Tuesday 16th September 2014
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Berry company OOB has sealed two deals with Shanghai-based companies to sell its organic ice-cream.
The first deal is a one-year, ten-container, contract with retailer Li Feng which has already been trialling the ice-cream product for some stores. It plans to stock the ice-cream in 200 stores across Shanghai. The other deal is with a confectionary gift retailer which has 700 stores nationwide.
The move comes after OOB (Omaha Organic Berries) this month announced its frozen berry products will be stocked in all Coles supermarkets across Australia in a substantial multi-million dollar deal that boosted overall turnover by 30 percent.
Owners Robert and Shannon Auton bought their blueberry orchard in Omaha in 2001 and have since grown it into a $10 million revenue company. They sold 100 tonnes of frozen blueberries last year, sourced from their own orchards and other growers. Most of their own harvest is eaten within New Zealand with the company supplying supermarkets here and 860 Woolworths stores across Australia. Sales growth has been more than 45 percent year on year.
Robert Auton said there was a better margin on the premium ice-cream product than the frozen berries and he was keen to develop that side of the export business. He had always thought China was a good opportunity for OOB but was initially daunted by stories by other companies of how difficult it could be to export there.
"Everyone tells you to steer away from China but I thought we shouldn't be scared of it. I think there will be our future," Auton said, mainly due to the change in Asians wanting a more westernised diet and more dairy-based foods in particular.
He's teamed up with logistics provider Chinz International which was established two years ago by David Mitchell and Jon Shearer. It has a structure on the ground in China to help small to medium enterprise companies enter the higher end of the food and beverage market either directly or through agents.
Mitchell said his company effectively acted as an office in China for SMEs, providing services such as full logistics support, tax and accounting help, monitoring distributors and brand promotion.
"You may have a high quality product and a good brand but you need to manage that product in market. That's what we do," Mitchell said. OOB is the first company it has helped go through the full process though it has another two food and beverage brands currently going through the lengthy registration procedures in China.
It has taken a year for OOB to get its ice-cream through the regulatory hoops required for food exports.
"China is deliberately making it very difficult for foreign-owned companies in China. A lot of foreign-owned companies are looking to get entry and finding it too difficult," Mitchell said. "But the more difficult it becomes, the bigger the opportunity will become for us if you have the right structure to manage it. I wouldn't want to be starting from scratch again now."
OOB's Auton said the first container of ice-cream was due to leave New Zealand in November which will be winter in China. While that was not ideal timing, he wanted to get the product well-established before the Chinese New Year early next year. "That's the period when things will take off."
The Chinese product will be repackaged with Chinese writing and colours that appeal to consumers there and the brand will be known as Ohbay.
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