Business

Covid could put NZ horticulture out in front

T&G has had to innovate fast to overcome upheavals caused by the Covid-19 crisis, but the abrupt changes have seen some benefits too, chief executive Gareth Edgecombe tells Rod Oram 

The start of lockdown in late March couldn’t have come at a worse time for T&G Global. It was peak season for harvesting, packing and shipping its produce, particularly apples, its main crop, to consumers at home and abroad.

Deemed an essential service it was fully open for business. But it had to innovate fast to overcome upheavals caused by the Covid-19 crisis.

“Right from day one all of our main operations have continued,” says Gareth Edgecombe, its chief executive. “But significant change, and the abruptness of change, was a lot to get used to. We had quite a drop in productivity initially but we found ways to improve it.”

Worried that normal container shipping services might be disrupted, for example, T&G made its first-ever ship charter. The vessel, loaded with containers of apples it picked up at Nelson and Napier, is on its way to Europe now. The shipping cost per carton is slightly higher than scheduled container services, but chartering is bringing supply chain benefits which T&G will explore for next season.

Responding to the crisis, T&G’s 3000 staff here and aboard have become better connected and more engaged, Edgecombe says. They’ve learnt now to “cut to the centre of issues quickly,” to make and act on decisions with less than full information, and to meet short-term demands while working on longer term needs of the business.

“The great discovery for us is how remarkable the benefits have been to productivity, connection and moving the business forward.” Staff and company are determined to build on these gains in pace and agility as life becomes somewhat less pressured, he says.

One aspect of lockdown timing worked in T&G’s favour, however. The 400 or so people it had hired overseas to help with its harvests under the government’s Registered Seasonal Employer programme had already landed here before the lockdown began.

Now the apple harvest is almost over, some of them would be heading home if overseas travel was allowed. Instead, T&G is finding them other work and continuing to house them. It is also helping them deal with anxieties such as how and when they’ll get home and if they will have savings left when they do.

But by mid-June T&G’s extra work will run out. “We need a solution by then, and we're working closely with the authorities on that.”

Initially, though, harvest and packhouse work was disrupted by the need to allow staff considered vulnerable to the virus because of age or underlying health conditions to stay at home.

“That drastically changed our workforce composition in a very short period of time. So during that first couple of weeks, we had to do a lot of juggling, and then go back to fill those gaps. Generally, we've been able to manage without any significant impact on our harvest.”

Looking ahead to next year’s harvest, Edgecombe says higher local unemployment will add a new factor. “We want to be part of that dialogue of the RSEs in supporting MFAT’s help to the Pacific economies, while being mindful that local New Zealanders need work too.”

Edgecombe is keenly aware of another escalating issue at home. “I think consumers are going to be under a lot of pressure in a number of ways long, long beyond Level 2 and Level 1.”

Food security and access is one example. “We're seeing a ramp up of requests to assist with food banks and city missions. We've been working with them but a fundamental whole of government and whole of industry response is needed to help vulnerable New Zealanders.”

T&G began its Covid journey in late February when it saw changes in its fruit markets in the US and Europe. In response, it started sharing market insights and Covid information and protocols with BayWa, its German parent company.

“New Zealand generally has had more rigid and stricter protocols [than the Europeans] and we made sure we had very good documentation and processes.” T&G shared those and the likes of signage for hygiene and distancing with BayWa. “They said it helped them frame their thinking on how to handle the issues.”

T&G had the technology for remote working of its office staff “but we hadn't really embraced digital working in a fundamental way. Of course, working from home forced that on us from day one. We've lost some of the interpersonal connection and some of the creativity that comes from [in-person] meetings. But having larger groups of people in shorter, punchier conversations has made them more engaged and productive.”

The communications technology is also working well with stakeholders such as growers and customers at home and with T&G’s growing, marketing and retail partners overseas. “Where we've got important market development initiatives overseas, we've got teams on the ground. We're not reliant on traveling.”

But the long wait for a resumption of international travel could have an impact on offshore business development and mergers and acquisitions. “We’re slow walking those potential initiatives, although we think we can move on some of them without traveling.”

New Zealand’s got a lot to offer. “We have always been well set to sell premium horticulture. We've got superior genetics, very good growing systems, a trusted country brand, sustainability, and consumption of premium fruit is booming among middle class Asians,” Edgecombe says.

“This crisis is going to accelerate the role of New Zealand in the world.”

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