Delmaine chases export opportunities
Delmaine Fine Foods is beefing up its exports in a bid to push annual revenues up $30 million in the next five years to $100m.
With more than 300 Delmaine products on supermarket shelves in New Zealand, managing director Rick Carlyon thinks further growth in the local market will be limited and instead he's focusing on taking the company's Mediterranean and Italian-styled products to Australia, Singapore, Malaysia and Hong Kong.
Carlyon created the successful Mother Earth brand which he and business partner Thane Smith eventually sold to global confectionery giant Cadbury in 2000. They bought Delmaine the next year.
Delmaine has been a major player on the domestic food scene in New Zealand for 30 years, growing from a small importer to one of the country's leading food manufacturers with a turnover of $70m and around 220 staff.
It makes a range of chilled products including pasta, sauces, soups and pestos as well as pantry products including bread, cakes, sauces, desert toppings and dressings. It also continues to import European products including antipasto and olives.
With just 7 per cent of revenues currently coming from exports to Australia, the company sees significant opportunities with its brand abroad.
"The problem with our industry is there's no growth in the grocery business, there isn't a great increase in population," Carlyon said. "There's a huge amount of pressure on pricing so we wind up in a situation where if you want to get some growth, you've got to do something new."
The two owners will fund the overseas expansion out of profits, and have no plans to publicly list the company to raise capital.
"I'm not interested [in a public offering]. Having just the two of us has made life an awful lot easier," Carlyon said.
Delmaine has spent the last two years rationalising six operations into three after closing one of two properties in Christchurch, one in Tauranga and another in East Tamaki, Auckland. It has retained its Auckland headquarters and plant in Mt Wellington, a manufacturing operation in Manukau where it makes most of its fresh food and a small operation in Christchurch.
Carlyon says they now have substantial capacity to cope with increased export orders and room to expand if necessary. Innovation will also be key to the company's continued growth, he said.
"A pot on the stove – that's how it all starts."
It's the same strategy the pair employed at Mother Earth with its foray into the then moribund muesli bar category. "It was thought at the time [pre-2000] to be very boring," he said.
But machinery at the back of the Christchurch factory they'd bought changed that, with a little help from a recipe in a women's magazine at the time. Their baked muesli bars with fruit fillings in the centre became a hit when coupled with aggressive marketing.
They're still made today by Hamilton-based private company Profile Foods, which bought the business from Cadbury.
Delmaine has been exporting products to Australia since 2006 for use in house brands and just a few products such as Ginger Kisses biscuits under its own smaller Rosedale brand.
"We've had relationships with supermarkets over there for years so we know our way round a bit," Carlyon said. "Getting a small share of something in Australia is obviously quite big for most New Zealand companies."