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Socius Media create meaningful case studies for the NZFIN website

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The New Zealand Food Innovation Network (NZFIN) is an accessible, national network of science and technology resources created to support the growth and development of New Zealand food & beverage business of all sizes. At Socius we have been working with them to create concise and meaningful case studies for publication on their website. Here are a couple of examples.

The Apple Press NZ

The Apple Press – The Foodbowl Hawke’s Bay Goodness

The FoodBowl is always happy to assist local companies, but the best feeling of all is when the development done at The FoodBowl leads to a massive economic win for a region and for New Zealand. “The Apple Press” is a new Hawke’s Bay beverage brand that produces the world’s best apple juice and does it sustainably utilising the leftover “ugly fruit” that does not make export grade.

The Apple Press (previously operating under the company name Apollo Foods) has built a state-of-the-art beverage processing facility in Hawke’s Bay to enable development of apple based beverages for NZ & export markets. Before the plant was commissioned, they needed to show they had a great product, one worth investing in and so came to The FoodBowl in 2014 to refine and test their juice processes and formulations. They needed to justify the business case for the new facility and be ready to go as soon as the plant was ready.

Sally Gallagher, Head of Innovation & Strategy at The Apple Press, says “Our FoodBowl experience was very positive, the people there were so helpful; all expectations were met. Without The FoodBowl, we wouldn’t be here today with this product. How else could we have tested it?”

The Apple Press uses fruit not “pretty enough” for export. Sally says the concept was “let’s make our juice look and taste like an apple” (with no preservatives or additives).

Job creation is already considerable – three employees have become 40 in only 18 months. Sales turnover, although domestic only, has grown rapidly to >$500K since launch in April 2018. Export interest is high from a range of markets, and all going well there may even be a container on the water before Christmas.

A chilled juice shelf life is generally 40-60 days, but The Apple Press process can increase this substantially. Thanks to the perfecting of an aseptic filling technique, there is no contamination from pathogens. It means a shelf life of 9 months, chilled for the Apple Press juice range.

Food development is never without challenges: some variants were too acidic, others had colours that weren’t consumer-friendly enough. But there was shining success with Braeburn, Royal Gala and JazzTM – apples in a bottle. A run of 500 bottles at The FoodBowl has become 10,000 bottles an hour in Hawke’s Bay. (The plant capacity is circa. 50 million bottles per year). Finding the right investors who shared the same vision was also a challenge that took nearly a year to secure.

Operational investment has been big, with the capital investment circa. $20 million, supported by Callaghan Innovation from the project outset. New Zealand’s unwanted (but delicious) apples have become sought-after beverage SKUs in Foodstuffs and Progressive supermarkets.

This venture is poised to become a major export winner for New Zealand, and it all began at The FoodBowl.

Visit https://foodinnovationnetwork.co.nz/projects/the-apple-press-hawkes-bay-goodness

Supreme Health – Foodbowl

Sometimes great discoveries are just out of reach without quite the right technology to realise their potential. That’s why Supreme Health’s CEO Kerry Paul turned to The FoodBowl, with its state-of-the-art freeze-drying facilities. Kerry founded Supreme Health in 2017. Already its products can be found throughout New Zealand and he is exporting into Asia. What he’s working on in The FoodBowl could be the Next Big Thing.

Supreme Health - Foodbowl

We know what antioxidants do; they take on the free radicals in our bodies that cause us health problems: accelerated ageing and a weakened immune system. It is a literal life crisis, albeit an invisible one, and to save us we need mighty molecules, the antioxidants. There is none mightier than the one at the front of the alphabet – Astaxanthin.

Astaxanthin can take on (absorb) 19 different free radicals at the same time, maintaining its own stability by redistributing its own electrons; it’s fat and water soluble (so it’s active throughout the body). It can cross the blood/brain and blood-retinal barriers. It can penetrate the cell membrane, protecting a cell’s interior structures.

Best of all, astaxanthin is ours. Kerry’s team harvest it from green algae in some of the purest water on earth – the South Island’s high-country lakes, rivers and streams. Astaxanthin has superpowers where other antioxidants merely have abilities. It is 6000 times stronger than Vitamin C, 3000 times stronger than Resveratol, more than 500 times more effective than Vitamin E or the catechins in green tea.

But, you have to extract the astaxanthin from the algae, and it must be rigorously tested. Supreme Health harvests the algae strain Haematococcus pluvialis and encourages it to produce red Astaxanthin (AstaNZ™) in a controlled environment.

Supreme Health has used The FoodBowl before with other product development. Kerry Paul says “The FoodBowl provides the ideal stepping stone to get you started at the right level. With anything larger in terms of a development facility, you run the risk of losing your IP and producing too much product in the early stages before your market has been tested. The great thing about The FoodBowl is that production and development aren’t at an industrial scale.”

With astaxanthin there are so many possible products to develop, and each one can be tried and tailor-made. “The FoodBowl people are helpful as well as knowledgeable, says Kerry. “It’s a great facility.”

The development of astaxanthin is six months in, and when the product goes to market in its final forms, it has the potential to become a significant export earner for New Zealand.

Visit: https://foodinnovationnetwork.co.nz/projects/supreme-health

A prince, a president and a supermodel unite to call for bolder steps towards inclusion.

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Pleasure to help out in the making of this video for the 2019 World Economic Forum.

Our Prime Minister was most obliging and a pleasure to deal with.

Check it out!

