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Selling two million museli bars per day, with 265 staff and big exports sees local firm top $100 mln in revenue - 'just getting started'

Posted in Business
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By Andrew Patterson

There aren’t too many NZ owned food companies still in business after 80 years.

Even fewer could claim a production rate that would allow them to supply one of their products to every New Zealander every 48 hours.

Tasti Products has achieved both of these milestones, producing on average 2.1 million muesli bars every day at its sprawling West Auckland production facility. By any measure, that’s a lot of muesli bars and gives you some idea how popular the snack bars have become with kiwis.

The Te Atatu based manufacturer has enjoyed significant growth over the last decade that has seen its staff numbers triple and its annual turnover increase to more than $100 million.

Official recognition of its recent success came last week when it was named supplier of the year by supermarket operator Woolworths.

Founded in 1932 by local identity Vic Watson, in the midst of the Great Depression, he grew the business by producing a range of baking related food products. Glazed cherries became one of Tasti’s staple products, which remain part of the range to this day along with citrus peel, fruit mince and Christmas cake mix forming what Tasti now describes as its “heritage range.”

In fact CEO Bryce Howard says the company has appropriately named the section of its manufacturing facility devoted to producing these products as Middle Earth.

“However, over the last decade that part of the business hasn’t grown that much and about ten years ago we switched our focus to nutritional snack bars which now account for around 70% of our business.”

“What we’ve noticed in recent years is how much things like the content of the school lunch box have changed. In the past it used to be sandwiches and homemade baking. These days it tends to be convenience products such as muesli bars that have become the snack item of choice for busy mothers.”

Evolution of the snack bar

So how did the muesli bar originate in the first place? “Our range of muesli bars probably evolved from our traditional snack log which we still manufacture to the same formula as we did when it was first created in the early 70s. However, developments in food technology and customer demand for more low fat product offerings have required us to expand our product range.”

These days Tasti produces more than 300 different products with the healthy food message working in its favour including its production of several snack bar products manufactured under licence to Weight Watchers.

“While we produce snack products that are high in fibre and low in fat, it’s a matter of everything in moderation. We obviously don’t promote living on muesli bars, but it’s about giving parents and kids a product that gives them an appropriate energy boost.”

Staff

What makes Tasti’s extensive manufacturing operation somewhat unique these days is its location in a residential street in the heart of the West Auckland suburb of Te Atatu. Surrounded by houses the sprawling warehouse and manufacturing plant dominate the location it has occupied since its inception with the added benefit that many of the company’s staff living locally are still able to walk to work.

“That’s very unusual these days but it clearly creates a two way benefit. We’re also a big supporter of West Auckland and our local community.”

Bryce Howard says the company remains committed to its New Zealand roots and has never considered moving its manufacturing offshore.

“I’ve been there, done that and New Zealand is not only a fantastic place to live but also a great place to do business. We enjoy taking on our Aussie competitors by manufacturing from here and we achieve a much higher product quality by basing ourselves here than would be the case if we were located offshore.”

Australia

With Australia now its biggest and fastest growing market accounting for around 50% of the company’s sales, Tasti literally has a foot planted on each side of the Tasman proving that you can successfully take on our larger neighbour from this side of the ditch.

“Ten years ago our Australian sales would have represented less than 5% of our total revenue but these days it’s a significant part of our business. We’re still a small fish in a big pond, but we love fighting the Aussies at their own game and in the end they seem to like buying NZ made products.”

“We’re really achieved that growth through innovation and maintaining a real can-do attitude. So often the larger corporates have their own particular way of doing things that tends to make them quite slow at responding to market trends but if we want to do something we just go ahead and do it. We’re not held back by those corporate constraints.”

Despite the rapid growth of the Australian market Tasti has made the decision to continue to base its entire staff, including its sales team, on this side of the Tasman.

“It just means that we have so much more control over what we do and when we do it. It also means that customer feedback comes directly into our manufacturing facility which is important. We have staff in Australia today visiting customers and tomorrow we’ll be getting reports back about those visits and we feed that directly back into our production schedules.”

The growth of Tasti’s business over the last decade has also necessitated a significant upgrade and investment in its manufacturing plant. State of the art robotic systems have removed the need for process workers to undertake many of the more mundane aspects of packaging and product assembly allowing them to be redeployed into other more productive roles on the factory floor.

“Ten years ago we had around 70 staff running a very manual production system. Today we have 260 staff running what is probably the most technically advanced muesli bar manufacturing facility in the whole of Austral Asia.”

“We produce around 10 million muesli bars a week. Our plant runs 24/7 Monday to Friday and the automation we have been able to achieve has given us a significant competitive edge.”

“We have two major customers in NZ and three in Australia and we have to do everything to keep them on side.”

Wander down the snack bar aisle of your supermarket and you quickly realise how crowded and intensely competitive the category has become.

Being able to stand out from the crowd and attract the discerning customer dollar is critical in the fast paced FMCG environment.

“We’ve done that through product innovation and maintaining a strong brand presence. We actually re-launched the Tasti brand 18 months ago to really promote the longevity and heritage value of the brand along with the fact that we’re 100% NZ owned and operated verses our competition, all of whom tend to be owned by either private equity or overseas interests.”

“Our growth potential and our focus from here will be to continue to increase our market share in Australia. Our goal is to double the size of the business again in the next ten years.”

Producing four million muesli bars a day by 2022 doesn’t seem such a daunting goal based on Tasti’s growth rate to this point. They’ll only be hoping customers don’t lose the taste for them between now and then.

 

KEY FACTS

Sector: Snack foods / FMCG
Founded: 1932
Staff: 265
Turnover: NZ$100 million
Annual growth rate: 15% over the last five years
Biggest market: Australia
Emerging markets: Asia and Middle East
Domestic / Export sales split: 50% / 50%
Profitable: Yes
Recent Highlight: Named 2012 Woolworths Supplier of the Year
Ownership: Private (100% owned by Hall family and associated interests)
Website: www.tasti.co.nz

 

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3 Comments

Another Kiwi success story ,

Another Kiwi success story , proving that we can maintain a manufacturing industry even with a comparatively strong dollar , and that management can see the benefits of keeping production at home ....
 
.... you're wrong , Dr Gareth Morgan , there still is a place in the NZ economy for a vibrant manufacturing industry ....
 
Andrew Patterson's articles on Tasti and on Sistema have shown us the successful route to take ...

It's great to see a NZ based

It's great to see a NZ based manufacturing business being so suceessful.  IMHO a large factor in this success story is that it is a privately owned company and therefore the owners are able to take long term decisions without worrying about short term fluctuations in the equty markets.  I hope that other NZ businesses are adopting similar strategies.  

I agree, they have been a

I agree, they have been a well managed business for a long time. I had dealings with them ten years ago and they were a great company to deal with then and I was impressed with their overall approach at that time ...great to see they have moved forward well.