Progressive Meats – Craig Hickson

Joyce Barry:  Welcome everyone. If any of you don’t know Craig Hickson this is the gentleman, and he’s Canadian … for three months when he was born. [Chuckles] But he was born to New Zealand parents and then he came back to New Zealand. Fantastic family and business history he’s going to relate to you tonight. It’s our pleasure, Craig, to have you here. Over to you, Craig – thank you.

[Applause]

Craig Hickson:  Thank you Joyce, I’ll endeavour to do credit to your turnout.

My linkage with Hawke’s Bay starts on the dam side for you farmers, or on the maternal side for those more politically correct, with my grandmother, Ivy Edith; her mother was a Chamberlain from Masterton and she married Frederick … [chuckles] Chanet who was a Swiss gentleman, and they were married in Masterton and then they moved to take up a block of land when Hatuma was developed. Their property was called ‘Kaiwai’. I haven’t been back to see whether it still exists, but I did a bit of research to remind myself of the history last night before I came in, so I could recall. My grandmother was born in Masterton in 1890, and shortly after that they moved to Hatuma. She was the eldest of twelve or thirteen children, so she had the motherhood [coughing] duties to carry out.

Then to my grandfather’s side – his name was Dan Coughlan, and he was born in 1888 in Tasmania. And the story is his father was a remittance man. I wasn’t sure what a remittance man was so I looked it up before I came back, and apparently … it was normally from England … from middle to upper class families who sent their wayward sons offshore with a remittance so they wouldn’t come back. Normally they were the black sheep of the family, and he turned out to be one because they cut his remittance off. And so with that, my great-grandmother then looked to come to New Zealand to find a better life. I don’t think it really worked out, because my grandfather was in an orphanage in Wellington for a period of time, and then at the age of twelve he was working in Ongaonga on a farm. So that’s how my grandparents’ mother and father met – she went to stay with friends somewhere near Ongaonga and met Dan Coughlan and they were subsequently married. They spent their married life in Waipukurau.

Coughlan of course, as you imagine it’s an Irish name, so that’s where the family came from. Chamberlain’s English, so there’s Irish, English and Swiss on that side of the family. Coughlan Road in Waipukurau … Total Products is down the end. I remember as a boy going to Chrisps there; [and the] Power Board used to make the concrete power poles next door, which we found great delight in playing in amongst the sand and shingle. So that was named … they had a relatively small town supply dairy farm, and I can recall at the time when the last of the dippers were there; a billy would be left at the gate and you’d have the dipper and you’d dip the milk out and put it into the billy at the gate. They swapped into bottles shortly after, about the time that I was due to start school.

On my father’s side, going back – in 1859, in a vessel called the ‘Brigand’, Richard Hickson came to New Zealand as a [coughing] Fencible, and he was stationed in Auckland. It was ‘bout the time of the Maori Wars, 1860 or so, and his son, also Richard, married a Maori lady called Meretini Te Akau Horohau, who was the step-granddaughter of Te Rauparaha. That was in Foxton, and one of their eleven to twelve children was called Harold; Harold Hickson went off to the First World War. He was injured in Gallipoli and went [coughing] back to England for convalescence, and met my grandmother, Eileen O’Driscoll, so clearly she’s Irish. She came from a village called Schull – which has got a certain irony seeing I’ve spent most of my life in the meat industry – and that’s in County Cork; her father died when she was young. We’ve been to Schull and I’ve had a look up the records and she was there in the 1904 Census; she was there in the 1911 Census, and then she disappeared. She went to live with an aunt in London as a ward, and then she was a nurse in the convalescent home where she met my grandfather, Harold. They were married, and they first settled in Australia where my father was born in South Australia in 1921. Then my grandfather, Harold, was tossed from a horse and got a head injury, and so he was advised by doctors to move to a cooler climate. So they came back to New Zealand, to Hastings, and they lived out Twyford way; they had a small dairy farm there.

My father was at Mahora School in 1931 on the day of the earthquake, and he told me he was in the playground when it hit, and he told me of the waves coming across the grounds of Mahora School, just like the sea as it rippled through, and it was enough to knock him over, he said. With the damage there the family decided to move, and they went to Woodville and that’s where my father went through on the train each day to technical college. He became a carpenter and then a builder, and when he completed his work those days he met my mother, Shirley Olive Coughlan, so living in Coughlan Road Waipukurau. They were subsequently married and moved back to Waipukurau, onto a small cottage on the farm, off the road. I can still remember where the cottage was, but it’s quite difficult to work it out – it’s now in behind the machinery shops and things that’re in the front. But Denne’s Ice Cream was in Waipukurau, you know, and the Dennes lived on the corner of Coughlan Road. And there was also a man partly down the road called Dan, who used to come and play chess with my father on Christmas Days etcetera, but both of them had a bit of a temper, and if one got ahead of the other the whole board would be wiped, [chuckles] so there was no record of the result.

So … parents were married, and it was probably unusual for the time but they managed to obviously scrape enough money together, ‘cause I doubt there was any family assistance for it, and they went on a world tour on a boat. They ended up in Canada for a year, and my father was working on buildings sites there. And interestingly, I thought that at that stage – and we’re talking 1950/’51 – the Canadian construction industry had moved, where ours did much later than that, [cough] onto the subcontractor basis; so there would be a job and the foreman would come onsite and he would only be the foreman, and he’d hire the people by the day or by the hour. So he’d hire the carpenters or he’d hire the other parties to do the various bits and pieces of work, and hire the equipment in so they didn’t actually have any inventory.

So I was born in Windsor, Ontario in August 1951. And I have been back and I’d have to say there’s not a lot to commend it. [Chuckles] It’s quite a drudgy sort of town; it’s across the Potomac River from Detroit, and it’s all industrial and a bit grimy. It’s probably tidied up a bit now but it certainly didn’t encourage me to want to go back and have another look.

So we came back to live in Waipukurau, and that’s where I started school, at the Waipukurau [coughing] Primary School. I remember I’ve got a picture of a navy uniform, but I wasn’t there for very long; my father being a builder, we moved out of the cottage and he built a house in Racecourse Road which we lived in for a short while. Then he built a house in Freyberg Terrace, which is just a bit further up, and that brought me close to the Terrace School so that’s my first real memory of school is the Terrace School in Waipukurau, and I was one of the inaugural students, ‘cause it was just opened then. We must be talking about 1956 or ’57, so [I] had a year or two there.

