In clever business hands driven by a green philosophical approach New Zealanders should see organic food and products become more available and much more affordable.
Peter Kraus, head of PK Group has long held green interests, maintaining significant organic gardens and orchards on his own property. He also has other arenas of interest – he holds a Masters in Philosophy from Auckland University (1991), and funds scholarships in Philosophy through the University.
Through the PK Group he has made a significant investment in New Zealand’s organic sector. PK Group has had a financial interest in ecostore since early 2000, and bought the entire company in 2013. Other important additions to the Group include Huckleberry Farms (organic store, 1995) and Chantal Organics (wholesale business 2016), signalling the serious and astute business approach now being applied to our organic sector. The acquisition of these flagship organic/eco businesses is already having an impact.
The Kraus family emigrated from Germany to New Zealand in 1988 to what they saw as a cleaner, greener, place. Pablo, Peter’s son, grew up here, and then trained in digital interactive technology at Vancouver Film School. Now, at 30, he is managing director of ecostore, having first managed Huckleberry and Chantal Organics after the ownership changes.
“I have been living organic for a long time,” says Pablo Kraus. “Having children however, was the point at which it came to the forefront of my life.” He wanted to ensure his children’s food, and the household’s soap, cleaning products and so on had no nasty chemicals in them.
“Ultimately becoming a parent makes all these things seem so much more important than before. I’ve lost count of the parents to whom I’ve spoken that started using organic fruit and veges to mash for their babies’ first food.”
PK Group hired Richard Lees to lead Huckleberry two and a half years ago, when he was quite new to organics. Today it would be difficult to find anyone more knowledgeable about how the sector works and all the disparate parts that make it up. Lees’ focus is on expanding the sector by discerning where the gaps are, such as inconsistent supply of produce, and addressing them.
Astute management will produce extraordinary business opportunities for PK Group, and make a wider range of high quality produce and goods available to many more people. The PK Group would love to own 400 stores nationwide and sit alongside Countdown and Pak’n’Save or in fact be the preferred shopping choice. They’ve made a good start with Huckleberry Farms now operating twelve stores, a substantial increase over the two stores they operated two years ago.
One of PK Group’s recent acquisitions under the Huckleberry Farms flag is Wild Earth Organics in Tauranga, which retains its name and continues to trade with the original owners at the helm. Your docket states Huckleberry, and as soon as the systems are in place, customers will also be awarded Huckleberry loyalty points, but otherwise you might not know you were shopping with them.
“There’s wisdom in retaining the name people know and their relationships with local suppliers which have worked for the owners for a long time,” says Lees. “Why break something that’s working? We’ve taken the arduous administration away so the operators can concentrate on what they do best. They know their market better than we do.”
Huckleberry stores have been rebranded, and the older stores updated with new fixtures and a refreshed look.
“The new smaller stores offer a more personal shopping experience,” says Lees, “and concentrate on local regular customers who come in looking for top-up items and convenience. The fit-out is more modern and appeals to new mainstream organic shoppers. We also regularly add new products and present them in a contemporary way.”
PK Group is putting its money where its mouth is in making changes. Ecostore’s main Auckland shop sports a solar array on the roof, and it’s packaging is now sugar-cane based rather than petroleum derived. It was an expensive choice for the Group to make and they’ve compensated in part by thinning the packaging walls, but insist the cost is worth it.
One positive effect of the PK Group’s business activities is to stimulate the growing of organic produce by guaranteeing purchase of everything a grower produces. The grower no longer has the worries of finding a market, transport to market, and uncertainty of price, and can get on with growing quality produce. Produce supply in general can be sketchy however, especially for beef, lamb, and specialty products, since suppliers are often small operators and not always able to keep up with demand.
“There’s no point in all growers producing carrots.” says Lees. “We already have good carrot producers, but where holes in supply exist we can invite growers to meet that demand.
“Purchasing guaranteed volume means we can consistently supply our customers, and in time encourage growers to convert more land to organic production. We’re aware currently of over 100 hectares of certified organic production land which hasn’t been developed because a viable market channel hasn’t existed for the produce.”
Various government bodies, says Lees, have become concerned by the very real risk of New Zealand losing its global clean, green status because of certain ‘conventional’ agricultural practices. He says that government is beginning to recognise the links between organics and our clean, green image, and that the image is inherently tied to the organic sector.
Globally, the swing towards organics is consumer driven. More and more people want to know what’s in their food, precipitated in part by an awareness of environmental concerns, and the rise in awareness of serious illnesses. Four hundred million Chinese are tagged as green consumers – not necessarily organic, but preferring for instance an eco-light bulb because it lasts longer, is more energy efficient and cheaper on living expenses. People want to make the right purchase for the environment, however when faced with a choice of products, unless those products also deliver on personal benefits, consumers may still make an environmentally unfriendly selection.
Critical mass will support better affordability. In Europe four hundred million consumers consistently buoy the market, but New Zealand is still climbing towards critical mass, and although there’s unprecedented demand for organic product, consumer conversion is relatively slow.
“Once affordability is assured,” says Lees, “there’ll be great value in organics, but right now we’re obliged to engage in massive investment at the front end. The PK Group hopes to see significant changes in consumer habits over the next five to ten years. I’ve seen huge maturation in the sector in the two and half years I’ve been involved, and the sense of a common goal is starting to happen.”
Copyright Theresa Sjoquist 2018
First published in Organic NZ (Jan/Feb 2018) Vol 77 No.1 – https://www.organicnz.org.nz
Theresa Sjoquist
Bioforce
Daily Organics
Theresa Sjoquist
