Costa might not be a household name. But most households are home to its products nonetheless. The single largest supplier of fresh fruit and vegetables to Coles, Woolworths and Aldi, Costa has 3000 hectares of crops in production in 30 farms over the nation.
Last week, Costa CEO Harry Debney spoke to a packed-out audience in the Packaging Council of Australia’s South Melbourne headquarters, providing some insight into how the company has tended - and grown - its success.
Debney explained that over the last five years, the company significantly restructured, rationalising down to seven core categories and shifting its focus to growing their range themselves. “We saw retailers were going to go direct to farms, so we reinvented ourselves,” said Debney. “We have four times as many farms today as we did four years ago. We’re the real deal here, we’re farmers; we don’t just aggregate and then market.”
Concentrating on mushrooms, berries, truss, cocktail and snacking tomatoes, citrus, grapes, avocados and bananas, Costa has been attempting some fundamental changes in the way fruit and vegetables are sold. Primarily, Costa has been shifting to a branded, pre-packaged model that does away with bulk produce sales. “The fruit and vegetable industry is generally not a branded environment,” explained Debney. “But we are building and are reasonably successful in expanding some consumer brands into supermarkets.”
Perino snacking tomatoes, Blush tomatoes and Driscoll’s-branded berries are among the more prominent varieties, though mushrooms and lady-finger bananas are also in the market.
“Costa really invented mushroom pre-packs here in Australia,” he said. “We’ve been very active leading in fruit and vegetable consumer packs, and trying to develop a whole lot of new focus on that rather than loose products.”
Apart from a presenting a more appealing product to potential customers, pre-packaged fruit and veg also allows Costa to significantly improve shelf-life. For items like mushrooms, for instance, wastage is very high due to damage from handling.
“Supermarkets lose money out of the bulk,” said Debney. “Pre-packaged mushrooms avoid that, but also extends the shelf-life by about double.”
Rethinking packaging also allowed Costa to drastically improve the quality and durability of their fruit and vegetables. Increasing ventilation in packs allows the company to cool products rapidly, thereby improving freshness.
“We’ve had to redesign almost all of our packaging in the last two years to allow for better facilitation of forced air-cooling. It gives us faster cool-down times,” explained Debney.“There’s a major increase in ventingwhich gives excellent forced air cooling.”
For example, the design allows Costa to cool its mushrooms and berries to 0.5 degrees within a matter of hours. Traditional wisdom was that the optimum cooling temperature was 4 degrees, but Costa believes its method gives their products an extra three days shelf-life. Along with the boxes and punnets, the business’ packing facilities are also designed to maximise the speed with which fruit and vegetables are ready for chilling.
“Increasingly, our company is using high-volume packing sheds, which means we’re progressively taking out all the spots where we’ve got limitations to speed and output,” said Debney. “We’re increasingly putting robots in our lines. The bottlenecks are often in the closing or labelling sections, and a lot of work has been done there. Our requirement is to have our suppliers focus very heavily on closure processes.”
And while the company has made significant capital expenditure on updating its processes, Costa still struggles to balance packagecost and quality. “You need a packaging that will protect the product throughout its marketable life, but the second concern is cost efficiency,” said Debney. “It’s very easy to get a cheap box, but then you’re sacrificing the structural integrity. It’s very easy to get a strong box, but then you’re arguably paying too much for it.”
Harry Debney, chief executive officer, Costa Group
