In Central NSW, a region where orchards have been struggling to maintain viability, the Hall family’s Caernarvon Cherry Co (CCC) is bucking the trend, upgrading their technology to ensure premium export-quality fruit and gathering growers under the BiteRiot umbrella to improve economies of scale, minimise risk and increase market clout.
Bernard and Fiona Hall, with Bernard’s brother Tim, are the second generation of a family-owned fruit-production business; today, they own three orchard sites as well as large-scale storage, sorting and packing facilities.
“Considering the … contraction in the Orange fruit industry generally – from 1980, when there were 350 apple and cherry growers in the district, to a mere 40 producers currently - this is a significant expansion," says Fiona Hall. "The implementation of new technology and advanced farming and business systems from within Australia and abroad has been the cornerstone of this expansion.”
Investing in cutting-edge facilities, equipment and technology
CCC upgraded its facilities to include seven controlled-atmosphere (CA) coolrooms; a SmartFresh room fitted with new technology to seal in apples’ crispness; state-of-the-art packhouses for apples and cherries; and, in 2013, an AirJet™ GP Grader costing $1,500,000.
“This new technology robotically removes blemished and internally soft fruit; it also sorts for colour and size. It takes 10 photos of every cherry, resulting in sizing to within 0.2mm accuracy,” explains Hall. “This alone maximises returns to our growers for larger-sized fruit. It also provides a reliable, consistent product to customers.
"We were the first cherry producers in NSW to install an optical sorting cherry grader. It gave us a significant point of difference … and has seen us gain direct vendor status with key fresh-produce supermarket clients such as Woolworths in the Australian market, Park n Shop in Hong Kong and Giant in Malaysia. It’s an outlay of several hundred thousand but it creates higher demand for our product and consequently, over several years, pays for itself.”
With knowledge acquired from the US cherry industry, they’ve also installed what Hall claims is mainland Australia’s cherry industry’s only pre-packing fumigation chamber, enabling CCC to sell its fresh cherries into overseas markets with strict import regulations.
“Fumigating our cherries prior to packing ensures the phytosanitary integrity of our products into emerging fumigation markets, such as Indonesia, India and Canada,” explains Hall. In its first season of operation, the fumigation chamber enabled CCC to ship 25 tons of cherries to Indonesia, tripling Australia's fresh-cherry export position in this market.
CCC’s capital investments are already paying off in improved quality, efficiency, market share and profits. “The new technology creates a high-quality product for our BiteRiot brand [for] which we can demand a premium price – which, in turn, attracts more growers to our packhouse,” she says. "[Today’s] customers are demanding consistency of quality and the ability to supply throughout the season. The new technology means we meet this demand, which the old mechanical graders cannot.”
Building a grower base
To maximise profits and minimise risk, CCC needed to expand its grower base. “Fresh cherries are all about economy of scale,” Hall explains. “We’ve established a great working relationship with our banks that [allows us] flexibility due to cherries being a high-risk crop. We’ve tried to reduce risk by having our supply pool spread over a large region.
To ensure a varied, consistent supply of premium lines of produce, the Halls built an alliance of around 40 apple and cherry producers with a further 250,000 trees. Through field days and info sessions, they pioneered orchards in non-traditional fruit production districts, helping Mudgee growers hit by a downturn in wine-grape production to convert vineyards to cherry orchards; convincing graziers and broadacre farmers in Narromine, Wellington and Cudal to plant fruit trees alongside their usual crops.
“All this required a significant degree of extension … we employed our own part-time agronomist/field representative to oversee the orchard development stage,” says Hall. “As these orchards come on line, [they’re] successfully producing fruit in new microclimates and providing valuable regional employment.
Recently, CCC employed a GM to improve packhouse efficiencies so it can pass further savings on to its suppliers. “We need to assist growers in benchmarking and … improving their efficiencies and productivity as well as our own,” says Hall.
“We’ll continue to develop a larger reliable supply pool and, in doing so, [ensure] a sustainable industry. It’s difficult for individual growers to develop a position in the marketplace and conglomerations of growers, packing and marketing under the same brand, is the way forward.”
Developing export markets
The export market is a vital component of CCC’s ongoing business plan. To that end, the Halls have retained the services of an international brand representative who regularly visits panel buyers and importers across Asia and the Middle East. It seems the investment’s paid off: CCC has brokered lucrative deals with Asian supermarket chains and was the leading mainland exporter of fresh cherries last season, packing 10 percent of the Australian crop; BiteRiot produce topped the China market for three weeks in 2013.
“Our brand is building and is now recognised,” says Hall. “As well as a large domestic supermarket chain, we currently supply markets in Indonesia, Vietnam, Malaysia, Singapore and Hong Kong, and the 2014/15 season will see us expand into Dubai and Europe. [But] our labour costs make it hard to compete, so we need to capitalise on the ‘clean, green’ image of Australian produce and be careful not to jeopardise what’s taken a lot of work to build.”
Turning waste into profits: cherry juice
Exporting premium-grade fruit is part of BiteRiot’s success; another is value-adding. By buying non-saleable grade-2 fruit from its growers and turning it into pure, pasteurised cherry juice, they’ve tapped an additional and potentially lucrative source of profit.
“Previously such fruit had been dumped, providing no return to our supplying growers,” explains Hall. “We’ve built a good domestic position with our cherry juice and, following a successful trade show in Singapore … it’s now on supermarket shelves in Singapore and Malaysia and will shortly be available in Vietnam. Stronger demand has been evident, particularly overseas, between the Southern and Northern Hemisphere seasons, when there are no fresh cherries on the market.
“We’re also looking at value-adding opportunities with cherry pulp and cherry seeds.”
For more information, visit http://www.biteriot.com.au