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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.
Protea Pride
For James Wood, proteas have been almost a way of life for 41 years. His father, a pioneer in the South African wildflower industry, began working with proteas in 1954 when the flowers were still picked from the wild.
Protea Pride is a grower and exporter of fresh-cut South African flowers and foliages to Japan. The business employs 7 full-time and 15 casual persons and exports approximately 140 tonnes of flowers per year. Of the 100 acres planted, 50 per cent is in commercial production. The balance comprises new or young plantations, plus areas devoted to trialling and developing new or hybrid varieties.
Protea Pride began operating when James and Elizabeth Wood, with their young family, migrated to Western Australia in January 1984. They brought with them'millions' of carefully selected protea seeds, 25 years of experience in the floriculture industry in South Africa, and a commitment to successfully grow protea cut flowers for export.
After travelling Australia-wide in search of suitable country for their venture, the Busselton district was chosen and 168 acres of land purchased at Chapman Hill. "The seed took six months to collect," James says, "and selling some of that seed, as well as some dried flowers we brought with us, is what kept us going during the initial period of setting up the Busselton farm. It was a frugal and frightening time. The protea industry here was in its infancy." Before 1984, there were only a handful of protea enthusiasts in Western Australia.
Left: James and Elizabeth Wood.
From the beginning, the Woods placed emphasis on their objectives to meet the export market criteria. Today, proteas are as important as Australian natives to the flower industry. Both complement each other in a very competitive market and generate valuable foreign exchange.
Protea Pride's business strategy is driven by a fundamental imperative to show a reasonable return on invested capital, while at the same time ensuring the quality of their products are not compromised in any way.
Champion Qualities
- Lifelong association with industry
- Careful selection of new location
- Focus on quality control
- Nurtures market chain
- Sound business management
- Constant attention to new product development
The Woods are focused
on what the business has to do and recognise that world competitiveness
is what Protea Pride, the industry and the country as a whole have to be
about.
The Woods feel very privileged to have been accepted as Australian citizens. They consider their Protea Pride farm is now very definitely called'home'.
In the Beginning
As South African migrants, the family was very limited by regulations restricting the transfer of capital to Australia. Lack of capital and the escalation of interest rates in the 1980s were inhibiting factors necessitating a cautious approach to capital developments and marketing. Careful planning ensured that each precious dollar was productively spent, thus minimising expensive mistakes.
Finding what James and Elizabeth considered the ideal region and farm to grow proteas successfully was a challenge. Protea Pride is situated on exactly the same latitude as their former farm in South Africa.
“Everything about the block was what we wanted, even the buying price. It had to be divine intervention — how else in a country the size of Australia could we have been so fortunate?” asks James.
Securing finance was very difficult. The banks were naturally cautious. There was no industry analysis to which the bank could relate and the Wood family had no past or present track record in Australia.
In the beginning they had only their past experience and intuition to go on. To imagine they could get everything right the first time would have been naive, foolish and demoralising. They were therefore prepared to learn, be different, to experiment, make changes and "to run with a gut feeling"
“The dream was the catalyst providing the drive and determination to succeed in a new country and beyond that to be the best at what we did," says James.
At first they ignored the 'market principal' pertaining to production and proceeded to produce on 'gut feeling'. So, in effect, they became production-driven instead of market-driven.
Below: Duncan Wood picking Protea White Pride — a Protea Pride hybrid.
Today, with more information on market trends, their developments are more market-driven, but they still continue to experiment and use that'gut feeling'.
Although South Africa and Western Australia have their similarities, there are significant differences. A long, hot summer, high light intensity and lower humidity are typical of climatic conditions in the south-western region of Western Australia. The Western Cape of South Africa, on the other hand, has a cooler summer, the humidity is higher and the light intensity is much less severe. Also the soils, pests, disease and climate changes had to be understood.
In addition, the infrastructure for the export of perishable products simply didn't exist in Perth 16 years ago. The excellent facilities at Cape Town Airport established over 20 years ago have only this year been surpassed by the completion of a new Air Cargo Centre at Perth International Airport.
The other significant difference was the lack of export culture and communication throughout the entire production-to-market chain.
Quality and Profitability
The Woods have always been of the opinion that quality is the cornerstone on which to build an export business, and that accurately labelled, high quality, graded produce is the key to successful completion on international markets.
Protea Pride is convinced of the correlation between quality and profitability. The Woods recognise that quality is a key goal for effective competition in domestic and export markets, with emphasis placed on both goods and services if they are to be successful in a competitive world — one without the other neutralises both.
