Food for the future
Murray River Organics is Australia’s largest grower and producer of premium organic dried vine fruit – and they got there by being passionate about what they do. Since 1970, when founder George Nemtsas purchased a block of land in North Eastern Victoria, the company has operated based on a belief that high quality fruit should be safe to eat and share with loved ones, and is best produced the traditional way, i.e. without chemicals pesticides and growth hormones.
Over the years, the Nemtsas family has produced some of Australia’s finest organic dried vine fruit from their family farms. When George retired, his son Jamie – who has grown up “living and breathing organic farming” – wanted to preserve the farms and their high quality organic products. To do that, he acquired the properties with his business partner, Erling Sorensen.
“We’ve known each other for the past 15 or so years,” says Erling, now a Director at the company. “We first started a business together in late 2010, the Centre for Investor Education, which facilitates thought leadership and provides investment training to Australian superannuation funds. Later on, we started a wealth management firm, Sornem Private Wealth, which provides families and individuals throughout Australia with advice to assist them in protecting, managing and growing their wealth.”
“A couple of years ago Jamie told me his parents were looking to sell up the farm he grew up on, and he wasn’t so keen on seeing it leave the family’s hands,” explains Erling. “We looked at it, analysed the state of the industry, and then decided to buy.”
Together, Jamie and Erling began working to ensure that Murray River Organics had the infrastructure in place to maintain the company’s market-leading position in Australia. They acquired similar assets in the region, commissioned a processing plant, and earlier this year they bought their own warehouse facility.
Being the largest organic grower
Murray River Organics currently is focused on organic dried vine fruit products, ranging from its globally unique sun muscats, sultanas, and currants. In addition Murray River Organics produce a variety of muscatel clusters– which, according to Erling, Asia has an overwhelming demand for. The company’s product are used both by the wholesale market, by bakeries and it is purchased for both snacking by supermarkets and by high-end hotels, as well as for serving with cheese platters.
Most of Murray River Organics’ products are exported overseas – to countries including Taiwan, Japan, Korea, Thailand, China, Italy, the United States, France, and in the near future, Singapore. At the same time, the company is working towards getting more of their products on the shelves of the Australian supermarkets under its new retail brand, “Gobble” which is a tremendous success overseas.
“Gobble epitomise everything that is Australian. It’s unique, healthy, easy, fun, colourful, exceptional quality and affordable,” says Erling. “None of the Australian supermarkets provide an offering of Australian grown and produced organic dried vine fruit. As Gobble is price-competitive with the conventional, often imported, product range available on the shelves at the moment, we are surprised that only major supermarkets overseas have chosen to work with us till now.”
According to Erling, there’s a growing demand for safe, healthy wholesome food worldwide. And no matter what country they are catering to, Murray River Organics is the best choice to meet that demand due to their reliable volume and the quality of their produce.
“There’s no-one else who does what we do,” he says. “We’re the largest producer of organic dried vine fruit in Australia. There’s a global move towards eating organically, eating more healthily, avoiding any chemical interference with food products – so it’s large long-term macro themes like that driving the higher push for food that’s good for you, that’s healthy, whilst also being affordable.”
Numerous research confirms that the number of consumers globally is increasing and they are becoming more discerning than ever when it comes to food because they’re older, more affluent, and more selective. In the western world, in much the same way that they drove the physical-fitness trend in the 1980s, baby boomers are trying to eat healthier as they approach their senior years, consuming more “functional foods” – foods with a potentially positive effect on health.
Near the other end of the lifespan spectrum are millennials (those born after 1980), who are as much, if not more, health conscious as previous generations. Millennials are beginning to enter their peak earning years, and affluent millennials are much more likely to buy natural and organic products than their predecessors were. They’re also much more likely to have a brand preference for those purchases, according to a survey by research firms Jeffries and Alix Partners.
Together, baby boomers and millennials have popularized a new way of looking at food. Shoppers are taking into account environmental concerns, fair labor practices, and food safety as well. For many consumers, it’s a lifestyle choice that says as much about them as the clothes they wear and the car they drive. Indeed, the trend toward healthier or more conspicuous styles of eating is considered a full-fledged movement that, among other things, has inspired the word “foodies,” coined to describe those who really do live to eat and aspire to a higher state of eating, so to speak.
The trend toward eating healthy food, being conscious about how and where it was produced as well knowing that the environmental footprint from producing it does not impact on the ability to feed future generations is one that is rapidly spreading from the Western world to most developing markets with large number of increasingly affluent consumers emerging.
Sales in the US organic-food industry have grown steadily from US$3.5 billion in 1996 to US$31.5 billion in 2011. Most recently, from 2010 to 2011 the industry grew at a 9.5% rate, compared with about a 5% growth rate from 2005 to 2009. The US organic food industry should generate a growth rate of more than 12% over the next two years, according to research firm RNCOS Institute. The Organic Trade Association says that 78% of US families are choosing organic foods, however organic foods is currently only accounting for just 4.2% of all US food purchases.