And at the age of seven my father decided there would be better prospects for the family further north, and so he bought a section in Havelock North and built a house in Middle Road, and we came up here and I started primary school at Havelock North Primary, where I stayed. Of course they went right through to Form 2 as we called it – I can’t remember the year numbers that that works out to now – and we lived in Middle Road.

And then he bought the blacksmith’s shop [cough] in 8 Joll Road, which is now shops. The smithy was still there when we moved there; de Pelichet McLeod’s were on the corner, and the Connaughts had the pub. The pub still had wooden verandahs and the hitching rail, ‘cause I remember one of the local identities who worked for the Havelock North Borough Council coming up there with his horse, taking him home – Rewi Starnes was his name – [chuckles] draped across the front of it. He used to have a small tractor [coughing, inaudible] … know to go round the [??] with his seal on the back, and of course he was in his own time. But the horse had good control of his destiny. So Joll Road blacksmith’s shop; I remember tetanus injections because of all the nails and things around him. [He] built another house in Rakau Street, and then they moved as I grew. So through Havelock North Primary School, then five years at Hastings Boys’ High. I had five years at Hastings Boys’ High, and that was coming to an end and deciding what to do.

I had thought that I might like to [cough] do science of some kind, although I had in the back of my mind that I’d really like to be in business. And what had influenced me … some of you may remember a TV [television] series in the 1960s called The Power Game, and it featured Patrick Wymark, the actor. It was set in London, and as an impressionable young lad I thought that the mental acumen of these people was something to behold, as they were playing chess games, effectively, in their minds around the power play around the board table. And that left me somewhat with an impression and awe of the power of the intellect around, subsequently, board tables etcetera. I would admit now that I’ve been significantly disappointed, ‘cause I’ve sat round a few board tables [chuckles] and none of them have displayed the degree of acumen or power plays [chuckles] that was demonstrated on this particular programme.

So my last year at high school, actually in a chemistry class, a careers advisor came in and said, “There’s a study grant going from the Hawke’s Bay Farmers’ Meat Company for study in a degree called Food Technology.” I’d already pre-enrolled to do a BSc in Science and I didn’t know in what, but I thought I might do Physics, just because I couldn’t really think of anything else at the time. So I had a look for this Food Technology degree and I discovered that it was Applied Science. So it had a broad range of disciplines through all of the sciences, with maths involved in it; engineering options as well, and it carried a job. And I’d heard the Freezing Works paid really good money, and here was … a guaranteed summer vacation job for a student with no money was pretty appealing; and the prospect of a job but not a contract; so a moral obligation perhaps, to work at that company when you finished. So I applied with two other people for that role and I got offered the scholarship which I accepted.

And so off I went to Massey University, and I started there at a time before in-term assessment was coming in, so that meant that you could fool around and lark in the first half of the year, and then buckle down in the last term. Now unfortunately they changed the rules part-way through, so by the time I got to my third year you had to study all year round, and so the larking sort of got reduced. But I remember it for arriving, starting rugby training, playing rugby, finishing rugby, sitting my finals and then coming home again to work at the freezing works. So I worked there in the May holidays, and in the August holidays and on Christmas holidays, and I had one break in the four year degree course, and I went to Australia to a Campbell’s Soup factory which is much like Wattie’s, in a place called Shepparton, which was much like Hastings. It had about twenty thousand people, and a freezing works and a big cannery, and [coughing] still grass verges on the side of the road, etcetera.

So in my second to last year at university I went down to play … I hadn’t read the paper draw properly to realise that the team I was playing for, Massey A side, wasn’t playing that day, they had a bye … and so I turned up there. And my father’d come down to watch me play; and they said, “Well, why don’t you turn out for the Bs? They’re playing the Army team from Linton”, which I did. And the net consequence of poor technique on my behalf [part] was that in a mis-tackle I had my jaw broken, which I didn’t realise at the time; but at eight o’clock that night when I was trying to drink a beer in a Tavern and the beer was dribbling down both sides of my mouth, [chuckles] I realised as it was stiffening up that perhaps I should get it looked at.

So I went up to the hospital and checked in, and it turned out that one of the nurses in the ward I was in was my wife-to-be, Penelope Helen [Hickson] … still remember my first introduction as I announced my arrival; they all fell about laughing on the floor, ‘cause apparently they’d been expecting someone to come in that [who] would be comatose and on a stretcher. And I walked in and asked if I could have a shower ‘cause I felt that I hadn’t properly cleaned up after the rugby game at [?Matarau?]. So we didn’t actually form a relationship ‘til the following year, but in 1974, the year after I left university, we were married in June. My wife comes from [a] Palmerston North family, and we moved back to Hastings and I took up a full time job with the Hawke’s Bay Farmers’ Meat Company. Having worked as a student through most of the various departments I did know how to sharpen a knife, and I could vaguely do some of the other tasks that were round there on the various floor and production areas as a management trainee.

Now I was quite fortunate in that the Works Manager there, and there were two of them that I was appointed to, didn’t know what to do with me, and so I availed myself of the opportunity by making suggestions to him as to what I might do. And so I’d say, “Well I think it’d be a good idea if I did this”, and he said, “Excellent – off you go.” [Chuckles] And I did. And so I spent pretty much a year and a half on project work, which took me through the full extent of what really is a community in itself; you know at its peak, two thousand people. And they did everything – they could make the barrels for the cooperage for the casings, and they did all of the follow-on facilities and rendering; they had a full workshop and carpentry areas as well as all of the full processing, and it was lamb and mutton. And the logistics were quite amazing when I think about it; this is pre-computers so it’s all done by clerks with pencils and paper. But to co-ordinate the supply of eighteen thousand lambs a day and seven hundred and fifty cattle beasts, and keep track of it all and see the right people get paid the right amount, and the various wool pools; and those who’ve got a farming background will understand the streams that have come from that is really quite an exercise. I can recall the very first Punch adding machine that came there; the head clerk had one and it was on his desk, and that was the only place. And the computer, you’ll remember, was in a room of its own and you’d punch those cards and feed them in, and it had a hell of a lot less power than one of these.

