Monthly Archives: December 2018

Finding a niche in a large global market

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Global and national interest in hemp seed products may be growing but when Kanapu launched into the market, its founders knew they needed to establish a unique selling proposition to ensure success.

At that point, the market was focused on hemp seed oil as a nutraceutical and it was commonly found on the shelves of health stores, particularly in pill form.

But Kanapu co-founder Isaac Beach says at the time there was also growing national and international interest in ‘functional hemp foods’.

“We decided to enter the market from a culinary point of view, focusing on the associated benefits of consuming hemp in the form of a functional food.

“That was a big gap in the market we identified. No one was in that space and yet it was perfect for us because not only is Hawke’s Bay the best part of the country to cultivate industrial hemp, it’s also full of expertise and business support in the area of food. We have some of the nation’s best culinary experts and chefs.

“We partnered with some of them and they came up with these brilliant ways of consuming hemp seed oil, and that led to the community understanding hemp food products are not drugs, they are safe and these expert chefs are using them in their meals at high-end restaurants, in high-end cuisine.”

Among the chefs championing the company’s oil have been Hawke’s Bay’s Kent Baddeley (best known for his restaurant 1024) and Jackson Smith, executive chef at Havelock North’s Malo.

Another aspect of Kanapu’s business strategy has been focusing on supplying the highest-quality product to local markets, given that hemp seed products degrade over time once they’re processed.

“In terms of quality and the realisation of functional benefits of hemp foods, consumers are wanting to consume them within the shortest time since they’ve been processed,” Isaac says.

“We’re better positioned to supply the local market than producers in other countries because of our shorter distance and time to market. We can compete effectively locally, and also in Australia, with regards to providing quality product.

“That, combined with the fact that we’re growing in Hawke’s Bay, is a significant unique point of difference from a quality standpoint.

“Our goal as a company is to focus on functional hemp foods and minimise the distance as much as possible from process to plate, and that’s essentially what we’ve achieved.

“Consumers are raving about the colour, the texture and the taste of our oil versus other oils on the market.”

 

Mastering the plumbing business

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Tim had been working as a contractor in Hawke’s Bay before making the decision to move to Port Headland, travelling around the Pilbara in Western Australia, setting up massive infrastructure for satellite mining camps – housing developments for between 2 to 5 thousand people. The money was amazing and the driving eye-opening.

“I covered some huge km’s, often driving 5-6 hours to fix a tap. It was the Australia that you wouldn’t otherwise see – vast desert. It was awesome.”

Coming home in 2012 Tim knew he wanted to set up on his own. He opened an office in King Street in Hastings, with a part-time office person and one other plumber joining him. There was plenty of work and it was hard to know which jobs to take and how to manage the business growth, having had no business management training.

“I went to an event and listened to another owner speaking about his experience with The Icehouse and thought it sounded practical and could work for me.”

Tim was able to access NZTE funding from the Regional Business Partner in Hawke’s Bay which gave him the extra push to get into the local Owner Operator Programme, facilitated by Michaela Vodanovich and incorporating one on one business coaching with monthly workshops and action groups.

“Getting started with The Icehouse, I realised how naïve I was, but I quickly picked up more and more skills from the workshops and the other people on the course. I had been a bit worried about paying

Jay Jay Kettle and Tim Masters at their new offices in Hastings.

for the programme but the funding we were able to access did make a big difference. I started pushing ahead and was gaining clarity as well as momentum so the cost wasn’t an issue – looking back it was a no-brainer – suddenly I was adding another plumber and another plumber.

One of the first things I learnt from the Icehouse was, if you want to be a bigger business then you need to act like a bigger business so we invested in software that could run massive crews, even though at the time we only had a few staff.”

Tim also learnt about the importance of high-quality customer service to the business and what that looks like.

“I know that’s one of the key reasons we are so busy today, together with top notch, quality workmanship – customer service remains our focus.”

