Kiwi cereal maker Smartfoods accelerates expansion plans 21 Jul 2015
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
Kiwi cereal maker Smartfoods accelerates expansion plans on trend to healthy eating
By Fiona Rotherham
July 21 (BusinessDesk) - Kiwi cereal maker
Smartfoods is about to shift into a new factory that will
treble production capacity as part of a five-year plan to
boost revenue to $50 million from $15.7 million by jumping
on a trend towards healthier eating.
Smartfoods, which
has around 50 staff, has grown at a compounded annual growth
rate of 36.5 percent since its first full year of trading in
2005/06 and exports account for more than a third of
revenue. The Auckland-based company's current St Johns
factory is nearing capacity and Smartfoods is shifting to a
5,600 square metre Mt Wellington site, costing $2.5 million
to fit out, which should accommodate growth for at least the
next five years.
The company has the licence to
manufacture Vogel’s-branded cereals in New Zealand and
China, makes a Hillary-branded cereal range where royalties
go to the Ed Hillary Charitable Trust, and will launch its
own branded cereals in the next two months.
Chief
executive Justin Hall started Smartfoods in the kitchen of
his Parnell, Auckland home in 2003. He gained the licence to
manufacture Vogel’s cereals, beating out Goodman Fielder,
which makes Vogel’s bread. Kellogg’s acquired the
licence for Vogel’s cereal and snacks in Australia where
Smartfoods sells private label cereals to supermarkets.
Hall’s wife, Vicky Taylor, joined the company a few years
later when it reached sufficient scale to take the
manufacturing from contract to in-house.
While the company can apply to extend its Vogel’s licence to other countries, it had an unsuccessful foray into the US market with a gluten-free cereal. Hall said the five-year strategy focuses on three markets, New Zealand, Australia, and China, rather than being distracted by the many opportunities in front of them.
“One thing that evolved as part of our strategy was finding the right market opportunities to chase. There’s a lot of good ones, and then some great ones and we have to be clear about those because we only have so many resources to focus on a few key areas,” Hall said.
Julian Davidson, former CEO of Independent Liquor, joined the board last month as an independent director, and Taylor said he’s a good sounding board as the company rapidly grows.
“What has got us to here, is not what’s needed to keep expanding the business to that next stage. When you first start out you have to disregard what people tell you or you’ll never do it, you have to believe in yourself. At some point you reach the next stage of growth where you have to start listening to other people and be prepared to take advice. It’s a pivot point where you say ‘what do we need to be doing differently?’.”
Hall said they’ll continue the same funding path for growth - out of cash flow, bank debt, and a number of angel investors, and he has no plans at this stage for a sharemarket listing of the private company which he and Taylor majority own.
The pair say Smartfoods is riding the wave of consumer sentiment away from processed to healthy foods with natural ingredients. Their premium products include gluten free, lower sugar, and even a cereal for those with irritable bowel syndrome who find digestion difficult.
It launched nine new consumer products this month including toppers, a pack of raw nuts and seeds that can be spread over cereal or yoghurt and add protein to any meal. This financial year around half of its revenue is expected to come from new products launched in the past two years which is particularly high in the fast moving consumer goods sector.
Hall prides himself on the company
having had a culture of innovation from the outset. For
example, it was the first worldwide, as far as he knows, to
introduce the natural sweetener stevia to breakfast cereals
three years ago.
Most sales into China over the past two years have been online through local distributors and Taylor said that’s provided a lot of useful consumer feedback because the Chinese are avid online commentators about what they like and dislike on products. Smartfoods is about to start producing cereals tailored specifically for the Chinese market rather than just the existing range while seeking additional distributors.
Until now the innovation has been mainly iterative – introducing new types of cereal. But Taylor said the new strategy aims to do less “similar stuff and more different stuff” and they’ll take a fresh approach in future to ensure that transformational innovation happens rather than sits as ideas within the team. Hall said the new factory provides a lot more production line flexibility to “zig and zag” based on market trends.
The pair are keeping quiet on their own branded product being launched soon, apart from saying it will offer something new to the market that didn’t suit sitting under the parameters of the Vogel’s brand.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more