I was there for eighteen months and I was shoulder-tapped by the New Zealand Meat Producers’ Board. They had a project going in Wanganui and they wanted someone with a technology background; they were looking at what was called a vacuum skin packaging – you sometimes see it on hardware tools. But you have a cardboard base and you put like a pair of pliers, and they pull a plastic film over; the beauty of it is … well, it’s very clear, the film, but it forms into the shape of the item itself. So this was an idea for lamb chops to North America; so we’d actually put these lamb chops in trays and draw it over. I commuted from Hastings – we were living in Townsend Street at that time, and so I flew down on a Monday, came home on a Friday night, played rugby on Saturday, saw a bit of the family on Sunday and then headed off on Monday again. [Chuckles] We did that for about three months so I could finish the rugby season; I was playing for Havelock North down here for two years in ’74 and ’75. And then we moved to Wellington where I joined the Meat Producers’ Board.

So what the Meat Producers’ Board did for me was give a national perspective with regard to the industry. I knew it was a relatively large industry, which it is; I knew it was of national importance, and it was more important then probably than it is now, in terms of its scale and its scope. So my time here in Hawke’s Bay with Hawke’s Bay Farmers’ Meat Company gave me a parochial interest; it gave me an inside look at the operations of a very large plant – very large by any standards, and very large by today’s standards – and then a national perspective.

One of the attractions of joining the Meat Board was they had offices overseas, and because I got married soon after university I hadn’t done my OE [overseas experience] and I hadn’t travelled. And I thought, ‘Oh well, we’ll wait ‘til we can afford to go, or even better, if I can work for somebody that can pay me to go.’ It sounded pretty good, so three years in Wellington and the fellow that I thought I might be in line to replace, they reappointed for another three years. [Chuckles] And I thought, ‘Ohhh … can I wait another three years? I’m twenty-five or six, and that’s a long time, three years.’ It isn’t now but it was then. [Chuckles] And I thought, ‘No, I … I’ll see if I can do something myself.’ So I started actively thinking about what I might do.

And with my experience in vacuum skin packing technology, I came across a little machine that was so big that was sort of a sum of money that I thought I could probably raise, and if I could get a corner of a meat plant … the Gear Meat Company it was. A colleague of mine was Senior manager there, the youngest ever in New Zealand at twenty-six, which was no mean feat when he was dealing with Roger Middlemass and other people, which he was at twenty-six … I might be able to get two other people with me and we’ll be able to get in boxes of lamb loins and we’ll be able to cut them into chops and put them in this, and send it off to the lamb company in North America. Seemed like a good idea at the time. Well I went to see The Lamb Company representative, a guy called Peter Wakelin – it was called Devco in those days – in Wellington, and he said, “Well, really you need to do the whole carcass.” So that the scale of three people and a box of chops had actually moved now to a whole carcass. I knew a whole carcass was quite a bit more involved, so now I’ve got to deal with all the cuts so it’s at least twelve people, I thought. So how do I do that with really, no money, and what we could afford to do?

I became aware that the Singapore Cold Stores who had operated a cold store at Tawa were thinking about moving to Hawke’s Bay, and I thought, ‘Ooh, well if I was going to get involved in the lamb industry there was [were] really only two places I thought; sensibly you’d be Southland, or you’d be in Hawke’s Bay.’ And really, ‘cause I came from Hawke’s Bay; I knew the weather in Southland; that was a really easy choice to make, so I thought, you know, it seemed to me Hawke’s Bay would be the place to go back to.

So I went to see the representative there, and he said they were coming up; so I asked him whether they would consider when they established their cold store if they’d just put an annexe on the side of it and we would help draw business to their cold store – which would be in the form of frozen carcasses – and just have a hole in the cold store to go through into this annexe; we’ll cut this frozen carcass into pieces and cuts and put it back in the box and put it back through another hole in the wall, and then you’ll [they’d] get the business of the carcasses and the cuts out and load the containers and ship them off overseas and do the documentation. So that was the base premise, and he said, “Hmmm, that sounds of interest”, he said, “we’d like a demonstration of the seriousness of your intent.”

So I thought about that and I went home and had a chat to Penny and said, “I’d really like to give it a go.” And she was very supportive, and I’m very fortunate in that respect. She said, “Okay.” So we put the house on the market and I tendered my resignation, and I went back to see Mr Coldstore guy and I said to him, “You’ve asked for an indication of the seriousness of my intent.” I said, “Well, I’ve sold the house and resigned my job – is that serious enough?” And he was quite taken aback; I remember at the time that he managed to say, “Yes.” [Chuckles] And so we moved back to Hastings.

My wife’s a registered nurse, and I’m now twenty-eightish, heading for twenty-nine, and out of work. That was on April 1st 1980, and I picked April 1st not just because it’s April Fool’s day – and that’s certainly what my colleagues at the Meat Board thought I was; I’d be disappearing into the provinces and into the long grass, never to be seen again, giving up a relatively secure job in Wellington and a pay rate that was commensurate with my market rate at the time. So we came back here, she went to work, I got some orchard work … some contract work in Taupo at a place called Elm Products for a little while, and I did some work for Athol Hutton at the Hawke’s Bay [Farmers’] Co-op[erative Association] here. Athol wanted me to come and work for him, but I’d just left a paid job and I really wasn’t, you know, in a mode to be working for anyone – I wanted to work for myself, so I said that wasn’t going to work. I tried to put the Hawke’s Bay Farmers’ Co-op together with the Singapore Coldstore people and that looked like it might have been getting some traction, but in December 1980 the Coldstore people said, “We’re now not coming to Hawke’s Bay.”

