David Irving, The Ice House

Episode 1: David Irving

Roger: My guest this week is David Irving. David retired as CEO and Area Director of Heinz/ Wattie Australasia in 1997. Hes currently Executive Director of Hubbard Foods, and share holder of Cablebay Wines. In his role as Adjunct Professor at the Auckland University Business School, David led the establishment of a Business Learning centre, The Icehouse.

David, what is the Icehouse? Whats it offering? Whats the need for farmers to go to business school?

David: Well, the Icehouse is something that started in the year 2001. Its a business learning centre. It addresses the needs of smaller, medium size businesses - in particular the owner /managers of those businesses. NZs losing a lot of their bigger businesses, theyre going off shore, their decisions are being made off shore. This country now really depends on the performance of the SMS sector, the smaller to medium sized sector. And the agricultural sector are a colossal contributor to the performance of NZ. and if we can really have our farmers improve their business performance, then NZ, and the opportunity for economic wealth in this country, would significantly improve.

Roger: Its a long way perhaps from your more traditional on-farm learning. How do you get a farmer to think about the farming as a business rather than as an activity?

David: Typically, the farming, the business model of the farm, is actually a very high investment with it going up all the time and everyone pleased about that. But the relationship of earnings to that investment is typically low. So the return on investment of the farm is typically much lower than businesses would accept.

Roger: But I know what a lot of farmers would say; Im not in control of the weather or the exchange rate. How do you get farmers to deal with that sort of side of the business?

David: The farmer will say those things. The sense of not being in control, in farming is a particularly strong sense. But we say, find the cost and find the revenue that you can get in control. Let me give you of an example thats totally the opposite to what a typical farming model is where the person got totally in control with no investment. And that was Kim Crawford with Crawford Wines. He didnt own a winery, he didnt own grapes, he didnt own distribution. The only thing he owned was a brand. And so his only investment was a brand and he distributed wine through a distributor, particularly into Canada. And a few years ago now, I think he sold that business for 14 million, without any investment. So when a farmer says to me and says, Ive got nothing under my control, I would say, think again about areas that you could get under your control and turn that into higher earnings than youve currently got.

Roger: David, these ideas about branding getting involved in marketing, where does a farmer whos already busy, find time to think about this sort of thing?

David: Well, its always easier to do the most urgent thing. And its always easier to do what you did last Monday, on the next Monday. So you get on your tractor on Monday morning and you do your tractor thing. But what people dont do, dont spend their time on, is the important things that are un-urgent. And an important thing would be your business plan. Thats something you dont have to do, but if you do do it youll start to think about how can I get my earnings up. Now Jim Wattie in 1934 looked at waste fruit lying on the ground, in Hawkes Bay, the fruit orchards, and said the simple three or four words, somethings got to be done about this, and 50, 60 years on thats a billion dollar business. Now, weve got to have more Kiwi farmers look at things like Jim Wattie did, and say, something can be done about this and theyll create brands and wealth they never imagined.