World-Leading Practices for Long-term Value
ZZ2 is the brand name for a farming organisation which now supplies more than 40 percent of commercially traded tomatoes in South Africa.
It is a fast growing player in the production, packaging and marketing of avocados (avos) while onions and deciduous fruit are also gaining importance in the fruit and vegetable basket offered to customers. Livestock has always been part of the ZZ2 value proposition and includes a Pinzgauer cattle herd from the Austrian Alps and the indigenous Nguni cattle. From these two breeds, a new breed has been developed at ZZ2, the PinZ²yl.
Farming operations are spread across South Africa, the Group consisting of various independent companies managed under the ZZ2 umbrella with a turnover exceeding R1 billion per annum. ZZ2’s employees match this status by increasingly representing a multicultural African society within a multilingual environment.
The company extended the services provided to the internal convertors of production, packaging and marketing value with carefully considered joint ventures. It has significant shareholding in an international commercial seedling nursery, an online fresh produce trading platform, a box manufacturing plant, a staging depot for fresh produce, and production facilities for biological inputs to compost, compost tea and fermented plant extracts. Joint ventures in primary production include a date farm in Namibia on the Orange River.
Inspiration and missions
The ZZ2 trademark is a well known brand in South Africa. Originally a cattle brand it has become associated with the company and excellence. The Sepedi/Northern Sotho phrase “Ke Tswa Tsweo” was added to the trademark in 1994 and literally means “that’s it!”
In the mid 1990s, ZZ2 implemented the “open system” or “living system” business philosophy, which demands a long-term view to create value for all stakeholders of the company rather than chasing short-term profits for shareholders.
The company is therefore managed as an open and living system based on the following ethical norms (values) which are implemented as preconditions for any orderly and civilised society:
• “Prudentia” (thoughtfullness, wisdom, vision, integrity)
• “Justitia” (fairness, honesty, impartiality, humanity)
• “Fortitudo” (fearless without wavering, with energy, perseverance, endurance, dauntlessness)
• “Temperantia” (modesty, self-restraint, selflessness, tolerance)
ZZ2’s inspiration (vision) is to be the benchmark of success in agriculture, creating sustainable value for its stakeholders as a living, open system. The mission is to deliver high quality, primary agricultural products to clients looking for value and practices are in place to optimise resources and are based on principles that are ethical, environmentally friendly and economically sustainable.
ZZ2 is a world leader in extensive, nature-friendly agricultural practices, also known and registered as Natuurboerdery® or translated into English; nature-friendly farming. It is a break with the deleterious effects of industrial farming and includes some of the more sane concepts of organic farming.
A centre was established to research (with the help of local and international experts) and mass produce compost, now universally apllied to all ZZ2 crops, and an array of biologically based pest and disease control agents. The concept and techniques of Natuurboerdery® are attracting much attention as an alternative to unsustainable industrial farming and unproductive organic farming.
In today’s times it is a fact that people are demanding healthier food. Therefore FoodHealth is ZZ2’s promise and healthy soil is its passion. By embracing nature and implementing Natuurboerdery® principles, healthy products are delivered.
In line with this, ZZ2 decided more than 20 years’ ago to farm with avocados. Avocados have been identified as one of the superfoods of the world, being absolutely packed with heart-healthy nutrients, monounsaturated fats and essential omega-3 acids. In the past five years, ZZ2 started to aggresively expand it’s avo production. Avocado production surpassed 8,000 tonnes in 2012 and is growing exponentially with 70 percent exported mainly to Europe.
Looking at the per capita consumption of avos worldwide you will find that Mexicans consume nine kilograms (kg) of avos a year; Chileans, four kg a year; Israelis, four kg a year; Americans, 2.5 kg a year, Europeans two kg a year; and South Africans, only 0.8 kg a year. ZZ2 therefore identified a huge growth potential in this market segment. In addition, South Africa is ideally situated to service the East (India, China, Indonesia, Malasya etc) where there is a huge untapped market.
Taking all the above into account, ZZ2 has deemed it necessary to expand it’s packing facility at Boekenhoutbult Farm, Mooketsi. ZZ2’s own team of engineers tackled this project with great enthusiasm, from design to completion. The packhouse is presently being constructed and was completed at the end of March, 2015.
ZZ2 supplies fresh produce to consumers in a carefully considered value channel. Products are sold to retailers, wholesalers, hawkers, re-packers and food processors via sales commission agents.
The sales commission agents operate on a retail and wholesale level. Prices are discovered by balancing supply and demand. This process is supported by a comprehensive system called FGX (Farm Gate Exchange, an online trading platform) where the goal is to aggregate volumes supplied and demanded with prices paid, enabling an environment for an industry-wide functional market for efficient price discovery.
The agency system of selling is employed with remuneration based on ad valorem commission for sales functions performed. These synergistic systems bring exceptional reach in terms of area covered to customers and ZZ2 alike. Special attention is given to different offered products; in terms of packaging, variety and taste, continuity, and reliability of supply and quality.
ZZ2 markets its avos under the name Afrikado and all its fruit exports are done through Core Fruit; exporting around the world.
An exciting journey
At the same time as the construction of ZZ2’s packhouse, the company is also establishing ripening rooms at its staging facility, ZZFresh, near Lanseria Airport, Johannesburg. ZZ2 cooperates with Mission Produce, the biggest supplier of avos in the world, to understand how to ripen and market ripe and ready avocados. This will enable ZZ2 to supply its customers with ready-to-eat avos throughout the year.
ZZ2 is of the opinion that providing consumers with ready-to-eat avos will boost the local consumption from 0.8 kg per capita to the level of other countries with the same per capita income, such as Mexico and Chile.
ZZ2 is endowed with a sound and ethical corporate philosophy. The aims of environmentally sustainable and affirmative value creation for all its stakeholders through the open-system approach should safeguard its sensitivity and mobility in any conceivable environment. It should also ensure the relevance of ZZ2 as a sustainable value creator to all its stakeholders over the short, medium and long-term.