Nov 27, 2009
Pitango prepares for Asian Launch
by Graeme KennedyAuckland organic food manufacturer-distributor Pitango plans to expand into Asia, with Hong Kong and Singapore likely targets and Japan a possibility.
General manager Wade Gillooly says the company is working on product development to meet local tastes in offshore markets, though convenience and health qualities are universal attributes for any consumer group.
“As a fresh product, we can’t ship it too far, which might rule out markets such as Europe,” Mr Gillooly says, “but there are many good opportunities in the Asia-Pacific region for us.
“We went into Australia in 2006, gradually building the business and now 65% of our sales are there — you’ve got to look at Australia for growth and it is important to stay close to home markets and follow trends.”
Mr Gillooly says a growing trend in the food business is carbon emission awareness and in the UK products are now labelled with the amount of CO2 and greenhouse gases generated during production.
“Customers overseas are making purchase decisions based on how much emission is produced and although it’s not in New Zealand yet it is on the way,” he says.
“Last year Pitango became the first food manufacturer in the world to be certified as carbon-zero — we measured and reduced emissions, then bought carbon credits.
“This is part of our company’s ethos and looking ahead a couple of years it could become a key buying decision here for consumers wanting to save the world.”
Pitango topped the food wholesaling sector in The National Business Review's monthly Exciting Companies series with a 67.5 rating in surveys conducted by strategic business consultancy New River. It was followed by Moore Wilson, Angel Bay, Kato Pacific Marketing and Bidvest (see table).
Pitango was started in 2001 by Israeli chef Ofer Shenhav and his New Zealand-born ballerina wife Yasmin, initially with pre-packed salads assembled at rooms in the Auckland Badminton Centre and sold through supermarkets and delicatessens.
Mr Shenhav began making soups within 12 months and moved to 400sq m premises in Albany. This has since extended to l600sq m and 35 staff. Meals came on the menu in 2007.
With transtasman sales climbing, Australian private equity group Crescent Capital Partners subsidiary Gourmet Food Holdings acquired Pitango in February last year.
Mr Gillooly says Pitango products include 36 soups and four meal types — risottos, paella, pastas and curries, with two new styles to be introduced in February.
“They are all designed for healthy eating and made from natural organic ingredients containing no genetic modification or additives such as preservatives or gluten,” he says.
“Chilled meals are a new and emerging sector driven by lifestyle trends — people are working harder, longer hours and are looking for healthy alternatives to takeaways.”
He said 90% of organic ingredients were sourced in New Zealand while those unobtainable locally were imported — diced tomatoes from Italy and tomato paste from Israel.
Pitango produced four million heat-and-eat plastic packages of chilled soups and meals last year, rising 30% in the 12 months to June. Mr Gillooly says he will be happy with 15-20% growth in the current economic environment.
HARD GOING
Most food wholesalers have been hit by the recession with increased competition, falling demand and lower consumer spending driving business down.New River’s survey found worst-affected market sectors included luxury food suppliers and those serving the hospitality industry where restaurant customer numbers had dropped with the downturn.
“Those not experiencing the bite of the recession and doing well are in niche markets such as organics and health foods and lower-end suppliers serving people who have traded down from luxuries and restaurants,” New River says.
“Suppliers to takeaways have been busy and low-cost essentials such as eggs have been steady. In recent months we have seen lower costs for those importing food due to the New Zealand dollar rising against currencies like the euro but as the market has tightened the normally highly competitive sector has become even more so.”
While 10% of respondents say conditions are very buoyant, 55% reported trading as difficult or very difficult and 35% neutral.
New River says while only a few wholesalers say the situation is not improving, most feel it is picking up.
Business conditions
Current business conditions in the WHOLESALE FOOD SectorVery buoyant =10%
Buoyant =0%
Neutral =35%
Difficult =40%
Very difficult =15%
Top 10 Food Wholesaling
Rank / Company/ Excitement rating1 Pitango 67.5
2 Moor Wilson 61.0
3 Angel Bay 60.0
4 Kato Pacific Marketing 56.6
5 Bidvest 55.7
6 Gilmours 55.0
7= Blue Rock 54.0
7= The NZ King Salmon Company 54.0
9 Che Ready Meat Company 50.1
10 Sabato 46.0