So now I’ve got two small children – one five, just started school, and one at kindergarten – out of work for eight months, and the prospect’s fallen over. So I had a bit of a think about that on Christmas Eve and through Christmas, and on 3rd January it would’ve been, I went and knocked on John Thompson’s door, of Thompson Coolstores down here at Stortford Lodge. I knew he was in the coldstore business, so I thought, ‘I’ll take my concept and try another coldstore operator and see if that might work.’ He listened to my proposition and he said, “Come with me.” So I jumped in his Ford and we went down to Manchester Street in Hastings, in the back there, and he showed me … “Here’s a coldstore that we built, and there’s room for another one in behind it; and on the other side there’s a development in Kelfield Place [coughing] that was done by Mr Raikes, and there’s a section of land there that might be suitable.” He said, “I’d like to introduce you to the committee of the syndicate.” So these are names to remember: John Thompson, John Mackersey [of] Mackersey Construction, and Ray Woodham of Coopers [&] Lybrand; they were the head of the syndicate. And at that time – we’re now early 1981 – syndicates were quite common of people of our age group [with] a little bit of money to invest; they formed syndicates of twenty-five and had some income for their retirement or getting ready for retirement, or were in the course of their retirement. So I made the presentation to John Mackersey and Ray Woodham, and they said, “Hmmm, that sounds all right; now we’d like you to address all of the syndicate.” So over here in Hastings [at] the Coopers & Lybrand offices they opened up the boardroom, and they wheeled me in with the twenty-five people sitting round the table. And so I told them my story in terms of my background and what I’d like to do, and the long and the short of it was that they decided to give me a go.

So I designed the process layout, which was really simple, and John Mackersey with draughtsmen did the building that went round it. And then they costed it up and worked out what the rental would be – twelve and a half percent yield in those days, 1981, so this is just before the high inflation rates really hit. But I was high risk, so they said, “Well, it’s too much, so we’re going to have some things out.” So one of the first lessons I learnt from John Mackersey was when he said, “The skylight, do you really need that?” And I said, “No, but how much is it?” He said, “That’s not the question”, he said, “what’s important here is the sum of the parts. It doesn’t matter if you save $10 here and $15 there, you’ve got to add them all up. It’s a bit like taking weight out of a racing car, you don’t say, “Oh, it only weighs two pounds, I won’t bother with it”; you take every set of two pounds – in the end it adds up.” And so that’s what we did, we knocked it back; the end result was that we got $200,000 to build the add-on, and twelve and a half percent of that is my $25,000.

Now to put that into perspective, I was signing up for a lease for $25,000 a year and my market rate pre-tax salary was [$]14[000]. So I knew that if it didn’t work I couldn’t earn enough even before tax to actually pay the lease, so there was no way that it could not work – I had to make it work. And I was helped a bit by the Development Finance Corporation at the time – they had effectively a slush fund. They put $9,000 of capital in, so not large sums of money, and we got going for between $40-50,000 – and only because I didn’t own the land, I didn’t own the building and I didn’t own the product. I had enough money to get a bit of stainless steel made by the local stainless steel people here for the tables, and [to] buy a band saw and a shrink tunnel [which] was the most expensive piece of kit. I remember at the time it was probably about $10,000 to shrink the plastic and go through.

So October 25th 1981 we opened up the lamb cutting room, and I started off with a small farmer co-operative called Eastlands I think it was; they were based out of Pahiatua … Mr James was the head. They went for a while; unfortunately they didn’t survive, and disappeared. Then another national investment company came in and [I] did some work for them, and then they decided they’d invest in Southland Frozen Meat in the South Island; then they disappeared. We did some work for a local sort of entrepreneurial fellow, Richard Herbert, who was here and then went across to Napier. He subsequently was involved in building Meihana Place which was beef, and then later did horses. But he was doing French racks [of lamb] for Canada and suchlike, and then the Meat Board took ownership in ‘bout ’84 and he was cut out; so I lost him as well.

Then the Meat Board worked for about two years, so this is at a time when there used to be a North Island schedule; so there used to be effectively a collusion. And it was a permitted collusion of all of the meat companies in the North Island and the South Island who would set the price they’d pay to farmers for each week. And that actually turned out to be quite a benefit for us ‘cause we dealt with the third party independents, and they were a bit leaner and a bit more efficient so they figured that they could operate under the North Island schedule and have a margin that the others didn’t have. We worked there with the Meat Board for a year and a half, or two, ‘cause the meat companies had come [?] to the Meat Board and the government and said, “The returns we’re getting from the overseas markets are so poor that there is no net left after costs, so we’d actually be charging farmers for their product to come in.” And he was talking about running the ewes off the cliffs etcetera at that time. So the Meat Board said, “We can’t have that, we’ll have to underpin it, and we’ll effectively take over it all.” And they dipped into what was called the Meat Industry Reserves. So the Meat Industry Reserves were from the Second World War when we supplied Mother England with a lot of mutton and … well probably not a lot of lamb … hogget. And there was $400 million in the kitty, and they burnt $265 million of it in that period of time, so it’d be a matter of opinion as to whether that was a good use of the money or not. I think at the time it was very roundly criticised – in my view in retrospect, I think it was actually the right thing to do in terms of the support of the industry and at that particular point. So the Meat Board was in, and then they were leaving.

Then we had a bit of work tidying up – there was lots of odds and bits and pieces. And that was really … you know, fortuitous for me [coughing] when two – call them bits of luck – Tomoana had a fire in the early eighties which took their lamb cut room out so that gave us work doing work for Weddell Crown, or the Vestey Group. They would give me all the stuff they didn’t want to do, so that was the big, heavy, fat carcasses that were really hard on your wrists and hands, but that was consistent work. And then with the Meat Board – and I’d just worked for the Meat Board so I knew all the people there – and we would start at seven in the morning and we’d cut the first carcass, and we’d stop at five to five in the afternoon. And we’d do that five days a week, work Saturday morning from six ‘til ten [am], clean up and do maintenance ‘til twelve, one [pm], go home and sleep in the afternoon and Sunday come back and check the refrigeration; then Monday start the same thing. So I had about eighteen months of that. And that utilisation of facility of any sort of service, you know, was hugely beneficial in getting that continuity.

And that provided me with the financial resource then to contemplate the next step which we didn’t anticipate at the time; but when the Meat Board withdrew and then the people we were doing work with – the larger companies – decided they don’t need all these little guys any more, and they decided to cut them off. So I was doing work for the Mathiases and the Hartnells of this world and they would buy parcels of product from the big meat companies and they would do better; they would go into the smaller markets in the French West Indies and up in the Pacific Islands and around in there, and they’d have a business of it but when their supply was drying up then they no longer had the business. So I could see – and now we’re talking Christmas 1986, I’d been going for 5 years.