Now the business has 10 staff, including plumbers, gasfitters, drainlayers, a digger and truck driver plus apprentices and two office staff in a bigger office in King Street. They cover a mix of commercial and residential services for Hawkes Bay’s top builders and Masters is one of only a few local companies to offer central heating – a feature that many people moving to Hawke’s Bay from Europe can’t be without.

Jay Jay Kettle is the face of the business as the office manager and is taking more responsibility from Tim. A need to understand strategic aspects of the business meant Jay Jay required new skills and management tools. Tim enrolled her in The Icehouse Effective Leadership Programme at the Business Hub, a three month programme of workshops and coaching, to support and develop managers in their individual roles.

Over the last year or so I have been picking up a lot of work that Tim used to do and now I feel like Tim can focus on growing the business and I have the confidence to take on more responsibility, including recruiting staff and dealing with issues that come up.

Learning how to be a better communicator and take positive and different approaches to day to day challenges was valuable and we all learnt so much from each other on the Programme.

Sometimes you think you’re the only one dealing with complex issues but The Icehouse makes you realise you’re not alone.”

For Tim, the chance for Jay Jay to do an Icehouse programme was perfect timing, not only just for the business but also allowing him to plan for some much-needed time-off.

“The leadership training has given Jay Jay a deeper understanding of the business, allowing me to focus on the jobs I need to be across and the big tenders.

“I’ve also got a trip planned to the States later in the year and to be able to leave the country with confidence that everything will be ok is pretty cool – we’ve come a long way.”

Working as a travelling plumber in the Aussie mines gave Tim Masters the experience to manage large scale projects but it provided little guidance through the minefield that is owning your own business.

 

Growing a market for hemp foods

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Having to ramp up your target production because product demand significantly exceeds initial forecasts is one of those business headaches it can be nice to have.

It’s the situation Isaac Beach and Simon White of Otane-based Kanapu Hemp Foods found themselves in this year.

Kanapu has been growing hemp on Otane’s Ludlow Estate, Simon’s family’s farm, and the cold-pressed hemp seed oil they’ve been producing has been in hot demand.

Targeting the premium end of the hemp food market – both locally and internationally – the company is also close to launching a packaged hemp flakes product.

“Following our marketing launch earlier this year, and as a consequence of the response from around the country, we’ve had to adjust some of our forecasting around demand for functional hemp foods in New Zealand,” says Isaac.

“It’s resulted in us increasing our target production for this year (the 2018–19 summer growing season) to around twice what we’d originally intended before the launch.”

The new production target is about 250 hectares of hemp, which the pair admit could be challenging to achieve. It will involve extending production beyond Ludlow Estate, using contract growers across Hawke’s Bay – potentially from Wairoa down to Dannevirke.

The hemp varieties being harvested by Kanapu have zero tetrahydrocannabinol (THC), so are completely non-psychoactive.

They contain about four percent gamma linolenic acid (GLA), a bioactive fatty acid known for its anti-inflammatory qualities, and two to three percent cannabidiol (CBD), which has been shown to be therapeutically useful in treating pain and epilepsy.

Isaac says the company is looking to commence growing trials this season with high CBD hemp varieties, containing 8.5–13 percent CBD.

Hemp production is regulated, meaning Kanapu needs to have its licenses amended in order to achieve its growth plans.

“We’re working with the Ministry of Health to first enable the increase in cultivation area within a short time frame. That process will impact on whether we can meet the target or not,” says Isaac.

“The Ministry have indicated we need to provide justification for the increase, and the justification is that people want to start consuming this product more readily.”

At around 700 hectares, Ludlow Estate is predominantly a mixed-cropping farm. Simon says he became excited about hemp’s potential following an initial meeting with Isaac.

“We’re always looking for new opportunities. And this was a very new opportunity that came to our attention. We researched it and Isaac and I put a three-year plan together. We had targets and key goals within that three-year plan. We achieved all those goals and targets and from there we launched on a commercial scale.”