“On the back of these well researched macro trends there’s also a significant increase in demand from investors for Australian agriculture. We believe we are well placed to meet that demand,” says Erling.
Beyond that, Murray River Organics is set apart by its focus on customer service – which can unfortunately be an afterthought in their industry. Jamie and Erling are experienced enough to bring a level of professionalism to the table that few industry businesses can match.
“We do what we say and we say what we do,” Erling says. “That’s really what it boils down to. If we commit to a customer, we commit to them for good. We keep it very personal with customers but we’re also very professional in our approach. We think that when customers interact with organic businesses, it’s rare that it’s done in a business-like manner.”
“Typically, organic businesses are quite small – they don’t have the capacity or the background to be run as a professional business, and we think that we do,” he continues. “We’ve got a long history in finance and in running businesses, and we’ve put some of those skills to use in managing the farms, the plant and in customer relationships.”
Despite still being a relatively young company, Murray River Organics has built up a significant customer base in overseas markets. That fact speaks to their exceptional customer service, and is a good sign for the future of the company.
Murray River Organics also fosters strong relationships internally. According to Erling, they go out of their way to form close ties with their whole team – which consists of roughly 60 people, including all farm and plant staff.
“Everything’s very flat, it’s all run by Jamie and me,” says Erling. “Then we’ve got a head of sales, Mark, a head of the farms, Andrew, and a head of the plant, Daniel – each of the three managers has their own area of accountability and as a team they operate the whole business. But Jamie and I know all the employees, the products, the processes and the customers.”
Erling adds that the skill and knowledge of these employees is “paramount” to generating good organic produce. He credits the company’s continued success to their hard work.
“Having good people is everything,” he says. “It’s very important for us to only employ the best. We’re employing some young, graduate level people now, as well – we’re looking to do that out of the local talent pool, in the area of our production facilities, because we want to make sure we support the local communities. We see that’s something very few organisations have done of late, and we see the areas we operate in could certainly do with some more support and better opportunities.”
Finally, Murray River Organics also fosters strong ties with their suppliers – though they like to act as their own suppliers when possible.
“We’re trying to get as vertically integrated as we possibly can be, across the vast majority of the value chain,” Erling explains. “We still have a range of suppliers from freight suppliers through to some packaging suppliers and so on, and they’re good relationships – we run a tight ship and we don’t want to pay anyone too much. At the same time we also would like to deal with parties on an ongoing basis, we’re not here to drive anyone out of business either.”
At the 2013 Governor of Victoria Export Awards, Murray River Organics’ commitment to producing and exporting organic food was recognised with an award in the Agribusiness category.
“It’s a valuable recognition to us,” says Erling. “It’s a kudos to the team – it’s something they’ve been able to deliver to the business, and it motivates them to work even harder.”
“It wasn’t something we had always set out to achieve,” he continues. “We don’t run a business to win awards, we run it to be sustainable, for future generations, and to provide good product to our customers over a very long period of time, so I think the award is just an outcome of that.”
Erling credits the award recognition, at least in part, to the company’s ability to provide quality assurance.
“It’s a philosophy that we deeply believe in and that we’re passionate about,” he explains. “On our farms we have strict processes and people who have farmed organically since the inception of organic farming in Australia. Jamie and I both have young families and we know the impact of eating food that has been chemically treated or that has been in contact with chemicals, we know the damaging impact that can have on food.”
“And it’s something we think our customers would benefit from,” he continues. “For that reason, we work closely with the Australian Certified Organic organisation to ensure that our processes are best practice, across all our farms and our plant. In addition, we run a higher level of quality control at our processing plant than any of our competitors – we’ve got metal detectors, several visual inspection points, lasers and X-rays. We take the stance that quality is something that we just don’t want to compromise on.”
Moving forward, Erling says Murray River Organics will continue to maintain their high level of quality, while continuing to build up its production capacity.
“We will most likely be doubling our production over the next 24 months,” he explains. “And then we will look to expand our product range under the Gobble brand to include other healthy snacking products, such as for example organic muesli and muesli bars. After this, we will just continue to focus on delivering good products at a superior quality with a reliable consistency.”
“We are fortunate in that owning a range of different businesses allows us to provide trustees of Australia’s superannuation funds with investment training, and mums and dads with financial advice,” Erling says. “And now providing food that’s healthy and sustainable to future generations, to our children, it makes us go to work every day full of energy and with a big smile on our face. “
“It’s just something we enjoy doing tremendously,” he concludes.
For more information, please visit their website at: Murray River Organics