And I’ll just step back a little bit because I have missed a step out. So we started in October 1981, and at that time the farm deer industry was just beginning. The very first deer slaughterhouse was built in Christmas 1981, and the local deer farmers here … John Spiers and David [?] were two … and they commissioned a local economist, John King, to do a study about building a deer slaughterhouse here in Hastings or in this area, to service the industry. So it didn’t take me long to work out – I had a look – they were projecting to only do five hundred head in a year, and if you’re only doing five hundred you just can’t afford any form of fixed cost ‘cause whatever it is, if you divide it by five hundred, it’s still a large number in working through. [Coughing] So I suggested to them, “Why don’t you come and buy the section next door to where I am in Kelfield Place, and we’ll staff it and manage it. We’ve got cold storage; you just need to build a little slaughterhouse and a boning room, and we’ve got manned facilities to look after it so you don’t have to spend to much money and you’ve got a chance of actually not losing money for a great period of time, and staying in business.” And they agreed to the concept and that’s what we did.

So we started work on behalf of what’s called East Coast Venison in February 1982, so this was only four months after I’d started. I started on Day 1, three days out, with one employee, and then when we started processing I went to six. Within a month we were twelve, then fifteen, and by the time I got to February [the] next year we were thirty-five, so that was from October to March. So we’ve now got thirty-five people.

My wife was doing the Kalamazoo books for the wages, and our third daughter was born about this time. And rather ungraciously she reminds me that I took the Kalamazoo book up to her in the hospital [chuckles] – ‘cause you could stay in hospital a week after a baby – to do the payroll for that week while I was going to visit her. We very quickly outgrew the Kalamazoo system.

So that brings me now to December ’86, and I thought the signs were on the wall; we were going to run out. I had two choices now, to get out and maybe just concentrate on venison, or get involved in relationships with farmers. And I picked the relationship[s] with farmers because I’d had all of this experience with these intermediaries coming and going and I thought, you know, a bundle with a few sticks in it or a bundle with a lot of sticks. And I figured a bundle with a lot of sticks, so we have a relationship with a whole lot of farmers – yes, we’ll lose some and some will come and go – but each incremental one’s not going cause me to lose my shirt on my back each time it goes through.

So that’s what we decided to do, and so I took a quick skim around like you do; and I’d had the experience of building the deer plant at this point. It was nicknamed ‘The Doll’s House’ because it was really tiny – the yards were only six metres by six metres, so thirty-six square metres; that’s only four hundred square feet; and the slaughter floor was nine by three, so it’s only twenty-seven square metres; the boning room was nine by five, so it’s only forty-five square metres. So it was like a doll’s house – it’s a little bit bigger now, we’ve added bits on over time, but we made it work then with hot boning to begin with.

I said to my staff in the beginning of 1987 that we’re going to run out of work, but we’re going to build a slaughterhouse and we’re going to be back in business later in the year. [Cough] “If you can find other work to go to, please do – we’ll hold your tenure of service open for when you come back.” And nearly all of the staff did find alternative work ‘cause we ramped down, and three weeks before we were due to open the slaughterhouse I ran out completely. I had no work at all for three weeks, and again in October – it’s an easy thing to remember, October 1987. Late October we pressed the button and we started slaughtering lamb in 1987. It was designed to be one, one and a half a minute, so to put that into perspective, this is the equivalent of about a sixth of a chain … no, not quite sorry, a fifth; because seven and a half, eight a minute at Whakatu, times six chains. And Tomoana was the same, seven and a half, eight a minute times six. And I was one and a half a minute, so a lot smaller on a quarter acre section. But we managed to speed it up a little, so we started off we did four hundred a day, then five hundred then six hundred then seven hundred.

Shortly after I had one of the two strikes that I’ve had in my history, and I’m not particularly proud of the fact we had strikes. But the first one was around the provision for shift work. Shift work was worked in follow-on departments in the meat industry at the time, so rendering, where they do the tallow and the meals – that would be shift work; and fellmongery’s where they take the wool off the skins and pickle the pelts – that was done on shift work, but slaughter boards and boning rooms, no. I started in compulsory unionism, so there was compulsory unionism right through my first part. But I had gone to see Graeme Lowe and John Foster – they weren’t actually together at that time – to see if I could join the Dawn Meat Company employment agreement which was operating in Dawn Meat down on Omahu Road, and they agreed that I could do that. So that put me under the Food Processors’ Union rather than under the New Zealand Meat Workers’ Union, and that lasted until we got involved in slaughter. And that was quite an advantage because at that time the unions were particularly strong and militant; there was almost an abdication of managerial responsibility, and in effect management of the companies was very much dictated by the wills of the union secretaries, and they would escalate issues between facilities across the company. So the fact I wasn’t in the Meat Workers’ … well, we had our own issues but we didn’t have everybody else’s, but if I was in the Meat Workers’ when they’d call a strike for something that happened in Longburn, you would be affected here, and vice versa. So it was a debilitating time in the industry to guide through those eighties, coupled with the high inflation that was there at that particular point in time.

So five weeks of strike, and I remember it really clearly; when the staff went out they were all happy and laughing and joking, and it took three weeks for the smiles to go. And it took another week to get round to the psychology of ‘we really need to settle this’, and then we did the deal in the fifth week. I thought my proposition was reasonable; they thought not; they wanted an incentive bonus scheme. I said, “Yes, that’s okay, I’m okay with an incentive bonus scheme but I want the provision for shift work.” And they said, “No, you can’t do that – that’s blackmail.” And I just said, “Well no, it’s just barter”, but they said, “No, it’s blackmail”, and they said, “well we’ll teach you a lesson”, and went on strike. So by the end of the fifth week they came round to considering it to be barter, and the solution was that they got what they wanted then, and I got a pledge from them to have what I wanted in a year’s time, which was fine by me ‘cause I just wanted provision for shift work – I wasn’t ready to work shift work but I knew I wanted to in the future. And true to their word, twelve months to the date they signed for shift work provision, so we were the first company in New Zealand to get shift work provisions for slaughter and boning operations. We weren’t the first to implement it because in the course of that year from signing the agreement Fortex actually introduced the shift work in Ashburton in the South Island, so they were the first to introduce shift work, we were the first to get provision.

