Flat and nimble management bears fruit for Oppy
Canadian fruit company Oppenheimer put the finishing touches on a flatter management structure this year that allows for more autonomous decision making. Late last month the company then changed its brand name to the colloquial 'Oppy', which president John Anderson thinks will start to be used on fruit and vegetable labels next year. At the Produce Marketing Association's (PMA) Fresh Summit event in Anaheim, he told www.freshfruitportal.com why these moves were necessary in a more competitive international environment for securing supply.
Anderson describes the new structure as 'nimble' with categories broken down into business units, which while able to react quickly still have the resources of a large company behind them.
"I give them enough to hang themselves if they wish, but I’d prefer they don’t do that - we have good people, so you let them get the job done, the way that they think it should be done," he says.
"We feel that gives us a competitive advantage. Some people are just in that one category and they’re not a large company so they don’t have those resources available to them that we have."
In line with this idea, Oppy opened up a new sales office in Toronto, Ontario in October to better capitalize on 'next day' and 'that day' delivery demands in eastern Canada.
"People are wanting that service to be much quicker now, so we need to be on the ground with out products there, and people there to service our needs," he says.
The company adopted a simpler strategy and chose the simple name later, which Anderson feels is more contemporary and summarizes what the business has become.
"We are an old company, but we don’t want to be seen as an old company with old ways; we want to be seen as a company that’s innovative, changing, and looking to the future."
As part of this, the company has spent the last five years developing its own in-house supply chain technology, built and designed for the needs of the produce industry. The project was finally completed in recent months, while the distributor continues to employ programmers in different divisions to help meet individual needs and improve operations.
"This new system is really putting efficiencies into our company; things that used to take days to do are now done in minutes."
Competing for supply
Not only has Oppy changed its form but also its ways of doing business with clients, pushing towards more contracts with a 'fixed' element so that growers know they won't be losing money on transactions.
"There are more and more products out of there that are pre-programmed as opposed to free market, and I see that changing, it’s a trend for sure; it’s done in other parts of the world and the U.S. is kind of the last one that has that model," says Anderson.
"It won’t happen overnight but it’s trending towards having to pre-program it because of the options the growers now have in the world.
"We have our own company in Chile that exports to other places besides here [North America]. The other options elsewhere are more than they used to be, so in order to get the supply, you need to make sure that you’re contracting in advance."
He says exchange rates are one of the drivers of this trend with the weak U.S. dollar, and supplying countries often getting better returns in Asia because of it.
"The pricing we’re getting here is quite good, but when you transition it back to the new Zealand dollar, the Chilean peso or the Mexican peso, the returns they’re getting is a struggle," he says.
Oppy has also moved more into organics and fair trade, which Anderson plans to expand in the coming years.
"I don’t think there are any categories where we don’t have some organics in; it's bigger in some areas than others, depending on the product line," he says.
"We’re looking at Rainforest Alliance certification and fair trade certification too, as an area of growth and potential for the company," adds spokesperson Karin Gardner.
Oppy already has fair trade certified peppers and Rainforest Alliance certified mangoes and grapes.
"We’re getting out of that recession. There’s a lot of awareness again, socially responsible produce has a lot of demand," she says.
In terms of other supply issues, Anderson takes note of a couple of starting and upcoming deals from different countries. He notes that a good blueberry supply deal is expected from Chile this year, strawberries and blackberries are coming out of Mexico at the moment, while cranberry volumes should rise about 10% this year.
"There are cranberries available in South America and we’ve looked at bringing them up, but even though the attributes of cranberries are really healthy for you, there hasn’t been that consumer demand."
He adds cherry volumes from existing Chilean cherry farms should be down about 20-30% this year, but this will be offset by the output of new plantings.
He says Oppeneheimer will be embracing Australian citrus if the industry is deregulated from its single desk marketing system with DNE World Fruit Sales.
"Australia has great quality citrus, and our retail customers are telling us they want us to get back into that game. They miss us being that. We’ll have to see how it all pans out.