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Food business built for growth

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There’s something of a food revolution happening, rather quietly, in Salisbury.

In less than four years, Australian Wholefoods has grown to become one of the biggest national players in the fastest growing food sector – ready-to-eat meals.

It supplies Coles, Woolworths and hundreds of smaller independent outlets with everything from slow cooked beef ragu to pastitsio and peri peri chicken, and is already looking at overseas opportunities.

It’s a meteoric rise built on strong foundations; in fact, there’s more than a little sense of déjà vu for owners and directors Ray Khabbaz and Michael Demetriou.

They previously ran Copperpot, which between 2001 and 2007 grew to become the biggest single supplier of dips and snack products in Australia and the largest Australian exporter of these products.

When a good offer came from a major multinational they sold up and planned semi-retirement. However, as Khabbaz puts it, that lasted “about a nanosecond in business terms”.

Both could see an expanding market niche, with more and more consumers looking for quick meal options that are both health and high quality, and Demetriou suggested the old team do something about filling it.

To create the business platform they bought Australian Wholefoods, a then Marleston-based company primarily involved with catering. Within nine months its sales had increased by 80%, largely on the strength of new product ranges in the Clever Cooks brand and the Australian Wholefoods Quiche being stocked by Coles and others.

The purchase of another local business, Alaska Foods, gave them links into Woolworths as well, and both major supermarket chains could see the potential in what they were proposing. Both also trusted the business acumen that had created the Copperpot success story.

Australian Wholefoods thus had the products, the ideas and the buyers; it just needed a better facility to fulfil the vision.

While looking, in late 2012, for a new site to relocate the two separate businesses, the partners discovered their old Copperpot facilities at Salisbury were out of lease with their current tenants, so they snapped them up – then quickly changed them completely.

Around $25 million was spent on refurbishing the building and installing state-of-the-art equipment that allows the company to do everything from making pasta and grinding its own mince to creating, packing and distributing its full range of ready-to-eat and single-serve meals.

“We don’t do paddock to plate but you could say we do gate to plate,” Khabbaz said.

Central to the innovation was equipment for modified atmosphere packaging, which gives fresh meals a 28-day shelf life without the need for additives or preservatives. They also have the capability to freeze products if required to fill future international orders.

engine-room

Khabbaz, who travels relentlessly, says they have benchmarked their facilities against one of the biggest companies in Europe and while they may not have the scale, they lack nothing in quality and sophistication. And the Copperpot reputation is still a useful calling card when overseas.

Australian Wholefoods currently produces about six million units a year, but the facility is about 60% underutilised and only works one shift. It was purpose-built for growth, with the vision of reaching 13-14 million units within four years.

Even at current production levels it employs around 160 people and, more importantly, in Australia it performs strongly against some of the biggest international food companies.

Its own brands include Clever Cooks, Alaska and Banquet, but much of its product range appears under Coles and Woolworths private labels. Foodland and all other major independents nationally are also big supporters.

Khabbaz also has become a member of, and strong advocate for, the Engine Room, a networking and development vehicle established as a catalyst to help local businesses reach their potential, and receive some recognition at home.

He admits that at nearly 57 he’s “much older than most people there”, but sees that as one of the strengths of the concept

“I joined to be able to help mentor and I’ve done that with a few of the people I’ve met there who are young, have great ideas but want to know about the realities and pitfalls of being in business,” he said.

“I think there’s a bit of scope to support and create; to help people become visionaries in what they do. Sometimes there’s a bit of a void in that area.

“When you look back in history some of the biggest names and most successful business people came from small business backgrounds. You just need to get on the right path.”

This article is part of a special Engine Room series in InDaily which features some of the “undiscovered gems” of SA business.

The Engine Room is dedicated to championing the growth of South Australian companies – for more information go to www.theengroom.com.au.

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