Thomas Foods success didn't come by chance
- By: "Farm Tender" News
- Farm Tender, DelayPay & Farm Inputs
- Feb 07, 2019
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By David Sly
Prosperous export businesses don’t succeed by chance. Thomas Foods International has grown to become Australia’s third largest meat producer – and the sector’s largest family owned business – with an annual turnover of about $1.3 billion.
CEO Darren Thomas says this is the result of 40 years’ work in international markets, built around a strong but highly flexible business strategy.
“The goal is not just about establishing export trade, but thinking about the market you are going into, and the relevance of your product in that market,” Darren told a full auditorium at a recent Brand South Australia I Choose SA industry briefing on the trade and investment sector.
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Implementing this idea means examining the numbers to understand precisely what your product means to a global market, and this has prompted Thomas Foods to move far beyond its original business of meat processing and distribution.
Thomas Foods’ original business was in meat processing and distribution.
“Australia cannot feed the world,” says Darren.
“We can produce enough food to feed about 60 million people, and the markets we are already exporting to have a population of three billion people, so therefore we are always going to be a boutique producer, no matter how much the company grows in size and reach.
“This understanding was behind our very first decision, which was to concentrate on premium products.”
Darren says a key to export success, which now represents about 80% of Thomas Foods International’s business, has been through investing directly in markets where Thomas Foods International is trading.
It has built infrastructure and distribution hubs in the US, entered business partnerships with foreign companies and purchased several others to establish a solid beachhead in 85 key international markets – from Dubai and Cairo, to South America, Shanghai and Tokyo.
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Recently Thomas Foods International purchased a company in the Netherlands, which had been a long-term customer, strengthening the company’s position in Europe.
“If you want to succeed in other countries, you have to get closer to the customer – there is no other way,” says Darren.
The expansion of Thomas Foods International also signals that progress depends on being reactive to what happens in the market, rather than staying fixated on your existing products.
With this in mind, Darren says he is aware that selling traditional boxes of meat will eventually be phased out altogether, which is why Thomas Foods International is a keen and active participant in emerging e-commerce technology and marketing strategies.
“You have to keep asking yourself how you remain relevant,” says Darren. “It’s crucial to keep abreast of technological changes in your sector, to know what your opposition is doing in the same competitive space, and to understand what your customer’s customer wants.
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“We need to read and understand consumer habits and preferences, to embrace change in the marketplace as it happens.”
This has seen the company expand to include food retail label Thomas Farms, meat wholesaler Holco, ready-to-cook meal business Thomas Farms Kitchen, and sustainable seafood export business Thomas Cappo Seafoods, a collaboration with Cappo Seafood.
Some of these businesses have taken off internationally in ways that don’t happen in Australia – such as surging US popularity in prepared meals.
Thomas Foods Fresh Produce is Australian owned and Australian grown.
This underlines the need for an expansive exporting company to have separate businesses that can react swiftly to how customers evolve and buying trends erupt in different markets.
Darren has noticed that leading global tech companies dominating the retail sector – Alibaba and Amazon – are now investing in new-style bricks and mortar retail shops that have hi-tech purchasing models, with the first checkout-free Amazon Go shop now operating in Seattle.
This has inspired the company to trial new food packaging and marketing ideas in South Australia first. Eight months ago, Thomas Foods combined with Tony and Mark’s grocery stores and Uber Eats to introduce the world’s first home-delivered fresh food packs, providing ingredients for chef-designed, ready-to-cook meals via a phone or online instant delivery service.
It’s an innovation that Darren believes will soon find traction in the international market, and therefore give his company a competitive advantage.
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“It’s a snapshot of opportunities that can exist,” he says, “so it’s important to get out and have a go.”
Such progress is a powerful positive statement from a company that was hit by an unexpected disaster when a fire destroyed its Murray Bridge abattoir and meat processing works in January 2018.
The company has underlined its firm commitment to rebuild in Murray Bridge, and is looking to invest in next-generation technology to improve cost-effectiveness and efficiency.
Darren says that taking this approach reinforces that Adelaide will always be home base for the company.
“There need to be improvements – especially for governments to knock down existing trade barriers if we are going to grow further – but we have a strong platform in SA to build a strong export business on,” says Darren.
“We are very confident of the future. I believe we can afford to be bullish in our business forecasts.”
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