Below: Elizabeth Fraser, James and Elizabeth's daughter, preparing Leucadendrons for export.
Quality control for Protea Pride begins with selection of the plant and continues through to maintenance, growing, picking, processing, grading and packing. All efforts are made to minimise the risk of bruising and damage to the product. "We always pick our flowers 'just in time'. In this way the flowers are not subjected to extra stress and the time saved adds to the shelf life," says Elizabeth.
“And if we don't have the air cargo space, we won't pick the flowers," says James about their quality control. "If we have been allocated space for a tonne, we pick a tonne, if we have space for three tonne, then we pick three. And we only pick the best, the product that comes into the shed must be 100 per cent or not at all."
Both James and Elizabeth are adamant that careful management of the 'cool chain' is a fundamental necessity for successful flower exports. To ensure the quality of the flowers was not compromised in any way, Protea Pride bought its own chiller truck to transport product to Perth Airport. "We only use direct-flight services," says Elizabeth, "because our product is perishable."
Focusing on quality as a standard has been, and always will be, one their priorities. However, they are convinced their efforts will be wasted unless they can continually improve their business and ability to capture markets. "We have a very good agent in Japan. He telephones us regularly with advice on trends in the market and writes notes with the returns," James says. "He tells us what the markets like, or don't like, and how much product is needed."
The Woods keenly adopt the'total quality management'philosophy. Therefore, planning and good management of the big picture is recognised as essential. This involves acting in ways to reduce cost and waste, improving productivity, having a reliable source of supply, and focusing on total customer satisfaction as a key issue.
Marketing
"The flower business worldwide
is experiencing enormous change affecting growers, exporters, importers,
wholesalers and florists. World markets are experiencing the effects of
overproduction and lowering prices. We operate in a global market.
Australian costs and charges
prohibit us from being competitive in low priced, high volume markets.
We have very little choice but to be niche marketers with low volume, exclusive
products," says Elizabeth.
Below: Duncan Wood and daughter Laura with an armful of Protea cynaroides.
“In the past we exported to Europe, but South Africa, Zimbabwe and Israel's lower cost structures impact on our ability to export to Europe, "says James. Over the last two years, the entire Protea Pride crop has been sold into the Japanese market, usually through auctions. "We hardly knew Japan existed before we moved here," ames says.
Portugal has also begun supplying the European market and increased production from South Africa was more evident on the Japanese market in 1999. Prices in Yen terms were up to 30 per cent lower in 1999. This, they believe, was due to an oversupply of flowers in general.
“Marketing is a complex process. Without constant and skilled management to keep pace with changing conditions we will lose market share. Our strategy involves building flexibility into our business to deal with an unpredictable world," says James.
When it comes to marketing, name recognition is vital according to Elizabeth. "Protea Pride — with the logo and red carton — is now a recognised quality brand in Japan. However, a brand name is only as good as its minder. Our aim is to provide something beyond a name or a carton. A product that will project a special image in the minds of the market consistently and over time," he says.
“The red box is now part of our trademark," says James, "but its adoption was a difficult decision. We were trading with a Japanese fellow who once worked with Coca-Cola, and he really pushed us to market Protea Pride in a red box. We fought over the idea," James says, "because no-one puts flowers in a red box: red is a hot colour. We ended up with a cool-red box, and it was some of the best advice we've ever had."
“The box stands out," says Elizabeth. "We are just about the only flower people in the world who use a red box. And as long as the quality is high, and it remains consistent, then we'll be remembered."
The original 'seed bank' brought by the Woods to Australia provided a 'plant bank' of considerable genetic diversity. With everyone interested in what is new or different, assessing, selecting and propagating superior plants as well as developing their own hybrids is an ongoing commitment. “Uniqueness or exclusivity is such a bonus when marketing," says Elizabeth.
Left: A new Protea Pride hybrid.
“Establishing a plant gene bank from seed is a time-consuming and expensive process." says Elizabeth.
“Selecting and vegetatively propagating plants from 'the bank' provides uniformity in growth and blooms with the different varieties. It can take up to five years to get a financial return from these selections. Hybridising takes longer and is more expensive because one starts again from the beginning, with seed. This process can be very discouraging when the many thousands of plants you have carefully nurtured can be a flop or very ordinary. Only a few have potential or are winners."
Because they control production, supply and quality, by only marketing their own products, they consider reliability to be another of their strengths.
Promotion
Protea Pride avoids the usual rhetoric and promises to deliver 'the earth'. They aim rather to achieve the reasonable targets set by themselves.
