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Dissatisfied at the bottom of the food chain farming the land, Keith Palmer, CEO of Wakatu Incorporation, talks about his organisation’s rapid rise to become an international R&D marketing company.
Wakatu is founded on a wealth of history. Covering the top of the South Island, the organisation’s 3000 owners descend from the original Maori landowners of the Nelson, Tasman, and Golden Bay regions.
To cut a long story short, the New Zealand Land Company purchased this piece of paradise in 1840 on the proviso that ten percent was retained in Maori hands. It didn’t take long before the land was placed into the stewardship of a Government-run Maori Trustee and with time it became unclear where the benefits of the trust were being directed.
Fast forward 100 years to 1977 and the original owners regain control of their land. Wakatu was formed under the Maori Reserved Land Act, which restricted the organisation to only farm or collect rent on the land. Once the Act was amended in the1980s the organisation began managing its land more effectively, buying some of the orchards that leased the land and buying a cool store to add value to its produce.
1998 saw the arrival of Keith Palmer as CEO of Wakatu. At that time he was responsible for four full-time employees and three orchards. Today the company employs 400 people managing assets worth $250 million dollars. It exports fruit, seafood and wine to 25 markets under the Kono brand (Kono is Maori for ‘food basket’).
“Our exporting success has been driven by the realisation that as farmers we were at the bottom of the food chain,” says Keith. “Apart from dairying, farmers often end up the peasants. We didn’t want that for our future generations.”
The organisation’s purpose is firmly focused on providing for future generations of its numerous owners while retaining a strong connection to ancestral history.
“Our scholarship programme offers any whanau member of the organisation’s owners the opportunity to study any area that relates in some way to the organisation’s activities,” says Keith. “And it is the alumni of this programme that the organisation charges with setting Te Pae Tawhiti – the organisation’s vision and purpose for at least the next century.
“Great governance is key to future success. So once these alumni have successfully bedded into the organisation we encourage them to take on our two-year Associate Director programme. Here they shadow directors on our boards before being inducted onto a board themselves. In this way our future generations play a key role in providing for the involvement of future generations.”
In 1998, with the aid of research carried out on adding value to Maori land holdings, Wakatu embarked on the production of wine.
“This was our first step into exporting,” recalls Keith. “It was possible to source plenty of grapes locally and the region was becoming better known for it. So we went for it.”
Today Wakatu Inc is one of New Zealand’s largest regional exporters with more than 100,000 cases leaving our shores annually. Surprisingly half goes to the traditionally challenging US market.
As their experience grew with exporting wine Wakatu began to recognise the immense opportunity in the growing aquaculture industry.
“With 90 percent of New Zealand’s aquaculture production going offshore it was a natural fit with our exporting vision,” Keith explains. They commenced aquaculture operations in 2000.
Premium food for the world
With the growing view that New Zealand’s future lay in providing fresh produce to the world, exporting Wakatu’s traditional horticultural crops naturally formed the triad of vertically- integrated operations now marketed internationally under the Kono brand.
Keith sees the organisation’s position with absolute clarity. “If you look at Australia, they are committed to minerals, which is understandable. For us in New Zealand it makes complete sense to continue building our international reputation for producing great premium food. With supply under pressure from growing global demand, we are committed to building our business on produce from the land and sea.”
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Looking back it hasn’t always been easy. “You have to understand how distribution systems work in your destination markets. And that only really comes with trial and error,” says Keith. “In the US we initially hired a US natural to represent us. Then in the UK, a Kiwi expat. These options didn’t work. We then tried two joint ventures. They didn’t work either. We then engaged someone who was meant to sell our seafood – only for him to contract our most successful wine distributor. You never get it right first time.”
When asked which markets excite him the most, Keith’s response is interesting.
“With the shift in wealth moving from West to East, we are looking to Asia for future growth. It is hugely helpful that we share cultural similarities with Asia. At meetings in China we recognise our ancestors and elders before recognising each other. We give respect to the Gods of the earth, sky and sea before getting into business. It’s an hour before we discuss product,” Keith explains.
“In the US you have lawyers in every meeting and the focus is on contract.
In Asia the focus is on relationships and trust. It may take two years to build that respect but we are looking for relationships that endure 20 years or more.”
And with three different product lines, Wakatu’s experience in Asian markets shows that it is easier to sell all three to one client than in Western markets.
“We have a great relationship with our best customer in the US, a significant supermarket chain, who takes the majority of our wine. So you’d think we would be able to get in with the seafood purchaser. Unfortunately our man can’t even get us in front of him.
“The same wouldn’t happen in Asia and that makes our international marketing efforts that much more efficient,” explains Keith.
And the bold suggestion that Wakatu is research and development focused?
“We have recently entered a joint venture with the third-largest aquaculture company in China on the production of sea cucumber. It’s an exciting transfer of technology that could open up huge opportunities for us.
We have also obtained a license to run trials on harvesting Undaria seaweed off our mussels for use in sushi. With people moving from red meat to fish, aquaculture is where we are investing our R&D dollars,” says Keith with great excitement. (Undaria seaweed is a popular food source in Japan, Korea and China.)
So for the 3000 shareholders of Wakatu and their offspring, the future looks very rosy indeed. And New Zealand could well benefit from the cultural similarities and strong ties this organisation has with Asia.
Colin Bass is a Nelson-based freelance writer. Email [email protected]
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