Confidence in crisis: Overcoming collateral damage after strawberry needle disaster
Written on the 14 September 2018 by Matt Ogg
The Scurr family and their company Piñata Farms have invested substantial sums to develop some of Australia's most advanced strawberry operations, including high-tech hydroponic substrate farming, new varieties and even metal detectors in the packhouse.
But the latter was done to avoid stray rocks or jewellery, not needles like what has been seen with the brands Berry Obsession and Berry Licious due to a suspected case of sabotage.
The effects have been felt across an already struggling strawberry industry, and it could take a very long time before sales return to normal.
Almost any business could end up becoming collateral damage after an industry peer is hit by some kind of freak disaster, but such issues are more common in the agrifood sector. At Business News Australia we catch up with Piñata Farms managing director Gavin Scurr to gain some insight into how leaders can prepare for the unexpected and overcome challenges that are beyond their control.
Gavin, thanks for your time. How have you been?
Flat out mate.
I can imagine. Strawberries have been in the news for all the wrong reasons this week.
They have. Any publicity about strawberries lately has been less than positive. They're either glutted or contaminated, but that's life.
It's a tough time. For you as a farmer and a businessman, what has been the impact after needles were detected in strawberry punnets from another farm? Do you think it will affect your sales?
It has already. It's hard to know what the overall industry sales are down by, but yesterday and today it looks like they're down half what they would normally be. It's hard to quantify that obviously due to us being one small cog in a big wheel, but it certainly has had a negative impact.
And you're in the thick of the season in South East Queensland.
It is absolutely. There are plenty of strawberries around, everyone's busy and the last thing we need is this sort of thing to make consumers think twice about whether to buy or not.
So even though health authorities have named which specific farm the contamination can be traced to, that hasn't given consumers sufficient confidence to buy your brand?
I guess not. Our brand is only available when supermarkets order it as well - it's not always available for consumers to buy and it's the same with other brands. The general public probably are not willing to take the risk. They've heard about it, they're not sure and it doesn't mean much to them. It's just another brand of strawberries.
They've got a million other things going through their heads, so when they're walking down the aisle of the fruit category they might think 'I'll buy raspberries today or blueberries or apples or citrus'.
Historically, whether it be with strawberries or other fruit crops, how long does it take for consumption to get back to normal levels after a scare like this?
I don't have any firsthand experience with that. This is the first time we've been in an industry that's been impacted, however my understanding is the rockmelons that had the [listeria outbreak] issue earlier this year are still only a fraction of what they were this time last year.
That industry hasn't recovered but hopefully this issue which is much more specific with a single grower, in fact a single employee on a single farm, doesn't have that impact and it's about rebuilding confidence.
After all the work you've done in varieties and innovative production methods, does this just throw all that out the window from an economic viability perspective?
Well it does at the moment because we've been impacted by the loss of demand due to this issue so everyone is affected. That's the unfortunate thing. However, having put in the systems and processes in place that we've done, I'm certainly not sorry we've done that.
It gives us peace of mind as business owners, my brother and I, that this can't happen on our place. But something like this affects the whole industry. That's the downside when you're dealing with a commodity like strawberries.
On your Facebook page you have a video about the metal detectors in place at your packing shed. Is that because something like this has happened in the food sector before with pins, needles or any other metal object entering a product?
I'm not aware of it being in berries before but it certainly has happened in other types of food. The reason we put it in was for exactly that. We've had it in for four years now and we were thinking along the lines of material getting in there inadvertently, whether it be a little bit of stone or something.
A metal detector picks up dirt and rocks, a staple or jewellery - all jewellery is banned on our sites anyway, but if it did get in there this would pick that up.
Our intention to put it in was just ensuring no metal got in there accidentally, and not because of sabotage.
Also, it gives our packers, our staff, the peace of mind that if something like this did happen on our farm it'd be picked up at the metal detector level. All the staff at the farm in question have been suspects since that hit the fan and they've been interviewed by police.
I would imagine that's a fairly harrowing experience for those backpackers. English is a second language for them, they're in a strange country, not really understanding what's going on probably and they're all being treated as suspects. By putting in a metal detector it just removes all that.
And how has all of this affected the atmosphere with your staff, whether they be seasonal workers or permanent employees?
To be honest our staff are actually shocked that this has actually happened, that someone could actually be that twisted to do this in the first place; not even just to think about but that they've carried it out to the level that they've done.
So like I guess most of the population, we're more in shock than anything. Other than that it's pretty much business as usual. We've got systems and processes in place that ensure the integrity of all of our staff is protected.
And do you think that as a result you'll be forced to cut price in order to move product?
Price is already ridiculously low. It's barely covering the cost of harvesting, packing and freight now. What's happening is that we'll start moving out of blocks; our worst performing blocks we'll just stop harvesting those and we'll shrink the amount of fruit we harvest to the amount we can sell.
Growers have been doing that for the last month anyway. That's typical at the back end of the season however this will expedite it. So instead of blocks going longer than now, they'll get taken out because of the lack of demand.
Do times like this make you happy you've at least got a diversified crop portfolio with mangoes and pineapples?
I guess so. That's why we diversify with our crops as well as the regions we grow in it spreads your risk so if it happens in one, you've got the others. But at the end of the day if you're losing money in one, there's not a lot of joy. Just because you're making money somewhere else, if you're in a loss position it's not a good situation regardless of whether you've got income or not.
I hope people move on. That grower has finished his season - he's actually stopped harvesting completely. I feel for him as the grower because it's not his doing but the situation has been isolated. Consumers can buy with confidence. The sooner we can build confidence in consumers, the better it'll be for our industry.
Business News Australia
Author: Matt Ogg