So we started October ’87 in slaughter, and in October ’88 we put on our first shift in slaughter and followed about that same time with a boning shift. That led me to fully understand that no longer could I understand or comprehend what was going on all the time in the plant because two shifts of coverage … I could cover, you know, one shift for the ten hours a day, you know, before and after; but when the first people were coming in at six [am] and the last people are going home at two in the morning, that was more than I thought I would be able to sustain, so I looked to adopt some form of philosophy, and I chose Total Quality Management as a means of doing that. And so we started a process of education of our staff, which I’d have to say were done with varying degrees of ability and success over time, because it’s an ongoing situation that requires reinforcement all the time; you just can’t do it once and then forget about it and expect it to be effective. So we had a … I’d call it a period of consolidation then in 1988.

East Coast Venison had expanded in 1987 to Feilding, and I was party to the design of that facility and the building of the venison plant – it’s now called Venison Packers Feilding, but at that time it changed it’s name to Venison New Zealand. And unfortunately, in 1992 Venison New Zealand went into receivership, so I purchased the Hastings facility from the Receiver and in conjunction with my now partner for many years, John Signal, at fifty percent each, we purchased the Venison assets in Feilding, which continue[s] to operate on that basis to this day. Still consolidating then, we were supplying carcasses to Advanced Foods in Waipukurau; so they’d built a plant down there in the late eighties, and they were receiving fresh carcasses from a number of different plants. And they were concerned about their future, and asked if we could supply some carcasses, which we did from about 1990. By about 1994 they said, “We’re a bit concerned about our security for carcasses.” They’d been supported … at that time the Auckland Farmers’ Freezing Company was in [under] a bit of financial pressure, and Bernard Matthews, who were the owners then of Advanced Foods, were very good payers; so the Auckland company was quite keen to sell carcasses to the people in Waipukurau because they would be paid on the day or the next day, which helped them for their cash flow. But they were wondering how long that arrangement would last – this is from the Waipuk [Waipukurau] perspective – and they said, “Well, can you contemplate supplying us more carcasses?” So I had a chat to my partner in Feilding, and we thought the section alongside the venison plant was available, so he said, “Well why don’t we buy that and we’ll build a slaughter facility there?” Which we did, and commissioned that in 1995 to supply carcasses coming through from Feilding to Waipukurau.

Bernard Matthews said they were really happy with what was happening there and could you [we] do any more, so I had a look to see where there might’ve been another hole in the island and we selected Gisborne. And in 1998 I built another land store facility in Gisborne, so now these chains are running three and a half, four minutes, so they were effectively half chains in the conventional sense. But they were operating two shifts, so they were actually fully the equivalent of one chain. And remembering the population now from 1985, the numbers of lamb are continuing to decline, so this growth was occurring in a declining industry. So I’ll just put that into perspective … 1985, thirty-nine million lambs killed in New Zealand; it dropped to thirty million. Today [it’s] at twenty-five [million]; this year, just under nineteen million.

However the average weight of a lamb in 1985 was not much off fourteen kilos … thirteen to fourteen kilos. This year will be the highest ever in history, it’s over nineteen kilos … well over nineteen. So the total tonnage of lamb produced hasn’t changed a lot, but numerically the numbers have, and our chains work on numbers, and our pay rates work on numbers, so actually the cost per kilo of processing has dropped significantly and that’s been one of the contributions reflecting in the much improved increase in price per kilo to lamb farmers.

So back to Gisborne – 1998 we built there, and then I realised that the facility that I’d built in Hastings in 1987 was no longer competitive; ideas had moved on, and [with] what we’d implemented and learnt from Feilding and now from Gisborne I figured I really needed to rebuild Hastings ‘cause it wasn’t going to be competitive with the new age of plant. So we revamped the Hastings facility; I built a new slaughter board there in 2000. Now to put it into perspective a little, these plants are relatively small in comparison to the traditional model. So the concept that allowed us to grow in our sector was around smaller footprint, extended hours of work. So for example, when a traditional industry norm was to hold one and a half days’ kill, our yards hold about a fifth of the day’s kill at our level of throughput. And so it was introducing them to [what] we call ‘Just in Time Processing’; so it wasn’t like, deliver them today or deliver them this afternoon or tonight – it’s deliver them between nine and ten [am], so it’s by appointment. So that puts a lot more demand on the organisation and on the people, and so the staff … if you’ve had that flexibility before, and trucking companies etcetera really like that flexibility so they’re loathe to change … and this meant that our competitive advantage endured for a long time because other parties were not really wanting to change because it made their job harder to do. And of course they had the space anyway, and even if they stopped doing it they would’ve still had the space – it wasn’t going to go away, it was there, so it wasn’t really a strong imperative for them to change.

So after rebuilding there, and in the early parts of 2000 in dealing with Bernard Matthews [cough] … I’d built a boning room there in 2004 in Gisborne … I came to realise that I really was outliving my usefulness as a partner working with them. Because I was new to the industry and I was therefore beneficial in getting access to new entrant quota, which was really important to get product into the EU, [European Union] and particularly as they were stationed in the UK [United Kingdom] I could see in the machinations of middle management that was occurring there that they were feeling that they could do the job better than I could; and so there was little bits of niggle going on and I figured that it’s probably better that I get out. I removed myself early so that it could be with some decorum [cough] and doesn’t all end up in tears. And so I went to them and said were they interested in purchasing my half share, cause we had sold half of Feilding, and we did the Gisborne one as a joint venture with Bernard Matthews so they were fifty-fifty in both cases … they were equal, each party had the power of veto. So I went through a, you know, a reasonable negotiation and we agreed a price, and I sold in February 2005, my half share to them. And I thought that I was leaving the industry.

And just coming back to Hastings in that now I’d probably reached my level that I was going to find an involvement, and tail off. Well two years later, or not quite two years later, I was having a beer with the then CEO [Chief Executive Officer] Willem Sandberg, who was now running the facility in Waipukurau. And Bernard Matthews had come on [into] a bit of bad luck and a bit of bad times; their primary business was in turkey, but three things happened to coincide, which really hurt them; one is that one of the Animal Rights organisations got inside one of their turkey houses and filmed two workers playing baseball with dead turkeys. So that went all over the news.