A prince, a president and a supermodel unite to call for bolder steps towards inclusion. Inclusive Voices brings together world leaders, celebrities and changemakers to share alternative opinions on what could and should be done to secure inclusion and equality for all by 2030. Hear their full stories.

Source: KPMG YouTube

Here’s how to make money from a franchise business

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Former television presenter Mary Lambie did it. Former rugby player Eric Rush still does. But how do you know if owning a franchise will work for you?

Mary Lambie was a Subway owner.

Mary Lambie was a Subway owner.

First up, how do you start?

There are hundreds of options available. Becoming a business owner can be as simple as shelling out the amount on the price tag. Some franchise systems require you to work in the business first, or to meet certain criteria.

A scan of listings reveals a wide range of business types and prices. There is a Fastways courier business for sale for $7500, an Asian food takeaway for $225,000, a “global sandwich franchise” that looks suspiciously like a Subway for $340,000 and a Facebook marketing franchise for $3500.

But how can you tell if you are investing in a booming business, or just buying yourself a poorly paid job?

There are no sure-fire winners

Westpac national franchise manager Daniel Cloete said, while you were more likely to be successful owning Albany Pak’n Save than a cleaning business for sale for a couple of thousand dollars, there were no guarantees.

He said, with any system, 5 per cent to 30 per cent of franchisees operated at the bottom end of the “success curve”. That could be because they were in the wrong location, the franchise model was not a good fit, or the owners struck problems.

Those were the ones that were often on the market as resales, he said. “You could have good ones in a franchise making millions and others barely breaking even.”

He said there were some franchise models on which the bank would not have lost money in the last 30 years and they tended to have some key things in common.

“There are 600-plus franchise systems in New Zealand. We regularly fund 150 of those and there are opportunities in 30 or so, in dollar terms.”

Philip Morrison, of Franchise Accountants, said how much people could expect to make from a franchise was “the million-dollar question”. “Although the answer is unlikely to be ‘a million dollars’. The real question is ‘how much money can I take out of the business without damaging it?’ A one-man-and-a-van franchise is likely to produce a different result from a large restaurant employing 50 staff.”

While financial success is likelier in a big brand, it comes at a price. McDonald’s requires individuals to have at least $1.2 million in “unencumbered funds”. It also has a franchise fee of $75,000 – plus the cost of the equipment in the business, if it’s new, or the value of an existing business.

What’s the product?

Lambie owned Subway outlets and Rush is in the supermarket trade.

Simon Lord, of Franchise.co.nz, said for any business to succeed, it had to provide a product or service that people wanted, at a price they would pay and which delivered a profit to the owner after all the costs were paid.

“New Zealand has a small population and if a product only appeals to a niche market then it may not work here – even if it is successful overseas. But be aware that new niches are developing all the time: concepts such as Mexicali Fresh or Noodle Canteen would probably not have worked 15 years ago but changing demographics and new eating habits have made them viable now.”

Eric Rush has a New World franchise

Eric Rush has a New World franchise.

What is the franchisor offering?

Cloete said the best franchises had a franchisor (the business that owns the overall brand and franchise model) that was focused on the ongoing development of the brand, concept and business model. It needed to continue to invest in its systems to remain competitive.

“You can have ones that have been quite successful but over time become less competitive.”

Those that are focused on selling franchises to new franchisees, rather than ensuring the success of their existing ones, tend to strike trouble first.

Lord said most franchises had some form of ongoing support but the best ones “go beyond basic in-store consultations”.

“Good franchises have always had a policy of re-investing in their businesses through product research, systems upgrades, adoption of new technology and other forms of support and marketing,” he said.

“Similarly, they insist upon franchisees upgrading their own premises or systems on a regular basis. If they do this well, it pays off – franchises that reinvested during the economic downturn, for example, now find themselves in a very strong position with increased market share and improved relationships with both customers and franchisees.”

If you fancy owning a McDonalds, you'd better have some cash in the bank

If you fancy owning a McDonalds, you’d better have some cash in the bank.

What has been others’ experience?

The franchisor will probably give you lots of sales projections based on its business model and experience in other locations. This is not a guarantee of how the business will perform. If it’s an existing franchise, you can ask for a copy of the financial statements from the current owner.

If it is a new one, talk to other franchisees in the system about their experience, and find other small businesses in a similar position to yours. You need to get an accurate idea of costs.

Cloete said it was important not to get caught out on things such as rent. “If the system average is rent of 8 per cent to 12 per cent [of revenue] an you buy something at 23 per cent, that difference comes straight off your bottom line and makes it more difficult to profit.”

How much do you have to pay in future?

Franchisors will take a fee on an ongoing basis – it is common for a percentage of sales to be taken each year as a franchise fee, and to pay a marketing levy.”

“Ongoing fees, sometimes called royalties, management fees or licence fees, are separate to and additional to the upfront franchise fee you paid at the beginning. As the name suggests, they are payable on a regular basis – often weekly or monthly – throughout the term of the franchise agreement,” Morrison said.

“There is no ‘standard’ rate; fees vary according to the services which they pay for. Potential franchisees should avoid choosing a franchise based on lowest fees alone, as an under-funded franchisor may struggle to deliver on support and system improvements.”

Check what happens if your sales slump. In a downturn, would a flat fee remain constant, or could you negotiate it?

Stuff is the media partner for Small Business Month, supported by CAANZ.

Article source: https://www.stuff.co.nz/business/