Protected cropping tag not a selling point... yet

The Protected Cropping Australia Conference 2019 at the Gold Coast last month held a panel session tackling trends in the retail sector.

The panel was made up of Frank Barillo, Roc Partners; Joseph Cartisano, Perfection Fresh; Lee Peterson, BerryWorld Australia and Michael Engerman, Costa.

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It was moderated by retail trends expert Tristan Kitchener, Kitchener Partners, with questions taken from the audience.

While various topics were covered during the session, a substantial portion swirled around the possible marketing opportunities to come from covered production.

Mr Kitchener said consumers were more closely linked to the supply chain than ever before which meant they were hunting for information on supplier practices.

Mr Cartisano said he thought there were opportunities to leverage a sales angle with glasshouse or greenhouse production but communicating that to consumers required some thought.

"There is a long way to go to explain the benefit of protected cropping and brands," he said.

Costa's Michael Engerman reinforced the possibility of using protected cropping as a marketing tool, however he said the industry was still too fragmented for retailers to be involved with it.

"The only way we will get up and get more people to listen to them is to get more consumers asking for it," Mr Engerman said.

But he also said the number of people who were seeking out produce by their source and the ethics behind them, was minimal.

"That still makes up a very small percentage of people who actually want to know. Most are on autopilot. They know what they want, they pick it up and go," he said.

Mr Engerman said it was about understanding the consumer.

"Future work and work now is being done around trying to understand what the consumer wants and when do they want them," he said.

But there were obvious advantages and attractions to protected cropping, according to Mr Barillaro from private equity investment firm, Roc Partners.

He said one of the challenges of agriculture investments in the past has been climate impacts, something that was largely negated with protected cropping.

"Protected cropping allows us to minimise that risk and have more control over climates," he said.

"When the guys in Sydney are doing the figures, it looks better."

AN environmental bottom-line was increasingly becoming a consideration for major food retailers, according to the panel.

"There is a lot of focus on around how are we making investments that are doing good for society," Mr Barillaro said.

"The altruistic is becoming a big part of the decision making, to the extent that you have to give up some return in order to do good things."

Guiding the quality and marketability of new produce lines has been an ongoing process for BerryWorld Australia, according the company's Lee Peterson.

"As far as our company is concerned, we spend a huge amount of money developing varieties," he said.

He gave an indication of the long road to securing new varieties to introduce to market.

He said BerryWorld Australia did about 6000 varietal crosses every year and ran them out, a process that had been going for about 15 years.

In that time, it has resulted in just two varieties.

"There has to be a mechanism to work with suppliers, supermarkets, and growers," he said.

Putting that time and money into coming up with a new variety can make sense from an investor perspective as well.

"We get attracted to IP varieties, something with a point of difference," Mr Barillaro said.

Once a variety is launched and settled on though, it requires growers to produce it, something that is not without risk.

"We want to protect the IP without diluting it," Mr Barillaro said.

THE need for ethical production extends beyond just "doing good" in society, it seemed.

BerryWorld Australia's Lee Peterson said working with growers to ensure all standards were met with both produce quality and employment practices was important.

He said ensuring proper worker practices were in place was paramount for a brand, particularly in an industry where mistreatment was rife.

Mr Cartisano agreed.

"You can't benchmark against what others get away with it," he said.

Mr Engerman said there was change already happening in this area with some major chains promising to only source from ethical operators.

Investors too were aware of such possible black spots in the industry.

"It's absolutely critical," Mr Barillaro said.

"We'll see a really great investment but if it doesn't tick that box, then do we want to be part of that?" he said.

"If we can't get comfortable with the investment, we'll just knock it on the head."