Issue 53: Olympic Victory For Hydroponics

Issue 53
July/August – 2000
Story Title: Olympic Victory For Hydroponics
Author: GEOFF WILSON

Australian hydroponics produce is a major winner in the Sydney 2000 Olympiad and the Sydney 2000 Para-Olympiad. GEOFF WILSON explains.

Australian growers of hydroponic produce will have an Olympic victory in Sydney, Australia, next September. They are being called upon to supply extra vegetables for over 25,000 athletes and officials, and up to 8 million spectators during the three months from 1 August to 31 October of both the Sydney 2000 Olympiad and the Sydney 2000 Para-Olympiad afterward. The main hydroponic crops in demand for Olympic supplies are tomatoes, lettuce, cucumbers, capsicums, eggplants and strawberries. But hydroponic flower growers will be big winners too.

A major long-term benefit of the Sydney Olympics is expected to be an expansion of demand for hydroponic produce in Australia as quality hurdles are raised in food service and retailing. Hydroponic produce is being favoured by suppliers of around 13 million prepared meals, especially pre-packed salads, because:

* Hydroponics offers an assured supply of high quality produce. Seasonal growing in soil, under the vagaries of nature and pests and diseases, cannot offer the same guarantees of production to the same standard of quality, and on time.

* Hydroponic growers can meet the stringent catering specifications set by the Sydney Organising Committee for the Olympic Games (SOCOG). Hydroponic produce will be used by licensed Olympic caterers as well as many Sydney restaurants and other food service establishments, which will help to feed the Olympic multitude.

One of the leading Olympic providers of prepared salads based on hydroponic produce will be the Moraitis group of companies. Headquartered in Sydney, this family business group has 13 companies operating along Australia’s eastern seaboard in both growing and wholesaling fresh fruit and vegetables. Moraitis has around 900 of Australia’s 2,500 commercial hydroponic growers on its list of approved suppliers of high quality produce. The group has become a major influence on the future outcome of a big proportion of hydroponic investment in Australia, and gives a lead to what could happen in other countries where the hydroponic industry is now becoming a fresh market force.

Sydney’s Olympics later this year can be expected to further boost Moraitis outreach into buying, processing and marketing hydroponic produce for both retail and food service markets. While it will distance many hydroponic growers from their ultimate customers, it can also be expected to trigger alliances of hydroponic growers.

Phenomenal and continuing growth of Moraitis and similar wholesaling companies is worth understanding in this context. They can be expected to continue to set standards and prices for both hydroponic produce and the soil-grown produce that are directly competitive with hydroponic growers.

Such a position of market leadership is a long way indeed from the 1950s, when Mr Nick Moraitis, the group’s chairman, began his family’s unique vegetable wholesaling operations by delivering 75 kilogram bags of potatoes to Sydney’s retail shops, restaurants, fish shops and other sales outlets. Today, the Moraitis group is still very big in potatoes – including the growing of large quantities of potato at a property at Narrandera, in New South Wales. The group now grows or buys some 100,000 tonnes of potatoes a year.

The group’s growth in wholesaling other soil crops, such as carrots, tomatoes and capsicums, has led the Moraitis family into a steady expansion of fresh vegetable processing for packaged salads for supermarkets and restaurants. Expansion in value-adding of fresh produce has also led the group into juicing oranges, for example, and the marketing of up-market fruit baskets as gifts or presentations at corporate events.

A master-stroke of marketing savvy by Moraitis has been its adoption of ISO 9002 quality standards and HACCP (Hazard Analysis Critical Control Points) quality control procedures. It has come at a time in supermarket and food service buying when regulatory standards for all food have been changing under stricter rules by government, on behalf of consumers.

It is in this fresh produce market change that both Moraitis, and hydroponic growers supplying to their high standards, come out as joint-harness winners – both for the Olympic Games, and for the long-term marketing of an expanding range of key vegetables in salad mixes.

John Christopoulos, National Marketing Manager for the Moraitis group, underlined this point when he revealed: “Our purchases of hydroponic produce doubled in the last year; they will probably expand significantly again as a result of our commitment to the supply of salad mixes to the Sydney Olympics from August to October this year.”

Mr Christopoulos believes that the Moraitis company’s total commitment to the new food standards in Australia, and the development of strategic alliances with an expanding group of hydroponic suppliers capable of meeting higher standards, will be a big factor in continuing expansion of the fresh vegetable market. It may also bring in many new hydroponic suppliers to Moraitis, and other wholesalers, as hydroponic investment is placed on a sounder basis of marketing.

A former retail industry executive, Mr Christopoulos did not rule out vertical integration by Moraitis into hydroponic vegetable growing – similar to what the company has done in potato production. However, the company’s principal interest is in “getting it right” with a range of preferred suppliers of top quality produce, so that supermarkets and others have every reason to expand their purchasing of both processed and unprocessed produce.

A key executive in this equation is Matthew McInerny, Sales and Marketing Manager of the Moraitis group’s Fruit and Vegetable Division. Based in Sydney, Matthew is a former retail buyer in fresh produce. He is in constant contact with Moraitis’s hydroponic suppliers, to help them maintain the quality standards so necessary to win supermarket and food service sales.

The ISO 9002 and the HACCP standards now filtering down to the hydroponic industry in Australia will now give it great strength. Mr McInerny said the hydroponic industry in Australia has matured in the last five years to a new stage of sophistication. In his view, the Sydney Olympics will greatly help expand Australian hydroponics, especially as those hydroponic growers who missed out on the Olympic opportunity make renewed efforts to be on the company’s “preferred” list.

“The Olympics is showing the fresh vegetable industry as a whole that only hydroponic growing can cope with the assured supply of high quality produce that has consistently good flavour and appearance,” he said.

Mr Christopoulos added: “During the Olympics we could not tolerate a catastrophic storm in the north, which could wipe out field crops of lettuce. This is unlikely to happen with hydroponic lettuce growing from the eastern seaboard States in which we operate.”

Yes, the Sydney Olympics will certainly be a big win for hydroponic growers in Australia. And the higher standards in operation, and strategic alliances of growers with wholesalers, can be expected to be a good model for other countries to consider.

Geoff Wilson is an eco-journalist and regular contributor to Practical Hydroponics & Greenhouses.

Email: fawmpl@powerup.com.au

Price Advantage
Australian hydroponic growers have a price advantage over growers of field crops, because of their capability to supply higher quality produce consistently. This is the view of John Christopoulos, National Marketing Manager of the Moraitis group. He confirmed that the experience of hydroponics growers and wholesalers in the United States, where a price premium of 10% at wholesale level and about 20% at retail level, is similar for hydroponic produce in Australia.


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