The production and export of both grapes and citrus products has distinguished South African-based fruit farming Company, Denau within a competitive market over the decades, and it is now looking towards conservative profits to ensure long-term success through innovation and careful custodianship.
FOCUSED AND FRESH
The producer, packer and exporter working out of Hex River Valley, 140 kilometres northeast of Cape Town, has thrived from origins which date back to the mid-1800s; instilling a flexibility within the business that can only derive from in-house expertise comprising its own packing, sorting and cooling facilities.
Arguably the business’ greatest asset though emanates from the consistency and dedication that is achieved through being a family business; the current incumbent of which – Managing Director (MD), Fanie Naudé – realising all too well how much of a competitive advantage tradition and heritage can be in the agricultural sector.
“Denau is a family fruit farming business and is currently managed by the fifth and sixth generation of the Naudé family that has farmed in the Hex River Valley since 1841,” he notes. “Our receivers are mainly in the EU and the UK now and over time we have built up a remarkable business relationship with a shortlist of highly valued, reliable receivers.
“However, much of the expansion and consolidation of today’s Denau has been implemented by Pieter Naudé, the current chairman, since the 1980s. He started farming in 1976 on the Welgemoed farm with 28 hectares of table grapes, and through the acquisition of more farming units – over time – the farming operations have increased steadily to our current 210 hectares of table grapes and 120 hectares of citrus under production.”
Such is the relationship that Denau shares with each of its clients; the Company has an ethos whereby it would only prefer to look to expand its export footprint further if it could do so with its existing receivers, affirming a business philosophy that is compounded by an ongoing adherence to continuous improvements and sector expertise.
Naudé continues: “From a productivity perspective, we have a proactive, professional management system with clear, measurable critical performance indicators, and we remain in touch with local and international industry developments to drive these systems through attending industry workshops and conferences.”
Over the years, it has not just been the processes and methods that have evolved, but most importantly, the product range has diversified also; targeted specifically towards consumer preferences.
“This includes producing preferred products and packaging them in preferred packaging types,” Naudé explains, “and over the past few years our citrus production has moved from hard citrus to mostly easy peeler varieties such as clementines and late mandarins”.
He continues: “On the grape side, we have moved from seeded varieties to mostly red seedless grapes such as crimson seedless. As consumers prefer purchasing pre-packed fruit, our products are now also marketed mostly in pre-packed offerings.”
This epitomises a general balance that Denau has strived to find between organic growth of a successful business model, and more concerted, proactive innovation to drive ahead of the market.
“Denau introduced the production of citrus to the Hex River Valley when the first 50 hectares of citrus orchards were planted in 1989. As a result of this pioneering initiative, Pieter Naudé was named Western Cape Farmer of the year in 1999,” Naudé reflects. “Pieter was one of the first producers to start experimenting and introducing drip irrigation in the production process which has since become popular standard practice in our industry.
“Along with drip irrigation, we were also one of the first operations in our area to make use of fertigation, supplying optimal plant nutrition through the irrigation system. These are some of the early examples of the innovative approach that we follow continuously within our production, packaging and logistical operations.”
A more refined growth strategy has been facilitated as a consequence of Denau’s first-to-the-punch quest, with 850,000 cartons of table grapes and 150,000 cartons of citrus now produced each year; and further volume increases expected in the years to come.
The idea of forward integration has also subsequently become a reality, moving away from producing and selling through the single channel marketing system, to the grower-packer-shipper model that the Company adopts as part of its larger value chain today.
Naude says: “We have developed our Denau brand over the years. We have our own identity in the marketplace and as we produce and ship both grapes and citrus, our brand has a market presence for nine months of the year.
“We are proactively growing and developing our brand into the future.”
The Denau expansion story is a living organism, and the latest chapter has witnessed the acquisition of additional farming property and the current implementation of a new 65 hectare expansion of new clementine and late mandarin orchards in the citrus domain.
Incorporating overhead netting to protect the products against the elements; quality, sustainability and consistency are once again at the forefront of considerations and it only scratches the surface of what Denau aims to improve in the near-term.
“In our grape division, we have also just invested in a new Softpro packing system, a revolutionary home grown South African weighing and packing system based on a ‘per berry’’, not ‘per gram’ increment measurement system. The system provides a significant increase in productivity and also ensures the optimum weight and traceability of each punnet or carton,” Naudé explains. “Additionally, we are currently in the process of a complete overhaul of our fruit pack houses and packing systems and through this process we will be introducing a number of new equipment and technologies upgrades.
“We have also recently upgraded our salaries and wages software to the latest VIP systems which will assist us particularly during the busy harvest seasons when our employee numbers increase sharply with the seasonal employees.”
The workforce provides another strand to Denau’s commitment to operational excellence; embracing relevant tertiary training, internal promotion and skills transfer throughout the experience hierarchy to complement a wider all-encompassing corporate social responsibility remit which ensures enrichment of individuals both in and outside of the organisation.
“We promote a positive working environment of our management and staff and the success of this is evident in our low staff turnover figures,” Naudé affirms. “We invest in ongoing training for the entire workforce, thus enabling individuals to grow with the Company and to empower themselves through the continuous improvement of their practical and life skills.
“This also helps towards our goals of further maturing the organisational structure of the business successfully and in taking our business ‘from good to great’.”
The MD concludes: “Our business is farming with products that require long-term planning as well as long-term focus and commitment, and the availability of the skills and resources to sustain this. This is the opposite of annual cash crop production.
“We are in this for the long haul so would rather be content with a conservative profit margin for long-term success than take the risk of pushing productions aggressively with possibly disastrous consequences.
“Through innovation and careful custodianship, we aim to grow the business and present this to the next generation as a successful, sustainable business.”