Comvita chief executive David Banfield. Photo / Matt Crawford
Natural health products provider Comvita was recently one of 26 exhibitors named as an exemplar at the prestigious China International Import Expo (CIIE) in Shanghai.
There were 3400 exhibitors across different sectors spread around eight halls, including 289 Fortune 500 companies.
Comvita lined up with the likes of French pharmaceutical multi-national Sanofi, Australian natural health company Blackmores, global imaging firm Electra Sweden and Dutch/Germany wholesaler Makro Cash & Carry as an exemplar.
About 1000 food brands were represented at the expo — and Comvita was the only New Zealand company to receive the award.
“It was a great privilege to be one of 26 called forward,” Comvita chief executive David Banfield said. “It shows how far we have come and how we are considered by discerning Chinese consumers. We are a high-profile, premium brand in China.”
For the year ending June, Bay of Plenty-based Comvita passed $100 million in sales for the first time in Greater China (moving from $77m to $109m) with its mānuka honey, olive leaf and propolis functional food products.
Revenue increased 12 per cent to a record $234 million, and operating profit rose 18.7 per cent to $24m. Comvita delivered strong gross margins in line with its plan.
The e-commerce’s share of total sales nearly doubled from 23 per cent to 42 per cent. “This gives us the data that helps us produce the products and services consumers need,” Banfield said.
Comvita is on track to hit operating earnings (Ebitda) of $50m and a net profit of more than $20m when it celebrates 50 years of business in 2025.
Its efforts have been recognised as the winner of the Best Growth category in the Deloitte Top 200 awards.
Judge Ross George says Comvita’s recent transformation programme focused on sustainability and storytelling, which helped consumers connect with the brand and secured rapid growth for the company.
“Customers embraced Comvita as a premium natural health and wellness brand, enabling the company to target range expansion and product premiumisation,” George said.
Banfield, who joined Comvita in January 2020, said the company had then lost its way. There were too many products and a lack of focus in the organisation.
“We said: Here’s our focus. We cut the product count in half according to consumer demand. We focused on the right consumer in the right market with the right products and (distribution) channels.
“Central to everything was the uniqueness of our business model. We invested $30.5m in our brand by telling our story, which is very compelling. On the second day in the job, I went to China to meet with our 200-strong team. That was the day Wuhan closed (because of Covid-19). Working alongside customers and partners on the ground to build relationships is very important to us.”
Comvita is the second biggest employer in China from New Zealand, behind Fonterra. “Of course, we are there to grow market share but we are also there as a B Corp organisation making a social and environmental impact,” Banfield said.
In July, Comvita bought retailer HoneyWorld Singapore, increasing the company’s manuka honey market share there to 50 per cent. “Singapore is one of Asia’s premium growth markets and a pivotal marketplace for us.
“Overall, I’m delighted with the progress we are making. We are privileged that discerning consumers are making our brand a choice for personal health and wellness.”
Finalist: Scales Corporation
Diversified agribusiness Scales Corp is making strong expansion moves, putting the impact of Cyclone Gabrielle far behind it.
Scales has introduced two new Mr Apple varieties, Posy and Dazzle — two of the sweetest and reddest around — for Asia as it aims to grow market share.
Andy Borland, managing director of Scales, said: “we bred the new varieties to suit the Asian taste palate. The redder they get the better. We’ve also got another new one coming on but we haven’t given it a name yet”.
“The market demand is driving us to invest in technology and grow more. And we are getting good pricing. We need that to offset increasing costs.”
China is the biggest market for Mr Apple but Vietnam, Thailand, Malaysia and Singapore are also popular, as are the Middle East and Australia.
Scales-owned Mr Apple exports 25 per cent of the country’s apple crop and sent 3.3 million tray cartons of its own grown fruit overseas last year. For the current year ending December, the export volume is expected to be 2.7m because of Cyclone Gabrielle.
Borland explains: “We lost nearly 25 per cent of the fruit in the flooding and that takes the shine off.
“We didn’t lose too many permanents — 5 per cent of the orchards were right in the torrent — and we handed the leased orchards back to the owners.
