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Rural Industries Research & Development Corporation |
Thirty Australian Champions
Shaping
the future for rural Australia
edited by Keith Hyde
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RIRDC's major publication documenting the experience of thirty outstanding Australians who, through their business enterprise, vision and perseverance, are making a significant contribution to the welfare and economic growth of rural and regional Australia. Each chapter is presentedf as a separate html file which you can view, download and print.
Huon Valley Mushrooms
After a number of years at the Department of Primary Industry, Michael Brown returned to the dairy and timber mills of the family business. A downturn in the timber and rural sectors soon came and Michael became a restaurateur. This shift came during the mid-eighties, a time when innovative cuisine was in vogue. Michael's particular interest in the kitchen lay in specialty mushrooms. These mushrooms were popular, but expensive: he would often pay $100 a kilogram for them.
Five years passed in the
restaurant before Michael decided to go back to what he knew best; farming.
“I sat down and thought about in which primary industry the farmer doesn't
have to worry too much about the weather," he says," and after some deliberation,
I came up with mushrooms — those specialty mushrooms I used to pay so much
for as a restaurateur."
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Left: Michael Brown
is very proud of his range
of Huon Valley specialty mushrooms. |
A specialty mushroom business also tied in with the food service sector, a market he wanted to penetrate. It was 1988, and he thought he needed some retraining, eventually taking a year off from work to take part in the Tasmanian Enterprise Workshop program. The team of which Michael was a member adopted his suggestion to develop a business plan and to start a business to grow specialty mushrooms. Funds were soon raised. The Enterprise group became shareholders and a business was built from the original plan in late 1989 and early 1990. After a relatively short period of time, Huon Valley Mushrooms produced its first crop in 1991.
The Business Plan
At the foundations of the original business plan was the idea to use normal, white mushrooms for early income." hat we saw in Australia and New Zealand were companies had gone into specialty mushrooms and concentrated entirely on those," he says." They developed a product but did not develop a market and consequently had fallen over badly." Huon Valley Mushrooms (HVM)used some of their funds to conduct research on the specialty strains they were aiming to phase into major production. The early crops of white mushrooms enabled them to continue this plan, with around one tonne being produced each week providing the cash flow. Using the same infrastructure, HVM is still producing white mushrooms, although their volume is now considerably larger, with between five and six tonnes being produced weekly. Apart from the whites, the specialty mushrooms HVM produced in the early years were Tasmanian Honey Brown and oyster mushrooms.
Although this early output is impressive, Michael says the expertise in growing mushrooms was not easy to find." The pool of expertise is very tightly held," he says." here are no training courses. I thought I could learn it myself, but little did I know, it's like wine- making — an art form as well as a science.
Champion Qualities
- Careful choice of industry with market niche
- Location in known area
- Focus on value adding and marketing
- Attention to sound business management
- Research focus on quality new products.
Growing Mushrooms
There are two vital aspects
to mushroom growing, the first being substrate production, the second
being the growing itself. Unlike in New South Wales, where major substrate
producers sell their product to satellite farms, Tasmanian mushroom farms
are obliged to produce their own substrates.
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Production of White Agaricus and Tasmanian Honey Brown mushrooms provided the cash flow and stability for development of the specialty mushroom business. |
As a result of obstacles such as substrate production, three years passed before HVM was in a position where it could make significant progress with its research.
Research funding initially came from the Horticultural Research and Development Corporation, which provided 12 to 18 months of funding. This funding went into investigating the growth habits of shiitake mushrooms. The amount of Australian information on specialty mushrooms is modest, and they still had much to learn. A two-year grant from the Rural Industries Research and Development Corporation (RIRDC)allowed HVM to research other mushroom varieties.
At the end of 1995, the RIRDC project finished. However, it was not until 1997 that HVM was satisfied enough with its research and development to spend considerable money on expansion. One of the major problems discovered through the research concerned substrates. Most of the specialty strains were Northern Hemisphere strains, which grow on deciduous substrates." He first developed a system using eucalypts," Michael says." He also looked at myrtles, which were the closest we had in Tasmania to any tree species in the Northern Hemisphere. From using both trees, we found eucalpyts were working best." Matching the correct substrate to the right strain is a major issue in Australian mushroom production. Mushrooms can potentially grow on many different wood-based substrates, but whether they produce viable, quality yields is another matter.
The eucalypts and artificial substrates have been developed successfully, and have allowed HVM to experiment with various mushroom strains. At the moment, White Agaricus comprises 80 per cent of HVM's production, with Tasmanian Honey Browns making up about 16 per cent of the production. The remaining four per cent consists of various specialty mushrooms. These percentages convert into about five tonnes of the white being moved each week, 800 kilograms of the brown, and few kilograms of the specialties.
Marketing
With the opening of a new facility in the valley, whites will only constitute 50 per cent of the production, with the specialties constituting the other 50 per cent." This will make a huge difference to the way we do business," says Michael." At the moment, we are supplying the entire Tasmanian specialty market almost exclusively. The product that comes out of the new facility will go into the larger Australian market."
Below: RIRDC-supported
research allowed development of new substrate
'logs' based on eucalypt
sawdust for specialty mushroom production.
