BUSINESS: by Jeffry Babb News Weekly
Selling wholesome food to Australia's homes
, September 22, 2001
Unless you look closely, you probably won't notice just how many things Ward McKenzie produce that are in your kitchen.
The list is long - herbs and spices, baking powder, many varieties of beans, desiccated coconut, soup mix, pearl barley, dried fruit and much more, under the Ward's, McKenzie's and generic brand lines.
"People look to our products as value for money. They appeal mainly to the traditional homemakers section of the grocery market," says Steve Ward, joint managing director and direct descendent of the founder.
Take old favourites like tapioca, also known as sago. A packet of sago, for a few dollars, can last the average family for several dessert meals. But sometimes supermarkets are reluctant to stock sago these days, because it is a "slow mover."
Ward McKenzie is a family company. Like all long-established companies it has had its ups and downs, but even - or especially - in hard times, shoppers and homemakers seek out its products. Ward McKenzie has supplied Australian troops in times of conflict with good, wholesome homegrown food.
The firm has been in business for over 100 years, starting out as a supplier of chaff when horses were the main means of transportation, then moving into other lines as times changed. Now situated in the outer Melbourne suburb of Altona, Ward McKenzie has kept up with the times and has led the Australian packaged foods industry in introducing new technology.
Much has changed since Ward McKenzie started in business. One of the most profound changes has been in the marketing and distribution of foodstuffs through supermarkets. Shelf battle
Supermarkets have all but displaced the corner store as a source of staple foods, and with a national market, the firm must be able to supply its products nationwide. With limited room, it's a battle for manufacturers just to get shelf space. However, Ward's products are found in almost all big supermarkets.
While they have competitors, Steve Ward says that the whole industry is much more co-operative these days than in times past.
Although Ward's food is definitely healthy, its main competitor, Sanitarium, concentrates more on health foods and is in a different section of the supermarket.
Wherever possible, Ward McKenzie sources its raw materials locally. The company buys over 40,000 tons of peas, lentils and other grains annually, dealing with 800 to 1,000 growers directly. The farmers are mainly in Victoria's Wimmera and Mallee districts.
Over the last 10 years, Ward McKenzie have helped develop the lentil industry in Australia, assisting The Lentil Company to grow and develop these products in Australia. Formerly, all Australia's lentils were imported. Now, a thriving export trade in lentils exists.
"We have been dealing direct with farmers for over 100 years. When they deal with Wards, they know they will get paid," says Steve Ward - no idle boast in the current climate.
As a family company, Ward McKenzie doesn't have the same access to capital that larger local or international publicly listed companies have. They have to be prudent about deciding where to put their money. And in times past, the banks haven't always been sympathetic.
Wards now has a thriving trading and wholesale division and exports have doubled over the last three years.
But it's not all plain sailing. Over the past year, Ward McKenzie have had to cope with a drastically falling Australian dollar, genetically modified organisms (GM) issues, wild swings in commodity prices and the introduction of the GST - a nightmare for food processors, who have an administrative headache over the exclusion of some food items from the GST.
Steve Ward says that business has changed over the last few years. "Business is more co-operative - suppliers, manufacturers and producers are more likely to work together, rather than cut each other's throats, says Ward. "We work together to arrive at solutions to problems," says Ward.
The threat to basic foodstuff suppliers like Ward McKenzie comes from changing social attitudes.
"We're not fancy," says Steve Ward. "We concentrate on cleanliness and quality, and offer value for money. Some lines, like baking powder, take off, while others die for no apparent reason."
The last three years, says Ward, have been relatively flat for the food packaging business.
"People are eating out more. A family can live economically on our food, but it takes longer to prepare. People have less time - or less inclination - to prepare food at home. Some new apartments in inner city development projects don't even have kitchens," says Ward.