“When you have a setback you just have to reset and carry on. The apple trees are bouncing back well.”
Judge Ross George said despite its horticulture division facing significant challenges, Scales managed to deliver an underlying profit of $14.3m for the six months ending June (based on revenue of $309.37)
The company responded swiftly to the cyclone disaster, resuming operations and recovering and re-seeding damaged orchards, George said. With a well-rounded growth strategy and diverse portfolio, it managed to largely mitigate the risks associated with a single industry.
Scales, founded in 1897 with its historic freighting and logistics business, sees strong growth in its global proteins division, supplying ingredients to petfood manufacturers around the world.
“The tide is rising on growth opportunities in proteins across the globe,” Borland said. “People are taking on more pets — it was a big move during Covid. We see it as an exciting opportunity.”
Scales has formed a joint venture with Esro Petfood to increase its presence in Europe on top of its major markets in the United States, Australia and Southeast Asia.
The joint venture is presently converting a processing plant in Belgium for ingredients such as offal and beef cheeks, and will be looking at a second plant, possibly in Ireland.
Scales owns a processing plant in Amarillo, Texas, and uses four other toll processors in the US to produce beef and pork ingredients, and wants to move into poultry and fish as well. Scales has also opened a processing plant in Melbourne with capacity for 30,000 tonnes.
“Our return on capital focus is very clearly on the global proteins business,” Borland said.
Finalist: Heartland Bank
Heartland Bank may lack the size of its major competitors in New Zealand and Australia but it has found a way to operate just like a big bank and make an impact.
“There are banks more significant in size than us but we can replicate scale through the use of digital services,” bank chief executive Leanne Lazarus said.
“When I look at the growth, the key enabler is the technology changes. We have a strong commitment to digitisation and to create a quick and hassle-free service that continues to deliver good customer outcomes.”
Heartland, which has a staff of 535, developed an online automated lending platform — its home loans grew 14.1 per cent last year — and enhanced its website and mobile app to provide more flexibility.
“We have upgraded our core banking system and use it as an interface into the mobile app and other lending platforms,” Lazarus said. “For instance, we have encouraged dealer partners to look at digital capabilities for motor vehicle finance.”
Lazarus said a measure of Heartland’s efficiency was a cost-to-income ratio of 42 per cent — “that’s similar to the major Australian banks.”
For the year ending June, Heartland Group increased revenue 6.6 per cent to $285.31m and net profit was up 0.8 per cent to $95.86m. It is a leader in reverse mortgages, with growth of 23.2 per cent in New Zealand and 20.7 per cent in Australia.
George said Heartland focuses its growth strategy on areas that other banks tend to pass over. It’s taken a diversified approach, specialising in an array of lending categories including personal, vehicle, small business, mortgages and livestock finance.
“Heartland has seen growth in key areas like reverse mortgages, rural and business lending — indicative of the strategic emphasis it has placed on high-potential segments.”
George said Heartland was also committed to expanding into new markets and geographical locations and establishing stronger customer self-service and digitalisation to keep pace with other key players.
Heartland has completed the integration of livestock financier StockCo Australia into its group and is awaiting regulatory approval to purchase Australian Challenger Bank, established in 1971.
Heartland’s history stretches back to 1875 when it began as the Ashburton Permanent Building & Investment Society. In 2011, Heartland was formed through the merger of CBS Canterbury, Marac Finance, Southern Cross Building Society and PGG Wrightson Finance.
This year Heartland was named the Canstar NZ Bank of the Year Savings for the sixth consecutive time — an award that recognises the financial institution providing the strongest combination of products, services and distribution networks.
“The key to all of this is working with customers and delivering good outcomes,” Lazarus said.
“We are seeing heightened competition from the major banks and we will continue to be proactive and dynamic in the competitive environment.
“We have a very high retention rate with existing depositors and this comes back to the ease of working with Heartland, as well as competitive pricing.”
· The Best Growth Strategy award is sponsored by 2degrees.
Industrial projects dominate new supply, the study found, comprising 65% of new stock.