Simon says a key aspect of the business is that Kanapu is working on a model under which the company controls all aspects of the product, from growing the hemp right through to sale of the product.

“We’re involved in the process the whole way through, which is a key part of making it a successful premium product. That way you’re guaranteeing quality of the product, which is really satisfying,” he says.

“The other thing that’s really hit home recently is the number of testimonials we’ve been receiving from people who’ve been using our product. They’re telling us they’ve been able to stop taking pills [for pain and arthritis] and are instead just using this sustainable product that’s actually helping them.”

Isaac says Kanapu was strongly focused on developing the hemp food industry as a positive economic driver within the Hawke’s Bay region and the Ngati Kahungunu rohe.

“In that regard, we are already establishing relationships with existing cropping farmers to assist in developing this industry because we realise if it’s going to become all that it can be in Hawke’s Bay, it’s going to require a joint effort from multiple farming interests – from the farming side of the value chain

right through to manufacturing, et cetera,” he says.

“From a manufacturing point of view, we’re already positioning ourselves to support that development, and there are some key steps that need to take place between now and this summer’s harvest to enable us to really get a good foot in the door from a national perspective – and even with a view to going international – in terms of establishing Hawkes’ Bay’s potential within this industry.

“We’re almost unashamedly biased to supporting farming interests in Hawke’s Bay, from Wairoa to Dannevirke, and even further south into the Wairarapa region.

“From a business point of view, that’s where we need to focus our energy. If we are to be a region that has a significant competitive advantage in this sector, we need to partner like that. And we need to get all of the expert growers in this region onboard.”

As well as doing what it can to position Hawke’s Bay to take advantage of hemp’s business potential, Kanapu is also helping with efforts to strengthen the industry at a national level.

The company has been at the forefront of the formation of a coalition of businesses involved in the hemp industry.

That entity is called MIHI (Movers in Hemp Innovation) and is focused on identifying opportunities within the sector.

“We’ve identified there is a significant need for government and private sector resources to be dedicated to establishing a sound understanding of the market trends offshore so that we understand as a country where our unique point of difference can be best had,” says Isaac.

“There’s a lot of work that needs to be done to understand the growth of the industry on an international scale but also to understand where, within that global industry of foodstuffs, New Zealand has its unique point of difference. As a coalition partner we’re working towards that in conjunction with government.”

Isaac says the first meeting of MIHI founders was held at Ludlow Estate earlier this year and about 30 companies have now become involved in the grouping.

“Since then we’ve developed a memorandum of understanding and formalised a coalition as a government partner, representing industry in this area.”

Kanapu.co.nz

Hawke’s Bay Breeding Brilliant Youth in Business

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A team from Woodford House has won this year’s Young Enterprise Scheme for their product – an environmentally friendly fruit label.

Sarah Wixon, Rylie Bensemann, Zoe Rookes and Maggie Peacock featured in the previous issue of The Profit and took out the top award for their water soluable sticker that aims to reduce waste and encourage consumers to wash their fruit.

65 Hawke’s Bay YES (Young Enterprise Scheme) teams started up a business this year with each team coming up with an idea of a product or service and then undertaking market research to see if their great idea would sell and then took it to market.

The teams came from 15 Hawke’s Bay secondary schools and were either year 12 or 13 (6th & 7th form). Over the course of eight months students completed three YES challenges which determined the top six teams in the region. These top six teams competed in the YES finals on 24 October at EIT.

The top six Hawke’s Bay teams were;

  • Empressa Central Central Hawke’s Bay College
  • MyTapp Woodford House
  • Poncho Me Iona
  • Project Rangatahi EIT Business Enterprise Unit
  • Bayuble Woodford House
  • Lightning Lock Hastings Christian School

The competition was fierce, and the judge’s decision was a tough one as the team results were so close.  “We didn’t know who the Hawke’s Bay Champion was until the last moment as the judges were torn and therefore had many discussions before a winner was chosen” says Karla Lee, Hawke’s Bay YES Regional Coordinator.  However, there could be only one winner and the team who took the overall title was Bayuble from Woodford House.

