Virtuag: How to add value to ag commodities, according to CommBank

One of the best ways to secure the future of the Australian agri sector is to think about adding value to raw commodities. CommBank’s Adrian Parker explains how.

Value driven: Red Rich Fruits is a family-owned grower, packer, marketer, national distributor, transporter and exporter of superior quality fresh fruit.

ONE of the best ways to secure the future of the Australian Agri sector is to continue to get closer to the end customer, and one way to do that is to think about value adding.

Adrian Parker, CommBank’s general manager, specialised agribusiness solutions, said with current uncertainties about labour, the global marketplace in flux and growing competition for the supply of raw commodities, value adding is where Australia will find its opportunity.

“We’re not the only country exporting raw product and the global marketplace is highly competitive, especially considering the volumes coming out of the Black Sea, the subcontinent and the Americas,” Mr Parker said.

Adrian Parker is CommBank’s General Manager, Specialised Agribusiness Solutions.

“Value adding is the best way forward for our industry, and that means finding smart and tech savvy solutions which can improve our costs and cost base.

“We need to make our industry a target for investment.

“We need to be looking at adaptation, modification, investment and branding to help our industry capitalise on the returns to achieve higher margins.”

Mr Parker said, while small in profit pool today, the ‘superfood’ sector, including nuts, food powders and medicinal horticulture products, is especially well-primed for value adding to capture end customers.

“Beetroot powder sells for thousands of dollars a tonne,” Mr Parker said.

“We grow the beetroot then it is being processed overseas, but there is technology for hydration and rehydration on the market that we could bring to Australia.”

According to Mr Parker, the challenge around value adding has three clear phases.

“First, we need to understand what the customer wants to consume and this will continue to evolve as trends change. Second we need to understand how we can fill the brief and in many cases we have to think about the Australian industry developing these value-adding supply chains in Australia” Mr Parker said.

“Lastly, we have to plan and forecast and ensure we have the right lens around profitability and sustainability. In other words, we do have the opportunity to start small, learn, and scale quickly.”

CommBank Regional and Agribusiness Banking business has more than 600 team members across regional and rural Australia, with more than 74 dedicated agribusiness specialists who work closely with agribusiness on their specific needs.

For more details, visit commbank.com.au/agribusiness

● Adrian Parker will join The Weekly Times editor Ed Gannon for a Interactive Event Series ‘Kicking goals: what should Australian agriculture be looking to achieve by 2030?’

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RED Rich Fruits is a family owned grower, packer, marketer, national distributor, transporter and exporter of superior quality fresh fruit.

Michael Napoleone is part of the third generation to operate the business and works alongside family members including nephews Joe, Andre and Max, and son Jack.

Michael says the fruit business is very much paddock to plate, and they work closely with their customers to value add and deliver to their expectations.

In the apple business, this has meant unwaxed fruit for supermarkets and a dedicated line of waxed fruit for a niche group of greengrocers, for example.

This year, the Napoleones opened a new, purpose-built packing and distribution centre in Coldstream, Victoria, with can pack 60,000 bins of fruit each year.

The new facility includes a Globalscan G7 optical grader, believed to be the first used for apples in Australia.

This significant investment allows the Napoleones to ensure premium quality produce for their fresh fruit customers along with the opportunity to offer third-party packing.

The grading and sorting technology also makes it easier for them to divert the right produce for value-add opportunities.

Produce that is not used to fill customer orders is sent across to the family’s Punt Road Wines business, which includes a range of ciders created from their apples and pears. Michael says the decision to get into cider was one of the best value add options he could have pursued, as it was difficult to get traction selling fresh juice, which had to compete with cheaper imported concentrates.

Where Red Rich Fruits is paddock to plate, Michael says Punt Road Wines is vine to glass, with the company growing the fruit, producing the drink and marketing the final product.

Across both businesses, the team is thinking about the product they sell before they plant anything, always looking at what customers and consumers want.

Most recently, this has seen the Napoleones secure the Australian Plant Breeder Rights for a new apple called Cosmic Crisp, known for its sweet taste and crisp crunch, in line with consumer preferences.