Late in the evening of March 18 2020, Mpac managing director Brendon Lee was wide awake, trying to second guess the mindset of Wellington officials in whose laps the fate of his newly built packhouse business rested.
As New Zealand entered covid lockdown, those officials were tasked with determining what industries would be deemed “essential” and therefore able to continue operating throughout.
“I was asking myself whether kiwifruit really would be seen as ‘essential’ or just a ‘nice to have’, compared to, say, vegetables, meat and potatoes.”
Fortunately, fate and bureaucracy smiled on the industry, which along with viticulture was able to proceed with the season’s harvest and processing, earning billions in valuable export dollars and saving Mpac’s newly minted packhouse operation in the process.
The young entrepreneur had, along with business partner Jan Benes, just overseen the completion of their Mpac (mount pack and cool) facility.
The intensively automated operation sits in a relatively unconventional location at Tauriko, a Tauranga industrial site.
That year, with its social distancing restrictions on shifts and staff, was a tough baptism for the plant.
But since that rocky start Mpac has moved quickly to stake a claim as a major sector player from processing about six million trays a year in 2018 to 22 million this year, claiming 12% of the post-harvest tray market.
“So, we have experienced about 400% growth since commissioning and can claim to be the most highly automated kiwifruit processing plant in the world.”
The plant’s IP is a closely guarded secret, with video and photos tightly controlled.
Lee said there are multiple features developed after he and Benes took a look at what was available globally, then came home to seek more bespoke solutions.
“We were relatively underwhelmed by what we saw in Europe and Asia, and it really spurred us to design our own, working with some large players in the automation sector including MAF, Compac and JMP.”
They also managed to get the competing companies working together with them on the project.
With automation eye-wateringly expensive, Lee said the temptation is to look at the capital outlay and try to trim it, but that is usually the worst mistake to make.
“You have to allow for redundancy in technology, for breakdowns and maintenance, and that requires back-up plant capable of being switched in quickly.”
In the competitive post-harvest business, loss of processing consistency and breakdowns will see growers quickly move to another operator who can instead pick and process their crop.
While the initial capital cost is high, the automation move has meant Mpac has sliced its labour well back below industry averages.
The savings have equated to a competitive edge of about 50c per tray processed, compared to the industry average cost of about $4.00 per tray.
“For any grower that is a material amount”.
“And we now have a long-term sustainable model when it comes to labour. The reality is people do not really want to work in packhouses doing manual jobs, and you don’t want to be holding your breath every season to see how many staff you will be able to get.”
He has also witnessed a shift in staff profile as they have taken on board higher skilled, permanent staff skilled in areas of automation, programming and maintenance.
“Growing aggressively as we have does require people of a mindset who do want to move with the changes.”
Lee is conscious Mpac has proven to be a disruptor in the post-harvest industry. In coming years, he can see further consolidation among the main players as companies scramble to chase Mpac’s automation advantages.
Mpac’s centralised hyper site in itself slices off costs against competitors who often have multiple facilities scattered throughout the region.
Future tech developments for his company have him now looking hard at what AI can deliver.
Given the high volume, repetitive nature of single fruit processing, the technology’s ability to scan, assess and grade fruit is obvious. It is tech he can see being applied from first orchard assessment prior to picking, right through to determining what fruit to release to Zespri at different times of the year to meet overseas market needs.
Kiwifruit has had a tumultuous ride throughout its history, with recent years no exception, but Lee is optimistic about its prospects.
He sees plenty of upside in SunGold’s growth in particular through a marketing system that, while not perfect, continues to deliver positive returns to growers in a huge global fruit market.