Bayuble have created an alternative label to stickers for fruit.  The team impressed the judges with their strong presentation, innovative product and commitment to research.  Bayuble will now be offered the opportunity to pitch at the Pan Pac Hawke’s Bay Business Awards on Friday 16th November to fine tune their delivery before heading to Wellington to represent Hawke’s Bay on Thursday 6th December where they will compete against 20 other New Zealand regions.

Hawke’s Bay also have two teams that won National Excellence Awards.  The teams were not told which award they have won but they are both invited to Wellington in December to accept their respective award.  These teams are;

  • George St Johns College
  • Letz Lead Hawke’s Bay Prison

The finals and awards are a celebration for YES teams “the awards evening highlights the brilliant work of our youth in Hawke’s Bay and what the future holds.  It takes courage and hard work to achieve the results these teams have accomplished and I couldn’t be more proud of these amazing young entrepreneurs” says Karla Lee.

If you were unable to see the evening in person, you have the opportunity to see it on the Hawke’s Bay Chamber of Commerce facebook page  https://www.facebook.com/hawkesbaychamber/

You can also see Bayuble pitch at the Pan Pac Hawke’s Bay Business Awards that are open to the public.  For tickets please go to https://www.hawkesbaychamber.co.nz/

Hawke’s Bay Airport sets date for stage 1 opening

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The first stage of the $20.2 million Hawke’s Bay Airport expansion will be ready to welcome passengers to the region on January 15.

Hawke’s Bay Airport chief executive Stuart Ainslie said the finishing touches are being made to the new arrivals hall which will include the airport’s first automated baggage system that will have the capacity of 2.5 million bags/annum.

Mr Ainslie said stage 1 of 698m2 could have opened prior to Christmas, but with it being the airport’s busiest period, it is better to open in mid-January.

“We’re now doing the internal fit out, but it’s important that we don’t create any unnecessary stress at this time of the year for passengers, visitors and our commercial partners. The new arrivals area is in the new-build part of the airport which has enabled the current airport to operate smoothly without disruptions, so it’s best we continue as is.

“We can open when it’s a bit quieter and if there’s any problems we can resolve these without too much pressure,” Mr Ainslie said.

The airport recently announced a record turnover of $6.6 million and annual passenger numbers of 715,000, up 8 percent on a rolling year.

The continued growth and confidence enabled the terminal upgrade to be revised from 2500m2 to 4340m2, a 74% increase including new commercial/retail opportunities within the terminal at a budget of $20.2m.

“We have been able to finance the expansion from our strong balance sheet, which is a great position to be in.”

Mr Ainslie said along with the baggage reclaim system the new arrivals hall will incorporate rental car kiosks and a pop-up café.

The automated baggage system spans 14 metres in length and has the capacity for over 350 bags an hour. It can be modified into a T shape conveyor to increase capacity as the airport continues to grow.

There will be no direct access from the new arrival’s hall to the departures area of the terminal during the next stage of construction. While this is not ideal the distance between the two areas is not extensive and the airport is confident that passengers will be understanding of this temporary situation.

Mr Ainslie is also quick to point out that although it is very exciting to open the first stage of the terminal the “full wow” of the Airport Expansion Project will not be revealed until the redevelopment is complete in mid 2020.

“We have a fully operating airport that is being redeveloped in stages, which does build excitement and anticipation of what will be the final reveal in 2020 but at the same gives glimpses of what will be the end result.”

“We’re spreading the airports wings and we want to deliver a place that provides visitors with a true taste of Hawke’s Bay and we are working on some exciting projects which will help create something that showcases the best of what Hawke’s Bay has to offer whilst enhancing customer experience.”

The company has also commenced work on a 20 Year Airport Masterplan with a vision of being New Zealand’s most vibrant and successful regional airport and reaching 1 million passengers a year by 2025. The masterplan will include wide community and stakeholder consultation over the next 12 months.