Helen Twose 's Opinion

Personal finance and KiwiSaver columnist at the NZ Herald

Success: New owner revives food brand

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Graeme Laurence says Pitango wants to be a $50m company, and Asian markets are the key. Photo / Dean Purcell
Graeme Laurence says Pitango wants to be a $50m company, and Asian markets are the key. Photo / Dean Purcell

As summer fades to winter, Graeme Laurence already has his mind on 2015. Like a fashion industry veteran, the 43-year-old head of organic chilled food producer Pitango works a year ahead in creating flavour combinations.

As well as keeping an eye out for the new superfood of choice for the healthy-eating set, Laurence is charged with steering the maker of ready meals out of tumultuous times.

Founded in 2002 by Israeli immigrants, husband and wife team Yasmin and Ofer Shenhav, Pitango was sold into private equity ownership in 2008 before going into receivership in late 2012 when its Australian parent hit trouble.

Last year Pitango was bought for $5 million by Australian family-owned meat processor and chilled food firm Beak and Johnston, which pumped in $1 million to keep the brand going.

Laurence, who took over at Pitango in February in addition to running Beak and Johnston's three-year-old New Zealand meat processing business, says a further $3 million will be invested in a new Pitango manufacturing plant opening this year in Wiri.

He says Beak and Johnston was attracted to Pitango's profitable, growing, export-focused business, which turns over $20 million a year.

Pitango also has a strong organic brand and a loyal workforce including production manager Larry Liu, who has been with the company since it started.

"One of the reasons [Beak and Johnston founder] David Beak bought the business is he just loved the culture and the people in the business," says Laurence.

Staff will be bussed to the new production plant, which will quadruple the available floor space and double production.

Currently 70 per cent of Pitango's soups, risottos, curries and pasta meals head overseas, mainly to Australia, says Laurence, but the aim is to send more to international markets.

He says Pitango's success has seen competition from copycat brands, creating market saturation locally.

"Pitango is still number one in New Zealand and Australia, in terms of our share, but to be honest it's a real dog-eat-dog world out there now so we need to be developing new categories and also new markets."

Asia is firmly in the company's sights, not only to soak up the additional manufacturing capacity but to smooth the seasonal lulls that come with a focus on the Southern Hemisphere market.

With an eye on Korea, Japan and China, Pitango has been working with NZ Trade and Enterprise to research the market and meet distributors and retailers.

Laurence, who has previous experience in Asia, says finding a good, trustworthy partner who can provide guidance on product and packaging development is the hardest but most important step.

"We want to be a $50 million company in five years," he says. "It won't come from New Zealand and Australia, it will come from Asia and that's effectively doubling our turnover in five years."

On the home front, Laurence is doing the rounds of Pitango's trade customers and restoring faith in the brand that took a knock during its private equity ownership and receivership.

"With all the ructions the company has been through, we have to get our trust back from our trade partners and that's about doing the basics really well.

"To be even considered now in the supermarket business, you've got to be able to supply to order, so in other words you've got to make sure what they want you deliver, on time, every day and that flows through to the on-shelf presence you have."

Beak and Johnston has a close relationship with Woolworths, the Australian parent of the Countdown supermarket chain, including creating house brand products on both sides of the Tasman.

Pitango is no exception, and creating several brands - it also produces Artisano chilled foods - is a strategy Laurence says helps maintain control of a category and builds a strong relationship with the retailer.

"The supermarket business is like any other business really, it's about relationships that you have with your trade partners.

"The closer you can get to your trade partner, the more likely it is that they will support you with your innovation and get you shelf space."

More money will also be invested in marketing, something that suffered while the firm was in the hands of private equity players, says Laurence.

"People have stuck loyally by us because they believe in the product, but we haven't attracted a lot of new customers so we need to bring some more consumers to our category."

Growth is also likely to come from expanding the focus from hearty ready meals into ranges offering convenient, healthy options for breakfast and lunch.

The company's in-house innovation team is brewing up fresh and trendy flavours aimed at tempting shoppers when they hit supermarket shelves in a year.

- NZ Herald

Helen Twose

Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose is a freelance business journalist who writes regularly about KiwiSaver and entrepreneurial companies. She has written for the Business Herald since 2006, covering the telecommunications sector, but has more recently focused on personal finance and profiling successful businesses.

Read more by Helen Twose

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