Kiwis seem to be opting for more pre-packaged salads over deli pottles in the economic crunch, says struggling salad producer. Photo / 123rf
Kiwis seem to be opting for more pre-packaged salads over deli pottles in the economic crunch, says struggling salad producer. Photo / 123rf
One of New Zealand’s biggest prepared-salad producers is readying for its second restructure within six months as it struggles to break-even in the sluggish economy.
Speirs Foods posted a loss before interest of $316,000 in the first half of the 2025 financial year (a $342,000 loss inthe previous corresponding period), which it partly attributes to reduced consumer demand and a shift by shoppers from deli salads to pre-packaged offerings.
Speirs produces deli salads in bulk and pre-packaged salads, the latter more labour intensive and requiring higher cost raw materials.
Speirs Foods is the main operation of the USX-listed Speirs Group, which recorded a half year total loss of $527,000. In the previous corresponding period the loss was $626,000. The overall loss to ordinary shareholders of the group was $363,000.
Newly appointed group managing director Craig Tucker said the next restructure was likely to be “significantly greater” than adjustments to the business made last year.
Speirs Foods is the biggest employer in the Rangitikei district’s town of Marton.
Tucker said directors were “extremely conscious” of the important part it plays in the town but the company’s half-year financial results told their own story.
“It’s plainly obvious... based on the numbers... that we’re not going to pull this business back into a break-even position without some serious removal of cost.”
The company presently employs 73 people but they’re on reduced hours due to the plant only running to fill orders. A year to 18 months ago, it employed around 10 more staff than this.
Speirs Foods may seek to cut its salad product procurement costs as one way to relieve pressure. Photo / 123rf
Tucker, a director since August 2023, was appointed managing director in December when the chief executive role was made redundant as part of a restructuring.
He said directors, long-term investors in the business, were committed to trading out of the situation.
In its half year report, the company said it expected continued difficult trading conditions in the next months.
“The start of the year would suggest economic activity is not going to recover anytime soon,” Tucker said.
“We’ve had a tough start to the calendar year, we are behind where we were this time last year. Christmas (trade) wasn’t the level of last Christmas and I don’t see any signs yet of any immediate recovery.
“That would suggest we have to work harder in terms of removal of costs from the business.”
Tucker said one opportunity was reducing costs in produce procurement.
“There are areas where we can be more aggressive in our own negotiations through our supplier base. We buy a lot of produce, we buy a lot of cabbages.
“In good times, businesses tend to ignore some little details, ignore some of the cost creep. We’ve got to be all over that, make enough adjustments without resorting to what is often a knee jerk reaction of cutting people out of the business.”
Tucker said he wouldn’t describe the business, which has its roots in the former Speirs Timber founded a century ago, as being in peril, but was “nervous” about sustainable profit growth without several things happening.
“A material economic recovery first and foremost; a regional kind of recovery with the availability of people and skills in the region; and a change within the market in terms of offered opportunity.”
Opportunity could come in the shape of a third supermarket chain, or the entry to the provinces of produce providers such as Wellington’s Moore Wilson or Auckland’s Farro Foods, or school lunch services.
Tucker said supermarkets appeared to be reacting to the economic conditions in their purchase decisions and while it was anecdotal, the reason for the shift to pre-packaged salads appeared to be consumers wanting to cut waste.
Tucker said “absolutely it would be a better situation for Speirs Foods and many businesses like us” if there were more supermarket players.
“It’s the nature of dealing with the supermarket chains that without question they are aggressive negotiators. They drive a hard bargain.
“They’re not easy customers to deal with but they provide a channel to the consumer that Speirs wouldn’t be able to replicate on its own.”
Asked if the two supermarket chains had got more aggressive with Speirs since its financial situation worsened, Tucker said “no, (but) they are aggressive negotiators”.
In its half year report, Speirs also blamed higher raw material costs due to inflation; a lack of availability of some key components resulting in the need to source higher cost alternatives; continuing pressure on skilled labour availability; the increase in the minimum wage.
The report said it wasn’t always possible to pass on price increases to the customers.
In May last year, the group sold its equipment, leasing and finance business.