And then Jamie Oliver lambasted their chicken [turkey] twizzlers, which was a school lunch programme which is actually called the ‘accountants’ formula’ because the school lunch programme said, “You’ve got to make this for 9p”. [NZD 0.19 cents ] And the only way you could make it for 9p [is] if it’s packed, because basically there’s a lot of water in it. It was awful – I mean Jamie Oliver was right, it was packed; but the criteria … ‘cause I’ve been in test kitchens there, and they made a whole range of products from packed to really quite superb Chicken Kievs and suchlike … and it was [in] accordance with, you know, the costs and what the customer was prepared to pay. So they got lambasted by Jamie Oliver.

And then there was the bird flu … it came down to a plant in Hungary which Bernard Matthews had, and they brought birds into the UK and it brought the bird flu into the UK, and that hit the press. And these all happened in the one week. In one week their sales went from a hundred units to forty the next week.

Now just to understand what that means, in the nature of their business they’re vertically integrated; so they take ownership of the bird from one day old as poults, so they’ve got something like forty-five days of inventory in the pipeline coming out. And it’s coming out at the rate of a hundred percent of sales and you’re [they’re] selling forty. So just imagine how quickly … if it’s coming out at the same speed and you only take a look … how quickly the mountain grows and how quickly the capital gets tied up. So they got in deep financial strife and they decided that lamb was no longer core business for them. So the Bernard Matthews’ business came up for sale, and I thought, ‘I don’t really want to know. I’ve just, you know, not quite two years ago sold out to them and they’re probably going to be asking a lot more than I sold to them for, and I’d really rather not know what the price was.’

But I happened to have a beer with the CEO, Willem Sandberg, in the Loading Ramp out here in Havelock North, and he said that they’d been trying to sell, or to interest some private venture capitalists from Australia to go in for the staff to do a buy-out. And they’d advertised it around the world for big companies, and they’d gone to the local meat companies. The venture capitalists – they were not really understanding the industry, wanted to leverage too much and you can’t have a lot of leverage in our business; there’s too much risk associated with the weather aspects of it, so you have a lot of debt. It wasn’t working, so I asked him, “What sort of ballpark are you looking at?” And he shared with me the figure. And I thought about that and then I went home and I thought about it some more, and I thought, ‘Actually, that figure’s quite reasonable.’ And I knew the plants … ‘cause I built them … better than anyone, and if the Waipuk plant came with it, plus there was the marketing business …

So Sunday night I rang Willem up and I said, “I think we should have a go”; and this was late November, and we were a really late entry into the race. So together we formulated and we put an offer in with no conditions. And I said “Well Willem, you work in the business, you’re the CEO – I’ll rely on you for the due diligence.” So I didn’t have to spend any time doing the due diligence and Willem came in for a small amount and we put fifteen percent aside for the staff; and the long and short of it was there was only one other New Zealand company in contention and they had a number of conditions, and so they elected to sell it to us. So two years ago I thought I was getting out in 2005, and in 2007, February, almost to the day … I actually signed Christmas Eve 2006. I’ve done a couple of deals on Christmas Eve; it’s actually a wonderful deadline date ‘cause everybody wants to go home and they’re all [chuckles] actually motivated to get things done on the day. So Christmas Eve was settlement date, and the actual transaction date was February 2007.

So from there, that now meant as well as the Hastings plant, I’m back involved in Feilding, more so in Gisborne, and in Waipukurau. And we had at that time already established a fellmongery at Whakatu called Progressive Venison Limited – that was 2005. And then I established an office for a company we’ve renamed Ovation in Bristol; and in 2010 I took a fifty percent shareholding in a Welsh abattoir in a place called Cross Hands which is near Carmarthen, or it’s in Carmarthenshire, and subsequently took a hundred percent of that a little bit later. We’ve invested in Classic Sheepskins in Napier about three years ago, and a bit over eighteen months ago we took a fifty-one percent stake in Taylor Preston in Wellington. So our involvement is extensive … here’s me thinking that I was getting out, and we’ve actually got in deeper in going through.

I asked my wife if she’d like to come along tonight and she might learn something. [Laughter] She said she’s busy; we’ve just decided to renew our carpet after thirty years and I didn’t like any of the colours – [of] course it had to be wool. I didn’t like the colour range – ‘cause it’s hard to buy wool carpet these days for any of you who may have tried, and the salesmen will steer you, as you know, to the synthetics. And so the reduction in demand meant the colour palettes are quite reduced, and the styles, and I couldn’t find a colour we liked so we decided we’d get our own made. So [having] an involvement in farming and purchased Anawai Farm up the top of Maraetotara in 1996, and subsequently added some properties around there in that time. And so we’ve got Polled Dorset sheep which have a higher bulk factor than the average and so we shore the sheep and got the wool and we sent the wool to Timaru to be scoured, then it came back to Christchurch to be spun and dyed to the colour of our choice. And it turned out, using the Resene paint chart, we looked through all the colours and decided that [chuckles] we didn’t actually like any colour better than the one we already had; [chuckles] so we elected to choose the same colour. And we sent the wool to Australia, Prestige Carpets, and they made it into carpet; and it arrived back a couple of months ago and it’s being laid yesterday and today and tomorrow. So I think when I work all of that out and go through it all it won’t end up to be any less expensive than if I’d gone to buy it if I could’ve got what I wanted; except I got what I wanted, but I’ll have a much deeper pile than I otherwise would’ve had for the same money.

So in that, you know, just an acknowledgement to my wife. We didn’t have a family holiday for seven years after we started; so she raised our three girls – I wasn’t home and I missed most of it; I’m trying to catch up a bit with grandchildren … I’m not doing that good a job of that either really. But that support, in that she was undemanding, allowed me to focus on what I was doing, and if she hadn’t been supportive, if she was as demanding of me as my daughters are of their husbands [laughter] I would never’ve been able to do what I did. So I do have sympathy for my sons-in-law. And so three girls, all grown, families, eight grandchildren – the eldest is eleven and the youngest is two going on twenty-two, as they say, as they all are; nicknamed Squawk, for good reason, but very happy with the way they’ve turned out. I think Penny did a great job. That’s my story.

