Breakfast king offers plenty to chew on

By DITA DE BONI

A lucrative new contract to supply Australia's Woolworths supermarket chain has topped off a Berry Berry Nice 10 years of food manufacturing for Mangere-based cereal magnate Dick Hubbard.

Today, Mr Hubbard sits down with his 120 staff and guests including Prime Minister Helen Clark for a wheat and milk communion to celebrate a decade of the Hubbard brand and production of five million boxes of its signature product, Fruitful Breakfast.

A trip this year to Australia - where the company's cereals already sell in Coles supermarkets - has paid off with the Woolworths contract, which should boost the firm's $25 million yearly turnover 10 to 15 per cent, says Mr Hubbard.

"To get that number two supermarket chain under our belt has been critically important," he says. "Previously, we tended to be seen as a Coles product only, but now we've made it into Woolworths we can move to get a better share of the market, perhaps in other chains."

The company is bullish about grabbing a bigger chunk of the Australasian cereal market - it has about 11 per cent in New Zealand. Exports account for about 15 per cent of output, and it hopes to achieve 50 per cent or more eventually.

Entering the bigger, tougher Australian market, Hubbard Foods will start with the same soft and fuzzy tactics it uses in New Zealand, including the inspirational newsletter Clipboard, which has appeared in all its cereal boxes since day one.

Mr Hubbard says he still gets up to 30 letters a week from people responding to Clipboard, and claims those letters have given him the happiest times since he began in the business.

The newsletter springs from genuinely held sentiment, but Mr Hubbard acknowledges its value to the building of the Hubbard brand. In markets such as Britain, the company can also use its strong association with things Kiwi, but it does not emphasise that approach in Australia.

"What will make us stand out in Australia is first, that we are seen as innovative, and secondly, our values base, our personalised approach to the consumer," he says.

"The idea of social responsibility is attracting more and more interest. We see it as a trend, not a fad."

As part of his social responsibility thrust, Mr Hubbard will soon relinquish his title as governing director when the company institutes a formal board. He will step back into the role of managing director.

"It is appropriate to have a board, in the interest of good corporate governance. We have to be careful not to lose the entrepreneurial edge to the company, but we've got to balance that with the fact that we are now a medium-sized company and have a lot of people to look after."

All that talk of social responsibility can be a two-edged sword, as Mr Hubbard discovered when industrial strife flared at Hubbard Foods this year. He was roasted by the media, which had previously given his views plenty of airplay.

The union was unhappy that he would not give workers a pay rise and meal allowance, and his portrayal as a paternalistic European exploiting his largely Samoan workforce was fruitful for his detractors.

In response, Mr Hubbard says he has a social contract to give more work to more people by keeping wage rates slightly lower and "manning rates at approximately three times" those of competitors.

The unions are satisfied for now, the workforce seemingly enthused about the 10-year milestone, and Mr Hubbard says he does not foresee too many difficulties with the new Employment Relations Act.

Surprisingly perhaps, the wages dispute has not been the worst moment of his cereal career.

The worst times, he says, were the first few years of operations, when the former food technologist and a small team were producing a handful of products under the gleefully goofy brand-name Winners.

"We called the brand Winners because it was better than Losers, but it was still a terrible brand-name.

"[Market research showed] that while Hubbard wasn't a great name by itself, people would respond to a cereal named after its maker. There's an idea of health and integrity that goes along with that."

While the Hubbard brand was being established, the fledgling company sold 500 to 600 tonnes of roasted peanuts each year to keep going.

Now it focuses entirely on cereals, producing 18 types (including Berry Berry Nice), with several new ones added each year.

Unlike some of its competitors, the company will not branch out into related products such as snacks and drinks.

Mr Hubbard says cereals provide plenty of room for growth on both sides of the Tasman.

"And there is plenty of potential for food manufacturing in New Zealand - look at Heinz Watties.

"Sure we have some problems like high freight costs, but in other respects we have low cost structures compared with some other markets."

Most importantly for the Hubbard brand, he says, is its foundation in a certain set of values, championed in every box of cereal.

Consumers are becoming more aware of, and responding to the softer, gentler, more personalised approach, he says.

There is a turn-off factor when a company takes too much of a hard line.

"But if you attach values to a brand they have to be genuine.

"It can't be just part of the marketing mix to generate soft, warm fuzzies, because it will only work in the short term, and because consumers have a crap detector between their ears and it's called a brain."