Heartland Apples

Heartland Group comprises four Nelson apple growers who are committed to growing apples people will love to eat, and they are incredibly passionate about their business apple Eve is theirs, and they invest in leading-edge research.

The four growers: Richard Hoddy, David Easton, Michael Thompson and Neil McCliskie, started out together in 1993 as an orchard monitoring group, which had eight growers.

At that stage Group 8 Horticulture employed local consultant Roy McCormick.

Four have stayed together, developing their businesses together more and more.

In 1994 the local market was deregulated, and they started marketing together in 1995, using the Yummy brand in the South Island. This was the result of the close association with the owners of the Yummy brand in the North Island.

Then in 1996 they formed a packhouse called Compass Fruit and closed down their individual packhouses to have one packhouse in Richmond.

Over the years theres been a process of consolidating resources, energy and effort, with a focus on differentiating their product based on eating quality.

In 2001 the export industry was deregulated.

In 1991 and 1992 there were massive frosts in Europe and a real shortage of apples, with prices sky-high for those two years.

All of a sudden investment advisors were doing the rounds in NZ telling people to get into apples.

As a result there was an explosion of people getting into the industry: numbers increased from a stable 400 to 1500 to 1600 growers. Now numbers are back again to 400.

We had people planting apples in all sorts of places, and the industry co-operative The Apple and Pear Marketing Board faced an explosion of participants and volumes.

Growers didnt have to put any capital into the business, they only had to plant their orchard and the Board had to sell their fruit.

Consequently, there were lots of problems flowing from these factors, and in 1996/1997 exchange rates were high and world apple production increased rapidly.

China came from nowhere in world production in 1980 to the biggest producer in the world by the mid 1990s, producing almost as much as the rest of the world put together.

There was too much volume, high exchange rates, big increases in numbers of people, and the single desk battled this, becoming the target for what was wrong in the industry.

But the problems werent confined to NZ: in 2000 in Washington they made a documentary about orchards being leveled and burnt.

All of that led to the industry being deregulated, and people thought they were better off to export by themselves.

For us the important thing about the single desk is the principle of farmers working together and taking the risk right to the market.

In apples the grower entrusts their fruit to an exporter, the exporter sells to a importer, the importer will sometimes sell to a distributor, the distributor sells to a retailer, the retailer sells to a consumer. All the people between the grower and the consumer take a cut and there is no margin left for the grower.

Our goal was to try and be responsible as far as we can, we back ourselves that our quality didnt need people to check on it all the time.

We try to do that as best we can. We try where possible to have a relationship with the final retail purchaser. Then you are not paying other people to do the job, and we get the message warts and all, theres no filter.

We react to what the consumer wants.

Now there are 400 growers in the industry again, and there are something like 60 or 70 exporters. Its a massive number for only 400 growers.

How do we judge success? Partly by sales and partly by reaction: when the industry is tough, one of the things that keeps us going is the feedback: it makes the work worthwhile, knowing that someone is ultimately enjoying eating our fruit.

We talk about bud to bud: from the bud in your orchard to your taste bud. This idea reflects the values of the group.

The Heartland Group is made up of four growers: Richard Hoddy, David Easton, Michael Thompson and Neil McCliskie. They started out together in 1993 as an orchard monitoring group, which had eight growers.

The four are all quite intense people, and very passionate about growing apples. Richard and David are third generation apple growers, Neil is second generation and Michael first.

If you go into a market together you have to share all the risks, and trust each other that they will not quit and give in when the going gets tough: and that reflects in the product.

The four of us grow 1.2million cartons. To put this into perspective, the NZ export this year is expected to be 15-16m cartons.

Of our harvest, 60% is exported and 40% is sold into the domestic market, mostly in the South Island and Eve into the North Island.

We employ 120 people in the packhouse, and 250 in the orchards in the peak of the season. During the year there are about 90 full time staff.

Eve is an apple with its own website: www.eve.co.nz.

David Easton found Eve by chance in his orchard: it is a sport of Braeburn. He trademarked the name Eve.