Three years ago, HVM was selling into the'mainland', but the Tasmanian market grew so rapidly it pared back its operations to Tasmania. “ Wholesalers and retailers require continuity of supply, and it's very difficult to make a commitment to the mainland when local retailers are saying;‘why are you sending your product to Melbourne when we need it?’”
HVM was happy to pull back into Tasmania, because it was never content with the packaging or marketing of its product. Being based in Tasmania has permitted HVM to develop marketing strategies. These promotional and packaging tests have returned positive results."There's no point putting a high-price product in shoddy packaging. We've looked at the supermarkets in Sydney and Melbourne, and many of the specialty mushrooms are imported from China and Indonesia, packed on white polystyrene trays, and just not presented like a gourmet product should be."
Production Arrangements
One of the more difficult problems HVM has faced over the last few years is that the different strains grow on different substrates. These differences render them incompatible within the same room." You have to manipulate your rooms to trigger the growth. Each type of mushroom has a different trigger and different requirements. The limit of our old facility has become a major barrier."
A new facility has already
been designed and constructed in Tasmania. The floor area stretches over
2,000 square metres, and holds eight growing rooms, each containing about
12,000 artificial logs on eight levels of growing racks. Michael explains,
"The logs are the substrate/medium on which the shiitake grow. They are
made by placing 2.5 kilograms of sawdust in a special plastic bag which
also contains a microporous filter. These bags of sawdust are sterilised,
then inoculated with the correct shiitake strain, sealed and placed in
a climate-controlled grow room. After about 90 days, the mushroom mycelium
has grown through the sawdust and the plastic bag is removed, leaving something
that resembles an old loaf of bread. At the end of 10 days outside the
bag in a climate- controlled grow room, the first shiitake mushrooms are
picked." At the current facility, the growing area is about 1, 000
square metres, split into 10 growing rooms, with five racks in each room.
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Left: Huon Valley Mushrooms
now employs 30 people in the idyllic Huon Valley in southern Tasmania. |
HVM is the biggest business in the north-eastern (Huon)valley, employing about 30 people, the majority of whom are pickers."They only work when the crop needs to be picked," says Michael. “Sometimes they're here for two hours a day, sometimes twelve hours a day."
Ideally, HVM would produce the same quantities each day, but weather variations and machinery breakdowns can affect crops."At the new plant," says Michael," verything will be computer-controlled and everything will be monitored closely."
More changes are expected when the new plant goes into operation. The turnover is expected to rise from $1. 5 to 5. 5 million, and they will employ about 60 people.
The Challenges
Initially, the biggest challenge facing HVM was acquiring the right techniques to grow specialty mushrooms." I think anyone can come in and grow them, even if they brought strains in from overseas," says Michael, "but they mightn't be able to make them economically viable. An important part of the business is to get the strain as well as the yield right . A lot of trial and error is required. Water quality is also very important. Mushrooms are over 80 per cent water. You have to be concerned about the water which comes both in and out of the system."
Far from the production side, market development has proved to be one the biggest stumbling blocks of the industry. With somewhere in the vicinity of 80 per cent of Australians buying mushrooms at least once a fortnight, a large percentage of those have bought specialty mushrooms in the last six months. Market research has shown that consumers would buy more specialty mushrooms if they knew how to use them, or if their stockist carried more." he challenge is to educate retailers and customers in how to use specialty mushrooms," Michael says. “There is, however, not a great difference to using a normal mushroom. But it is a new product and people see it as a gourmet product, so they want to make sure they get the best value out of it."
The retail market is only 50 per cent of HMV's market, with restaurants completing the picture. “We don't have to work very hard with restaurants," he says." hefs already know what the mushrooms are. They're looking for quality and something new."
The importers of specialty mushrooms are selling their product to supermarkets at a lower price than Australian-grown specialties. Quality and shelf life are obviously major concerns, and Michael does not consider the importers to be difficult competitors. “The quality is very ordinary. And in some ways it's a different product to what we are producing. The imported product is very dark, it looks more like a mushroom picked off the floor of a forest. It doesn't seem to have much colour."
Below: Expansion of
the business has required significant new investment
in laboratories and specialist autoclaves.
The Importance of Research
One of the lessons Michael
has learnt from building a business in a new industry is the importance
of research and development." It's critical," he says. "The maintaining
of research and development has been one of our aims since we started.
We wouldn't have been able to get the stage we are if we hadn't conducted
that initial research.
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Left: Michael Brown
believes that quality packaging is critical to sale of specialty products. |
"It all flowed on from there. We've now developed a strain of shiitake we are confident with and we can now make a viable operation from it. This company, and the industry, will continue to grow from research and development.
“When I was in the DPI, local farmers had so much information they could utilise but they never knew it was there. The more information you can get, the more your business develops. Information is money."
Nowadays, Michael looks back on the 1988 business plan as "an exercise in nursery school". Yet it did give HVM a blueprint from which to work. Furthermore, all but one of the Enterprise Workshop members are still shareholders. When his original five-year plan expired, Michael hired consultants to prepare a comprehensive plan. This new plan drew investments, keeping Huon Valley Mushrooms operating, and allowing them the resources to further the business towards their original market:specialty mushrooms.
