Seafoods, a collaboration with Cappo Seafood.

Some of these businesses have taken off internationally in ways that don’t happen in Australia – such as surging US popularity in prepared meals.

Thomas Foods Fresh Produce is Australian owned and Australian grown.

This underlines the need for an expansive exporting company to have separate businesses that can react swiftly to how customers evolve and buying trends erupt in different markets.

Darren has noticed that leading global tech companies dominating the retail sector – Alibaba and Amazon – are now investing in new-style bricks and mortar retail shops that have hi-tech purchasing models, with the first checkout-free Amazon Go shop now operating in Seattle.

This has inspired the company to trial new food packaging and marketing ideas in South Australia first. Eight months ago, Thomas Foods combined with Tony and Mark’s grocery stores and Uber Eats to introduce the world’s first home-delivered fresh food packs, providing ingredients for chef-designed, ready-to-cook meals via a phone or online instant delivery service.

It’s an innovation that Darren believes will soon find traction in the international market, and therefore give his company a competitive advantage.

“It’s a snapshot of opportunities that can exist,” he says, “so it’s important to get out and have a go.”

Such progress is a powerful positive statement from a company that was hit by an unexpected disaster when a fire destroyed its Murray Bridge abattoir and meat processing works in January 2018.

The company has underlined its firm commitment to rebuild in Murray Bridge, and is looking to invest in next-generation technology to improve cost-effectiveness and efficiency.

Darren says that taking this approach reinforces that Adelaide will always be home base for the company.

“There need to be improvements – especially for governments to knock down existing trade barriers if we are going to grow further – but we have a strong platform in SA to build a strong export business on,” says Darren.

“We are very confident of the future. I believe we can afford to be bullish in our business forecasts.”

Industry in focus: Trade and Investment

Throughout the months of January and February, the state’s trade and investment industry will be explored as part of I Choose SA.

South Australia is in a prime position for trade and investment opportunities as we have a 24-hour connection to international markets and a prime reputation for our premium products and services.  Read more trade and investment stories here.

Visit I Choose SA to meet the people building business and industry in SA, and to find out how your choices make a difference to our state.

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Ugly veggies live it up with perfect puree and tasty vodka

Blind tastings to find the perfect potato vodka are revealing left over starch from making potato crisps is the choice ingredient for a top drop.

In fact, the starch cake sourced from PepsiCo’s Adelaide crisp factory is proving so good that Adelaide Hills Distillery is now working towards launching its unique new vodka in January.

“We’re creating a vodka with flavour that’s mindfully sourced and sustainably made,” Potatoes South Australia CEO Robbie Davis says.

It was Ms Davis’s peak industry body that began work on creating the unusual new vodka with Adelaide Hills Distillery and the University of Adelaide last year.

They won a $30,000 grant from the former Labor State Government with the idea of finding new ways to use potato waste, and soon began trials using potato peel, the starch cake left over after making crisps and potato water.

Potatoes SA CEO Robbie Davis. Photo: PIRSA.

“This is a vodka that tells a story,” Robbie says.

“This has a taste to it, it’s slightly earthy, and that’s what is unique; it has some flavour.”

The boutique spirit is a successful research and development project undertaken by the forward-thinking industry body that represents the state’s largest horticulture industry.

SA produces 80% of the nation’s fresh washed potatoes and Robbie is leading the charge to find fresh ways to slash the corresponding waste.

In 2016, she travelled to Europe to see how different countries were trying to reduce pre-farm gate food waste after being named the state’s Rural Woman of the Year.

Now, she is also a director on the new $133 million Fight Food Waste Cooperative Research Centre based at Adelaide’s Waite Institute that is targeting food waste and has 57 participants around Australia and overseas.

Who knew the humble potato could be so versatile!

She is also committed to another Potatoes SA project well underway with the university – this one focusing on scientifically creating a long-lasting, high-quality puree that ensures more “ugly potatoes” meet a more useful end.

At the moment, shoppers demanding perfect potatoes in supermarkets are forcing primary producers to bin up to 40% of produce.

This project takes on the ugly ducklings and purees them, skin and all.

“What we’ve perfected is a puree which is pure potato and some water with no added colour or preservatives and it will last a year if it’s chilled and has a shelf life of six months,” Robbie says.