It started being exported as a sport of Braeburn, and there were plenty of different strains around, but at that time it was treated as a unique product. It was bundled up with other varieties and its special attributes were lost.

Even in 2000 it wasnt preferred for export. But we felt that it had different characteristics, and a real place in its own right. We started selling it here in NZ, and developed a process that means that the apple has found its own niche.

We focus on orchard management and storage, we call it cellaring, like wine. We apply the same concepts with the goal of turning out a product that has particular attributes and the customer can trust and rely on it.

By sticking to these principles slowly over the last eight or nine years we have increased our sales as consumer acceptance has expanded and as a result we are increasing the area of plantings of Eve.

Its all about adding value and having a point of difference. The product has to be bloody good, and there is no compromise on that. A lot of fruit that is picked and sold has to fit into the logistics channels: what we say is the logistics channels have to fit with the requirements of the fruit. There is no compromise for the fruit, and no short cuts.

We do things quite differently, we have quite a different process.

Then the next thing was to say; if you think it is good, and want some value out of it, how do we market it: so we only sell Eve though Foodstuffs. They never have to worry that someone else will compete with them.

Only very small amounts are exported because we dont have enough. We sell Eve for nine months of the year starting in late April.

Now 20% of our production is Eve. I would describe it as sweet, with a little bit of a tangy after-taste, with full strong flavor, and great crunch and texture, and its reliable. We dont get soft or mealy Eve!

If anyone does get a dud one we make the following offer to consumers: just ring us and we will send you a box of apples as a replacement.

We are craftsmen growers. Each time we are trying to put out our best fruit: it is not always exactly the same, but hopefully our effort means that the good is really good and the less than perfect are pretty darn good as well.

Now buyers are telling us that Eve just has to be on their supermarket shelves because people want it. Then we know there is a future for our business, we are producing something people really want. Even the families of other people we know in the industry are saying: dont buy anything but Eve.

We think our other apples are just as good but they are not trademarked.

Most apple growers dont know who buys their apples, let alone having a consumer email them back and say: I really enjoyed your apples.

For our overseas LuvYa brand, we get feedback through the website from people emailing us. This is a really important part of keeping the enthusiasm and drive going for us.

The other thing about our group is our madness about trying to do everything better. We contract Nagin Lalu from Crop and Food who is a post harvest specialist, and a world class guy to work for us.

He comes down from Auckland and spends two days every week with us through the harvest. He works with us to make sure we manage the fruit the best we can.

For years we had Roy McCormick, who was a MAF fruit specialist, work for us and push us to do a better job. We have brought Italian fruit specialists out to spend time with us in our orchards, and we work very closely with AgFirst, NZs leading horticultural advisory service. They have a lab and office on our packhouse site which helps the closeness of the relationship.

This is an example of the extra things we do as opposed to the standard. Another is that we are developing an

The problem with the apple industry is because we have so many seasonal staff and it is such a labour intensive industry, all the really smart people spend their time looking after others. We wanted to transfer the energy from them back into thinking about how to get the best out of the fruit.

We want to take away some of the menial work, and try and make peoples jobs more challenging and interesting. Hopefully we can then attract different sorts of people into the industry.

We hunted around for someone doing work in this area and found Steve Saunders working in kiwifruit in the Bay of Plenty.

He had picked up some of the work Rory Flemmer from Massey University had done around kiwifruit packing. Rory has won NZ Engineering Innovator of the Year in 2009.

A project began two years ago and now its getting close to being commercialized.

Rory (on a website) describes it as: This is a general purpose packer designed for apples but capable of packing other fruit. The prototype has packed apples in Nelson. It is the first of eight systems to be installed. Each unit can pack 150,000 apples in a 24 hour period or 18 million apples in an apple-packing season of about 120 days. The system accepts bulk apples, singulates them and then rotates each apple until its best side is uppermost while the axis of the apple is horizontal. It then places the apple with its axis aligned in the tray. It uses two proprietary robots and a sophisticated vision system to accomplish this.

The next phase to be developed will be grading: what is a blemish, what is russet, etc.