SPCA: best before 1954

Fans of strategic marketing call diversification one of the four pillars required for growth

DOES anyone eat the glace cherries in tinned fruit salad? Actually, does anyone even eat tinned fruit salad? Maybe there’s an issue because you struggle to use the words tinned and salad in the same sentence.

It's not just "so yesterday", but "so 1954" - and not in the cool rockabilly revival sense, more like a dusty time capsule. SPC Ardmona (SPCA) has been processing fruit since 1917, but the old adage "if it ain't broke, don't fix it" seems to have been its mantra - and its downfall.

Like Holden and Ford, SPCA is a company which, up until recently, was following the path to disbandment. Like the car companies, SPCA wasn't shy to hold a hand out when times got tough. The three of them suffer from an ailment crippling Australian industry, and that is failure to diversify.

About 10 years ago, off the farm on a stint in Melbourne, I found myself waiting tables at a sit-down lunch for 1000 people, the formal launch for a global automotive industry do that week. Mr Honda was in town along with bigwigs from Toyota, and of course Holden and Ford were present. I stood upright behind my assigned tables whilst the keynote speaker addressed the large and rather impressive group.

He'd spent his whole life in the car industry, eventually working up to an international level, consulting to the biggest and the best. You name a manufacturer, he’d walked the factories, he’d sat in the board rooms.

His jaw-dropping speech gave Aussie automotive manufacturers a firm clip around the ear, not the expected pat-on-the-back guff. Looking back, it was a message that fell on deaf ears.

“Wake up,” he said. “You’re trying to compete in a big, global market, with a product that costs much more to make than your competitors. They make the same or similar product, many are more efficient, value-added and some with brands far more in-line with the tastes of your minute customer base.

"What was the most profitable car company in the world these last five years running, who only make 55,000 cars? Porsche.”

His advice for the gathered execs was simple: diversify or perish.

“Take your resources, technology, skilled labour and infrastructure and create something the world has never seen before.”

Watching the mud-slide over the following decade in some of our industries, he was spot on.

SPC Ardmona have also failed to re-invent, renew and grow. They’re bogged, flogging a product which had its heyday half a century ago, a little like Holden and Ford actually. In fact, anyone old enough to have bought a new WB ute would be from the same generation that popularised a dessert of tinned fruit on icecream.

Admittedly, battling a high Aussie dollar, dumped imports and the supermarket duopoly squeeze, SPCA has been through a storm - but the writing has been on the wall for more than a decade. Now growers and other stakeholders' businesses have been crushed because their distribution channel had tunnel vision.

Why does Australia fail to innovate, adapt and push forward? We think we’re good at it, we love to talk about it, but often we just harp on the negatives. And when we’re faffing around pointing the finger, countries like Switzerland, the USA and even New Zealand are surging forward with new products, new ways of producing and managing and - more importantly - new ways of thinking.

Fans of strategic marketing call diversification one of the four pillars required for growth - basic stuff, but too hard for us to tackle it seems.

Australia didn’t even get a mention in the top of The Global Innovation Index 2013. It was released on July 8 last year and is run by Cornell University. They rank 142 countries on their innovation readiness and performance using 84 indicators.

New Zealand came third overall in our region behind Hong Kong and Singapore. Our Kiwi mates also took out the prize for the country with most “ease of starting a business”. That’s unsurprising, even when you just look at their ag industry. The innovation, support and pathways for young or new people in agriculture leave our industry for dead.

McDonald's change their product every eight or so weeks, rotating new innovations around a rock-solid core line. They know their customer, they listen, they market - and they sell, a lot.

The last major change SPCA made was “peaches in mango syrup” as opposed to natural juice. Hardly a game changer. When I see jars of gourmet-inspired produce selling for $6 to $10 an item in boutique markets and even corner stores, I can see there are opportunities to value add and even create demand in many areas. Why can’t this 'black sheep' start to lead or at least follow a different route?

Some famers diversify their business to great success. It's not for everyone, or every patch of dirt, but those that do, often do well. They put their business in a place to make a price, not just take. Or if they do have to take, other eggs in other baskets make up the difference.

To me, diversification means being on your front foot, and I don’t know many businesses - or people - that do really well leaning on their back. Do you?

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FarmOnline
Sam Trethewey

Sam Trethewey

grew up farming down south and now commentates on agriculture across Australia
Date: Newest first | Oldest first

READER COMMENTS

leonard corio
25/02/2014 4:57:48 AM

You are right here Sam. I can not let an opportunity pass to add another problem. Australia is exposed to a global market with easy access to all global products putting all primary producers and processors in direct competition with global suppliers. It ignores the obvious fact that our jobs are therefore also in a global market, and continues without change to the old broken system of protection of awards and conditions. If that is not a recipe to destroy jobs in Australia then I don't know what is.
Tigerdicky
25/02/2014 6:03:31 AM

Sam, I sure you and your Pitt St farmer mates would not work for peanut wages so why do expect the Aussie worker to, especially when directors of companies are given million of dollars in bonuses whilst they running their companies into the ground!
trigger
25/02/2014 6:17:57 AM

Maybe look up the term diversification. Your article is about specialisation, value-adding and niche marketing, which is the opposite of diversification.
bg
25/02/2014 6:22:52 AM

Sam Australians, especially farmers, have been taught to focus on the bulk market for the last 50 years that I know of. You are talking about niche products. We do have niche producers but they tend to be on the outer of the mob, And the mob rules. Ever been to a dairyfarmers meeting where a young fellow comes up with a bright idea? He is soon put in his place at the back of the herd. Unfortunately there appears to be no mechanism to change the culture.
Freshy
25/02/2014 6:24:43 AM

Spot on Sam! It concerns me they have been given a bailout to go back and just do the same this again....hence they will end up in the same situation in a few years. Tigerdicky, I think you are completely missing the point...perhaps you need to open your eyes, turn on your brain and re-read the article and look at what Sam has actually written
Hunter
26/02/2014 12:47:53 PM

Insanity; Doing the same thing over and over and expecting a different result. Sums it up well don't you think?
Get MuddyTo think clearly in farming and about farming, you need to get muddy - commit, roll up your sleeves and get involved. SAM TRETHEWEY gets stuck into some of the issues facing those on the land.

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