“(Famed cook) Maggie Beer has bought the product and is very happy with it and has been using it in some of her products through the farm shop in the Barossa Valley.”

It has enormous export potential along with use in nursing homes and hospitals or in the baby or toddler food market.

Robbie says the university has been using it to make gnocchi, sorbet and meat pies as well as a gluten-free ingredient in bread and crackers.

A new company established by the association called Puree Australia is currently working out the best way to get the product to market so the industry can use more of the estimated 80,000 tonnes of potatoes that don’t make it into supermarkets each year.

Ugly potatoes are made into puree that’s used to make sorbet, gnocchi and meat pies.

It’s also triggered another collaborative research project with the University of Adelaide to develop nutrient dense foods for ageing South Australians.

Together with Test Kitchen SA, dietician Joyce Gibson, Obela Fresh Dips and Spreads and Thomas Farms Kitchen, the goal is to use the puree to develop a range of 10 nutrient-enriched, sophisticated and fun lifestyle-driven food products for ageing South Australians.

They include easy-to-swallow sauces, gravies, dips, spreads, desserts and smoothies with Robbie saying the work would look at ensuring older people can eat foods that satisfy their increasing need for protein.

“We want to see food in nursing homes, hospitals and residential villages that is beautiful, tastes yummy, has health claims and that isn’t stodge,” Robbie says.

She passionately believes SA’s economic future is tied to this kind of work, in producing food sustainably, innovatively and competitively.

That’s partly why the association is a Friend of Champions 12.3, a United Nations General Assembly working to halve waste by 2030 and reduce food loss along the value chain.

This month, those working to make that happen come together to celebrate all that is potato at the industry’s annual dinner at the National Wine Centre.

Among them will be some of the industry’s heavy hitters, The Mitolo Group, Zerella Fresh-Parilla Premium and Thomas Foods International Fresh Produce, with one of the key elements of the night – the auction of new season baby potatoes.

Last year, the 10kg lot sold for $10,250 with proceeds going to the Little Heroes Association, and Robbie hopes for an even larger bid this year.

“We’re always looking for more,” she adds.

Industry in focus: Agribusiness

Throughout the month of October, the state’s agribusiness industry will be under the magnifying glass as part of I Choose SA.

South Australian farmers, producers, agricultural researchers and biosecurity workers are the lifeblood of our country communities and are big players in the state’s overall economic welfare. Read more stories here.

Visit I Choose SA to meet the people building business and industry in SA, and to find out how your choices make a difference to our state.

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Theo’s theory on the success of SA’s spuds and onions

High-tech innovations and a two-fold business growth in 18 months.

It’s been a big past few years for Australia’s leading potato and onion packer, The Mitolo Group, and according to Theo Sasopoulos, it’s still all systems go in the world of spuds and onions.

Theo is the group finance manager for the longstanding family-owned company that built its fortunes on growing, harvesting and packing potatoes and onions.

An accountant by profession, Theo says he’s working in the best of both worlds – finance and food.

“The SA food industry is a key growth area for our economy, especially in the Northern Adelaide Plains (Virginia and surrounds) and traditional food bowl areas like the Riverland and Mallee,” he says.

“As our economy has moved away from traditional manufacturing businesses, food and agriculture along with many renewable (energy) type industries will be at the forefront of economic growth in the future.

“There is no better time to be involved in the food industry or with a business such as Mitolo.”

Shop at any of the supermarket giants for spuds and onions and chances are you’ll be buying Mitolo produce, grown on farms located across the Adelaide Plains, and Murray and Mallee.

Every year, 200,000 tonnes of washed and brushed potatoes and onions are graded and packed at Mitolo’s Virginia base and packing facilities in NSW.

Theo Sasopoulos is an I Choose SA for Food, Wine and Tourism ambassador.

The majority of produce is trucked within Australia to Coles, Woolworths, Aldi and IGA supermarkets, greengrocers, and produce markets throughout the country.

Only 5% of produce (mostly onions) is exported to Europe and the Middle East.

Theo joined the Mitolo team almost six years ago after working at Adelaide consulting firm Deloitte for three years.

“I already had a relationship with The Mitolo Group as a client through my time at Deloitte,” he says.

“The variety and opportunities that come with working in a passionate family business is both inspiring and rewarding from a personal perspective.”

The Mitolo Group has come a long way since it was launched as Comit Farm Produce in 1989 by Bruno and Angela Mitolo.

