JUST GOOD BUSINESS CASE STUDY : A Taste of the Future?

It was journey that started on day one – seven years ago – when recent Kiwi immigrants Yasmin and Ofer Shenhav founded Pitango with the aim of creating foods that were good for both health and environment.
“Sustainability was always at the core of what we do. The company staked its claim with its commitment to organics and saw carboNZero certification as the next logical step on that journey,” says CEO Wade Gillooly.
It was step that made the company world leader.
“At the time we gained certification (through Landcare) we were the first food company in the world to do it – no one else in our industry had verified their carbon footprint.”
The move wasn’t without its challenges.
“It’s big commitment financially, lot of work internally, and it is subject to whole lot of compliance auditing, so it isn’t easy. You do have to be committed. It costs us significant amount each year for the programme fee, the auditing compliance, the carbon offsetting – we buy credits from verified windfarm – and the royalties we pay for having the carboNZero logo on our packs.”
In terms of market gains, the jury is still out whether that logo is highly valued by consumers either in New Zealand or the company’s largest market, Australia.
“There’s not huge support – but we’re talking about trend that hasn’t really hit our shores yet. We know it’s happening in the UK and it will come. So it’s really about future proofing the business.”
Passion is driver, but the company’s commitment to sustainability is also very pragmatic. There’s already evidence of “eco-barriers” being raised in the northern hemisphere markets against produce that has totted up few food miles en route. Point-of-sale carbon labelling is growing trend that can sway consumer perception against New Zealand produce.
“The reality is that we know we’re efficient producers,” says Gillooly. “So if we can look at our impact on the environment from total product point of view (production, marketing, supply chain) and not be afraid to show people what we can do and do well, then it’s way of saying that this is not just about where goods are put on ships and planes.”
Pitango is an export-oriented business and relies on overseas markets to sustain its future growth, adds Gillooly. “So when we go into other markets, we go with claim we can really back up and be proud of – that verified carbon neutral footprint.”
Distance to markets is inevitably an issue for fresh food producers but to help offset this, the company has created technology that gives Pitango products longer shelf life than its competitors. Although the UK markets would still be big reach, that technology gives Pitango longer legs on the export trail.
“With innovation as key driver, we’re always looking at how we can do things better and part of that is this proprietary process that’s extended shelf life without compromising the nutritional value of the product,” says Gillooly. “And it’s another factor in our business that’s allowed us to reduce emissions.”
While original exports were air freighted, Pitango now dispatches around 95 percent of its Australia-bound product by sea. It’s currently exploring markets in Asia that are within shipping freight reach – particularly Japan which has strengthening consumer demand for organics.
“I have background there from marketing/work experience point of view and see it as an exciting opportunity for us. But we have to develop recipes to suit Japanese taste and it’s market that will take time and patience to grow.”
Product innovation and the flexibility to respond to international food trends have allowed Pitango to capitalise on first mover advantage, says Gillooly. Its range includes special diet options including gluten free, dairy free, meat free and low fat.
The results speak for themselves. In the past few years the company has grown from two to 35 employees and (in the year to June 2009) it’s notched up 33 percent growth in sales. That effort helped Pitango pick up the award for ‘Best Business Operating Internationally under $10 million’ at the recent NZ International Business Awards.
Growing internationally is both challenging and exciting, says Gillooly.
“You need some aspirational goals to push the business forward. My vision is for Pitango to be the leading chilled soup and chilled meals manufacturer in Australasia – we’re nearly there – and to grow our horizons into Pacific Rim markets.”
The company, he says, has the staff, innovation and technical capability to harness those international opportunities. And it is demonstrating that it’s very possible to grow business while shrinking its carbon footprint.
“One of the challenges the company faced in the past three years is that your emissions grow as you grow, so we had to think about efficiencies. And what’s happened is that this year although we’ve grown, our total emissions have gone down.”
The company has been able to “tick the boxes” on all its key performance indicators – from sales and environmental targets to staff satisfaction, says Gillooly.
“The challenge now is to keep the momentum going – not to rest on our laurels.”
The sustainability challenge is one he’d like to see taken up by other New Zealand food producers. We could, he believes, take leading role as high quality organics food basket for global markets.
“We’ll never be the volume producer – I think our total food production is only about three percent of the global supply. But we do have real opportunity to stake claim to be an ethical, morally strong, clean green producing nation. The carboNZero programme is well regarded internationally – all we need is for our larger (food producing) companies to come on board.”
A recent delegation of Chilean food producers noted that Pitango – and the wider food sector in New Zealand – was way ahead of them.
“That’s good position to be in – and effectively answers that question of leadership. It’s great opportunity.
“I’d love to think we could lead the way in organics, but there’s long way to go for that. From sustainability viewpoint, I have more confidence we could become leading beacon in terms of environmentally responsible food production.”


Pitango Profile
• Founded in 2002 by Yasmin (dancer) and Ofer Shenhav (chef).
• Based in Mairangi Bay, Auckland.
• Employs 35 staff.
• Produces wide range of freshly made, ready-to-eat risottos, pastas, curries, soups and spreads – all from product certified organic by AgriQuality NZ.
• Pitango vegetarian soups have refrigerated shelf life of 70 days; the meat-based soups are 50 days. The dips have shelf life of 30 days.
• Main export market: Australia.
• First fresh food manufacturer to gain carboNZero certification.
• Awarded SIAL d’Or trophy for innovation at the world’s leading food industry show, 2008.

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