Brad Mytton: Phil, welcome. Can you give us a bit of an introduction on Pace Farm and tell us where the business has come from?
Philip Wiese: Yeah, it actually started as a market gardener, Frank Pace.
They had a market garden and from there they, you know, the chickens and the eggs slowly build up and the egg business overtook the market garden.
And today we've grown in keeping with our vision of eggs for everyone, we've grown into Australia's largest producer of eggs and egg products, but also the top tier marketer of eggs in Australia.
This vertical integration we have right from breeding all the way through to egg products, gives us a level of control over where our product ends up at, the quality, the supply chain all the way through.
Brad Mytton: And in terms of the customers, what trends are you seeing coming out of the customers, coming out of the supermarkets, coming out of the non-retail channels?
Philip Wiese: Yeah, the macro trends we see is affordable, sustainable protein. And eggs fit that bill perfectly.
Another one is animal welfare and making sure that we look after the animals under our care, but then also low carbon footprint. And that's where eggs come in as a super sustainable animal protein because of the very low carbon footprint we have.
Brad Mytton: And can you tell us about the different formats? Obviously free-range, barn, a little bit of organic, how does that all gel together in terms of the different customers?
Philip Wiese: Once again, it's in keeping with our vision of eggs for everybody. We know there's different needs from consumers, right from there's the price conscious consumer all the way through to people that's looking for a free-range egg. And we try and cater for everybody in that supply chain.
But in terms of the different standards, we actually get audited through ESA, there's quite rigorous audit standards around that.
But then also making sure that the supply chain, you know, if it comes out of a free range shed, that it ends up in a free-range box and ends up as a free range product.
So a lot of audit and supply chain cheques and balances in place for us there.
Brad Mytton: And Phil, the nature of private equity ownership means that we do have a strong bias towards growth. Can you talk us through some of the growth initiatives in front of the business?
Philip Wiese: Yeah. It's in keeping once again, with making sure that we have the right protein available to consumers and we’re investing quite heavily in making sure that we have the type of product available that consumers are asking – free range to barn.
And that's why we're currently building two new sheds at Marella and investing about $30 million in those farms. But that is ongoing year by year, we'll keep building on that momentum we've got at the moment.
And that's where private equity comes in. So it's not just growth for the sake of growing, it's making sure we grow right, but in the right manner.
Brad Mytton: Sustainability and animal welfare practices are two areas that everyone's focused on. Can you talk us through what Pace is doing in that regard?
Philip Wiese: Yeah, that's something that's actually quite near and dear to us.
We're in the midst of developing our sustainability framework that we’ll launch in the coming month and that is something that we will take end to end our farming practices, whether it's solar, how much water we use, all of those are pretty key inputs into our production system for us.
Our carbon footprint is some of the lowest animal proteins out there.
So on the sustainability side, super important to us, but so is animal welfare. We've got, once again, rigorous audit standards in terms of how many hens we can house, what the ranging area should be per hen.
So once again, something we take pretty seriously in terms of our credentials in that space, but making sure that we encapsulate that, put it in our sustainability framework and put it out to the world so people can see, what we do and how we do it.
Brad Mytton: And in terms of technology and innovation, what role do you see that in the egg production systems in Australia?
Philip Wiese: Yeah, it's like any farming business these days. We have to be as efficient as we can be.
So upgrading our ERP system. And as part of that, once we've upgraded the back end, we'll move into the sheds in terms of continuous monitoring of the bird health, temperatures, in terms of air flow.
And that will all get fed back to be monitored centrally back in any location effectively. And that will make sure that we provide the hens with the optimum environment to live and lay eggs in.
And you know, much more than an individual human can come and walk down into a shed, this will be 24/7 monitoring and alert system that if there's an issue, we will be alerted and then we can step in and once again, make sure that the animal is as comfortable as possible and hence improving the animal welfare.
Brad Mytton: So this is a clearly a self-serving question, but what benefits, advantages and value add have you seen coming from private equity?
Philip Wiese: Brad, that's actually for us as a business that needs capital, having access to patient capital is super important.
You know, farming business is not a widget factory, it takes a bit of time and investment to get the product back out. So that was probably one of the key things for us.
And as an industry that's going through a whole lot of consolidation, access to M&A skills and making sure that we've got the capability of actually critically looking at businesses that's up for sale and available to us, it was super important.
But then also and on the strategic side, it's fantastic just to have a sounding board there, someone that you can pick up the phone to, you can just ask the question. And that's not part of the day-to-day hustle and bustle within the business. And is a bit more removed out of the business and it's a bit more of a strategic guidance and help.
But then also on the board side, the governance, in terms of making sure that we've got all the governance structures, cheques and balances in place as any growing business or any business for that matter would need.
Brad Mytton: That's right, Phil. You've managed to build a very successful team, you've got a team below you at the exec level, which are all very high performing, in turn there's a lot of work going on down the organisation and we're seeing the benefits of that starting to show through. What other things are out there? Where do you see Pace going in the next three to five years and what are the goals of the business?
Philip Wiese: Yeah, we've touched a bit on this. But for us it's first of all making sure what we do, we do to the best of our ability.
That efficiency, you know, and that's where smart farming comes in. The team, as you've alluded to, those things all support making sure what we've got we do to the best of our ability.
And then after that is expansion, staying up with consumer demands, making sure that we grow in the areas that the consumer actually needs and wants.
But then also, going forward is making sure that we keep that structure in place, making sure that we have the right team in place as part of that expansion program we're on.
Brad Mytton: Phil, thanks for having me on farm. It's been good to see the operations again and hear more about what you're doing at Pace. So thank you.
Philip Wiese: No, it's an absolute pleasure to have you here. And once again, thank you to you guys for the support you've given us over the last few years. We really appreciate it.
Brad Mytton: Thanks, Phil.
