'Hippie' baby product captivates China

'Hippie' baby product captivates China


News
Bellamy's Organic chief executive said Australia's organic fruit and vegetable supply doesn't have the volume the company needs to grow.

Bellamy's Organic chief executive said Australia's organic fruit and vegetable supply doesn't have the volume the company needs to grow.

Aa

IN 2008, a "hippie, niche" Tasmanian product arrived on the bourgeois high chairs of China.

Aa

IN 2008, a "hippie, niche" Tasmanian product arrived on the bourgeois high chairs of China.

A year earlier Tasmanian Pure Foods bought the then family-owned company, Bellamy's Organic, to thrust the idea of organic baby food onto East Asian consciousness.

Revenue at the company leapt from $3 million in 2007, to $29.5 million in 2013, and with turnover in 2014 tipped to exceed $50m, chief executive Laura McBain envisaged further growth.

"We understood there were only 200,000 babies born in Australia every year, compared to 20 million in China, so even if you have a large market share it's still pretty small," said Mrs McBain, whose plunge in the Chinese market was based on "gut instinct and feel".

Patience and tenacity has bred success in the most sensitive of export markets for the company, which "started off like a niche, crazy product and now we've evolved into a sophisticated mum's must have".

Dairy giant Fonterra's botulism scare last year, where New Zealand authorities recalled 1000 tonnes of dairy products across seven countries, reminded Mrs McBain of how brand equity could quickly deteriorate.

"Fonterra suffered huge damage, not as a company, but as a country in terms of reputation on food safety," said Mrs McBain, who fielded enquiries from concerned mothers at the time.

China's fastidious approach to food security hasn't impacted on Bellamy's because of the nature of their business.

"They (Chinese government) have a raft of measures to protect their citizens, their babies and their children. Pretty much everything on your nutritional panel is tested before you go in, which is time consuming and expensive, but something we are already set up for," she said.

However, Bellamy's Organic's eye-catching assault on the Chinese middle-class hasn't been without its challenges.

A shrinking pool of domestic producers sees the company importing the majority of its produce from overseas, with New Zealand, South American and European growers all now part of its intricate supply chain.

"We're looking for everything," she said. "There's been a dismal apple harvest this year … we've got to start thinking about where else can we go to."

A spokesperson for Australian Certified Organic, which certifies the bulk of organic growers in the country, said the organisation had 840 fruit and vegetable growers, but the demand for organic veg was unmet by supply.

Dairy is a source of concern for Mrs McBain as Tasmania has no large-scale organic milk producers, and the industry has shown little appetite so far.

"Frankly the organic dairy industry in Australia really doesn't deliver the volume we need to continue to grow," she said.

"It's a huge challenge for us. We're working and talking to a number of conventional farmers about the opportunity in converting to organic because there's a market at the other end."

An interlinked issue with organic dairy processing in Tasmania is the dearth of manufacturing options for infant milk formula.

Despite recent investment in processing facilities – Tasmanian Dairy Products' $75m factory at Smithton and Fonterra's $20 upgrade to its Spreyton and Wynyard sites – the State lags behind mainland manufacturers.

Tatura Milk Industries, Tatura, processes Bellamy's Organic infant milk formula, which avoids the exhaustive costs of Bass Strait transportation before it's sent to Asia.

Converting to organic is not simply a process; it's a mindset, according to Mrs McBain.

"Most organic producers we know do it for the love of the cows and the environment," she said.

"When we began we were a specialised product – no one understood what organic meant. The understanding and trust of organic has improved, but what organic means is still misunderstood – it's our air, water and soil," she said.

Aa

From the front page

Sponsored by