Protea Pride's approach to promotion is subtle but at the same time an ongoing activity. James believes you never have more than one chance to make a first impression and it is when you least expect to be promoting that you could in fact be gaining or losing a customer. "For us it is important to always be prepared for the critical appraisal," says James.
The Woods' aim is to project the image that Protea Pride is growing in more ways than one.
They emphasise that it is a family owned and managed venture supported continuously by a strong team of family members and staff, and that the younger generation, who are the present and future, represent stability and a commitment to ensure a sustainable future — this is a basic strategy of the Wood family.
Below: Leucospermum Oz Gold, another Protea Pride hybrid.
Members of the family also take part in Japanese promotions in conjunction with their importer/ marketing agent and a Dutch and New Zealand exporter. Up to 50 auctioneers could be present at a promotion. A top Japanese designer arranges flowers from Australia, Holland and New Zealand, to demonstrate the availability of products and how they can be mixed in a design.
Usually a slide presentation by the Woods is given to inform the participants of new varieties coming on stream and to provide background information on Protea Pride. "The feedback information is a vital guide to any future development or marketing strategy," says James.
“We believe we profit by reducing the range of our marketing activities. It is not realistic to chase after everything, so we concentrate on narrowing the focus," says Elizabeth.
The Importer/Agent
Good communication is recognised by the Woods as a vital ingredient for both the importer and for Protea Pride. Protea Pride was careful to select an importer prepared to build a 1ong-term relationship, one who is prepared to communicate and be their ears and eyes in the marketplace. James insists that importers come to Australia to visit the farm. If the importer likes the operation, then business arrangements are made. "They must visit us before we send them a shipment of flowers," he says, "and we sit down and go through how each party wants to conduct the business. There are no ifs or buts. You need to get your base right, and we feel we have. And we only work with one agent.
“Support and accurate information allow us to plan and change direction if necessary. It also allows us to adjust supply and avoid overproduction on a sensitive market, "says James.
Below: Protea cynaroides , a Protea Pride superior selection.
A percentage of each consignment from Protea Pride is pre-sold, the balance is sold at selected auctions. "The trend in perishable products is towards freshness, appearance, choice and reliability. Protea Pride's credibility depends on a consistent supply of quality flowers," says Elizabeth.
Balancing Environmental Conservation with Development
At Protea Pride, care of the environment and conservation of the natural resources are another priority. Quality soil and water are fundamental for Protea Pride's development and operating plans.
The Woods recognise the necessity to balance environmental conservation with development. They are convinced environmental policies that ignore realities will backfire, as will economic policies that disregard the environment. Protea Pride is therefore addressing'landcare'issues and changing its land management practices.
Cultural practices, such as continuous mulching, prompt an active soil microflora and inhibit the development and spread of Phytophthora cinnamomi (Jarrah dieback). This fungus attacks both. Australian and South African native species and is a serious problem if not contained. All planting is now done on ridged beds.
By selecting and propagating disease-tolerant stock, Protea Pride can reduce its spraying programs, reduce costs and limit the negative effects of chemicals.
The packing shed and facilities were designed and built — and the method and choice of chemicals for fumigation — were chosen with staff safety, efficiency and minimal environmental pollution in mind.
Landcare is a vital ingredient supporting export activity and is a long-term priority for Protea Pride.
By growing proteas for commercial utilisation, Protea Pride feels it creates a base for a sustainable income both in ecological and human terms.
For the time being, the Woods have no plans to expand their operation, but are concentrating on spreading their protea production throughout the year. "At the moment, we have a very heavy season from August through to December," James says, "and what we want to do in the next seven or eight years is to produce more during other times of the year, and not have that incredible peak. Although that won't be easy because the prices aren't always good."
The Woods'Advice for Beginners
Elizabeth subscribes to a global ethic. She believes it is important to recognise that we are now living in a global community, and that rural businesses must adapt to this shift. "You can't afford to sit in Australia and lean on the fact that there aren't many proteas grown here," she says. "The world has become smaller and we have to compete against imports and other countries competing with our exports. The yen, the euro and dollar are all chasing the same market. Ten years ago, you made money if you grew flowers in the Southern Hemisphere. Now there are flowers grown all over the world and at any time of the year you can buy any flower you want. Our Southern Hemisphere competition for Australian proteas comes from South Africa, Zimbabwe, and New Zealand.
“You have to have that marketing edge," says Elizabeth, "and I think that one of the biggest mistakes some growers make is not 'dotting their Is and crossing their Ts' when it comes to marketing and business management. You can't just stick the flowers in the ground and collect the money. Every link in the chain is critical."
