Egmont Honey is a great example of the spectacular growth that can occur when you partner with an astute investor, writes Catherine Beard.
An estimated 15,000 to 20,000 tonnes of honey is produced each year in New Zealand, contributing to export earnings of more than $340 million.
Our liquid gold has become a staple in some Asian countries, so it goes without saying that the honey industry has become a particularly competitive space.
Despite that, James Annabell’s business Egmont Honey has excelled in a short period.
“In four years we have gone from a start-up brand working out of a tiny office, to a 40-person operation that is recognised globally as one of the leading mānuka honey brands,” he says.
James, who started the business with his father Toby, says communicating the company’s story and locality has been a huge benefit.
“I am a firm believer in building empathy with the consumer, and many people have heard me reference the Indian proverb ‘those who tell great stories rule the world’.
“We do exactly that and celebrate our mānuka story. We introduce our consumers to the farmer whose land our hives are placed on, the helicopter pilot who transports our hives and the honey maker who processes the product. This helps us form lasting connections and brand loyalty.”
But operating in the mānuka honey industry hasn’t been without its challenges for the former professional rugby player.
“The mānuka industry is exceptionally complex. We have had a few mānuka seasons which have been a bit of a mixed bag, and raw material costs can fluctuate greatly. Mitigating these risks has been a challenge and will continue to be.”
It’s a seasonality that has meant many of the big players have seen significant profit drops.
Despite that, Egmont has had some big wins over the past 12 months – recently launching two clover products into 800 Woolworths stores across Australia.
It has also expanded its private-label business with selected global retail brands.
The company has been adding capacity to its New Plymouth factory, and has its production schedule ‘maxed out’. “A very good problem to have,” James says.
Opened in 2018, the factory employs 20 full-time staff through its processing, packing and dispatching departments.
Egmont Honey has had exceptional growth on the back of its 51 percent sale to The Better Health Company, which also acquired a majority share of Kiwi supplement business Go Healthy.
“This investment enabled us to rapidly expand and achieve what we have in two years that would normally have taken over ten, had we relied on organic growth.”
Inspiration
AllBirds founder Tim Brown was an unlikely inspiration for James.
“I was privileged to hear him talk during a study trip to the US last year. Tim spoke about a tendency for New Zealanders’ modesty to get the better of us.”
He says Brown instilled a ‘think big’ attitude in him. In his words: “Don’t be scared about a minimum order quantity of 10,000 shoes – be excited about the prospect of selling one million pairs.”
James believes in the honey market there are clear advantages to being a Kiwi business.
“Our strict biosecurity laws mean that it is highly illegal to import honey or bee products into our country – meaning that anything exported is by virtue 100 percent pure.
“The Australian honey industry has been rocked by a couple of scandals recently involving companies blending honey with imported product and not being entirely clear in labelling that this is happening. Our strict laws help us position ourselves as a natural premium product.”
Although Egmont Honey has a strong and growing domestic presence in supermarkets and duty-free channels, it exports more than 95 percent of its products to 18 countries.
Last year, Egmont Honey clinched the Supreme Award at the TSB Taranaki Chamber of Commerce Business Excellence Awards.
With more than 4000 hives and rapidly growing exports, you’d be brave to bet against this family business.
Catherine Beard is executive director of ExportNZ and ManufacturingNZ – divisions of BusinessNZ. Email [email protected] This story was also published in the February 2020 issue of NZBusiness.