Bruno immigrated to Australia with his parents at the age of 13, while Angela was born in Australia to immigrant parents.

The couple has three sons, Frank, John and Darren, who now run the business.

“When Bruno was in charge of the place, it was all about hard work and determination,” Theo says.

“Now with Frank it’s about building on that with professionalism and innovation.

“They (the three sons) have taken a good business with strong foundations and made it great.”

Some of The Mitolo Group’s latest successes include the acquisition of large vegetable supplier Oakville Produce, which went into receivership in mid-2016.

“We’ve doubled in size in the last year and a half – we now have 750 staff across our farming, packing and administration,” Theo says.

“From a production point of view we’ve doubled the amount of produce we dispatch throughout the country.

“Similarly, both costs and revenues have increased substantially.”

Also in 2016, The Mitolo Group invested $5m in near-infrared sorting technology to X-ray onions at a rate of more than 1000 per minute.

The X-ray process detects onions that are damaged or rotten on the inside.

Despite the successes, Theo says working in agribusiness comes with its challenges.

“There are so many variables that can change from one day to the next because the weather conditions have such a big impact on the quality and yield of potatoes and produce in general,” he says.

The father of two says he’s proud to be able to pursue his career within a prosperous industry while calling SA home.

“I am a born and bred South Aussie with a proud Greek heritage,” he says.

“This will always be home.”

Visit the I Choose SA for Industry website to read more stories about key industry leaders, why they’ve chosen SA as a base and how the state is enabling them to succeed.

Crusta juice plant back in Riverland hands

The Crusta Fruit Juices site at Ramco in the Riverland is back in the hands of a local family who say the reacquisition of the facility is good news for local citrus growers.

Lochert Bros. Pty Ltd sold the plant to drinks giant Coca Cola Amatil in 2004, but has now “seized the opportunity” to buy it back for the “benefit of the Riverland and South Australia”.

The site is located opposite Lochert Bros.’ existing orange packing facility and is the only Riverland based processing plant able to hold large volumes of citrus for storage and distribution.

While the sale included the land, buildings and all juicing and storage facilities, it doesn’t include the Crusta brand name or company.

The former Crusta site adjacent to Lochert Bros.’ existing packing house at Ramco, near Waikerie.

The first batch of oranges are already rolling along the production line to be juiced for two juicing companies, one in SA and the other in NSW.

Lochert Bros.’ founding managing director Robert Lochert says the company has no plans to launch its own line of juice or bring back the Crusta name.

“But there has certainly been a lot of community support and people saying they would love to have Crusta juice back in the marketplace,” he says.

“But at this stage it’s not part of the plan, we can’t reinvent history.”

The company says in a statement on its Facebook page that demand for quality oranges will increase due to China’s acceptance of South Australia’s fruit fly free status.

“This will enable Lochert Bros. to pay higher prices for oranges exported to China in 2018,” the statement says.

“Lochert Bros. will be talking to growers about additional supplies of both navel and Valencia Oranges for 2018 and beyond.”

Robert says the feedback from the community has been positive and that the prosperity of local growers is of high importance to the company.

“It’s always been a part of our philosophy that we look after growers because if there are no oranges growing, then we don’t have a business,” he says.

Lochert Bros. staff Shawn Wood, left, Peter Kuchel, James Lochert, Lochert Bros. owner Robert Lochert, factory manager Timothy Lochert, and Mel Brisco.

Robert has been packing citrus since 1961, before the Crusta brand was established a decade later in 1971.

His father was also a Riverland citrus packer, starting out in the business in the early 1940s.

“We have always taken fruit from the Riverland, mostly from around Waikerie,” Robert says.

“Of the fruit that we pack, the majority is exported overseas … we have been involved in exports for 30-40 years.

“We supply markets in Singapore, Malaysia, The Philippines, China and Japan.”

Lochert Bros. Pty Ltd packs about 20,000 tonnes of fruit a year.

Three new staff have been employed at the Crusta site and Robert says additional work will be on offer to Lochert Bros.’ casual and part time workers.

“I hope to build the business up,” he says.

Watch below: the first oranges in close to a year enter the former Crusta juice factory. SOURCE: Lochert Bros. Facebook.

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Visit I Choose SA to find out how you can support our state by choosing South Australian businesses, products and services.

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