[Applause]

Joyce:  Questions please? What a fantastic story … [Chuckles] No questions?

Craig:  One of things about telling your own story is that it’s very difficult for anyone to contradict you. [Laughter]

Question: In your story you talked about your progress. You haven’t actually mentioned in real terms the closure of two big freezing works in Hawke’s Bay, and how that affected your story and growth of the company.

Craig: Yes. So in terms of timings they were both operating when I started, and I did go and see Ian Cameron who was the fellow who had engaged me – he was secretary at the time, became general manager of Hawke’s Bay [Farmers’] Meat Company – to suggest to him that if, you know, they ever had any work they couldn’t cope with themselves that maybe I could do something for them, which was a little bit forward of me in retrospect; he told me quite politely that he thought they’d be able to cater quite well. [Chuckles] And I did go and see Graeme Lowe as well, and he wished me well; but he also said, “But I wish you’d go and do this somewhere else.” [Chuckles] I went to Tomoana to let them know what I was doing, and they had their fire that took their boning room out for lamb, so I had work from them which was you know, part of the [?].

So Whakatu went a year after … I started in ’81, and I started slaughtering in ’87 so they were still open; they went in 1988. So I had been in business for seven years by that time, and their closure was part of a sort of a syndicated view of the various owners as to which plant would close amongst that group, and Whakatu lost out on that. But the common thought at the time, myself included, was they would be one of the last plants to close … seemed to be relatively well-run and high throughputs, but in the way the boardroom machinations went and the ownerships and the shareholding, Whakatu lost out.

Then Weddell got caught really, with the antics of the parent company in the UK – they would no longer support … effectively pulled the rug out from underneath them, and they closed in 1994. So we’d been going for a little while, remembering the sheep population was also dramatically reducing. When I look at these Heretaunga Plains – and this won’t be any news to any of you – I live in Raymond Road in Haumoana, and I’ve got three trans[?] flown by aerial photography … ’47, ’67 and ’93. In 1947 it was all pasture land, sheep and beef; in 1967 all pasture land, sheep and beef; in 1993 it’s all orchard. And I just think about here – those foxgloves that used to grow out Roy’s Hill way, and Ngatarawa Wines, and the drag strip and the rifle range … great grape country. I mean it wasn’t much good for growing lambs except in the winter, you know, ‘cause it was too dry in the summertime. But these Heretaunga Plains, the confluence of three rivers in floods over aeons, so there’s good soil, and it’s obvious use for me is horticulture, viticulture and then the stony stuff, the old river beds, grapes; and the sheep and the lambs have gone back through. So all this finishing country here that supported the two big plants is gone, it’s not being used for that any more. So that’s why … I mean we survived ‘cause we were small enough to work on the base rate and our break-even points were just infinitesimal in comparison to the larger companies. Those plants were built for another time, in 1920; Whakatu was ‘21 or so, and Nelson Brothers was earlier than that, I think the late eighteen hundreds from memory. And in the concept [context] of the time they were right in their time, but they weren’t right in the 1980s. And so yes, you could say we got the benefit; but we’re really still tiny.

I’ll put that into perspective – now we manage to do in a year between six and seven hundred thousand lambs a year at this plant in Hastings, Kelfield Place. Whakatu and Tomoana did closer to four million between the two of them, and fifteen hundred beef, a day, so probably the better part of a hundred thousand cattle each. Pacific wasn’t there then; Pacific got built, so they would’ve taken, you know, some of that cattle. That’s a sign of the movement, so the epicentre for livestock has moved south.

I came over from Gisborne … came over the ranges here … you drop down towards Whakatane, you drive an awful long way before you see a sheep; you’ve got to get to the Kaimai Ranges before you might see one at the top there, and that’s fifteen years ago by now. You’re seeing avocados, and probably seeing a few less dairy cows there and a bit more horticulture and lots of kiwifruit etcetera. Changing land use is what it is, and I don’t have any problem with that. In my view the land should go to where it’s going to deliver the highest economic turnover … you know, living for people to make. But our challenge in our industry is to try and remain competitive at the margins and I’d have to say we’ve been losing on that in all the time that I’ve been involved, and been going backwards in terms of the number of hectares that are involved in sheep and beef pastoral farming in the country. But the farmers have all got substantially better and their productivities have improved hugely in what they’re producing; the ones that remain are just about making up for all the land that’s gone.

Cynthia Bowers: Craig, I want to thank you sincerely for when I spoke to you a few months back for agreeing to come and talk to us. I’m glad you weren’t aware quite how many people who [there] were here, but thank you so much. I’ve always known that you had an interesting story; I didn’t realise quite how interesting and how inspirational it actually is, so thank you for sharing it with us. And probably some key messages that I’ve taken out of it is [are] firstly your bravery … absolute bravery [and] commitment. And I have a vision of Penny sitting there in the maternity home doing the wages for you [chuckles] and I think probably we’ll all talk about that for a while to come. So you know, thank you for what you do for Hastings and for Hawke’s Bay, but for sharing that story with us tonight … absolutely inspirational.

If I might close with one … you just remind me, Cynthia, that … and I have come to believe this now … that ignorance is bliss, [laughter] because it was ignorance at the time that allowed me to take the risks, and had I known what I do I wouldn’t have started. It is a journey, and it’s really quite easy to take a step at a time if that’s the way you look at it; but if you’re actually looking at it ‘I’ve got to climb Mt Everest’, for example, I think, ‘Well no, that’s oxygen country, and daunting; and you need to be Edmund Hillary, and you’ve got to be twenty-eight or nine or something like that; have the right combination of stamina to do it.’ And you wouldn’t start, but when it’s one step at a time you can get there. I didn’t anticipate that I would be where I am, I didn’t anticipate what it might look like, I just actually went with, ‘I’ll give this a go, I’d like to try this.’ And if you do a good job about something, opportunities start to come your way, or you add on to them, you know. But ignorance is bliss.

Joyce:  I’d just like to say, Craig, what a wonderful talk that will make for the Hawke’s Bay Knowledge Bank. That was recorded tonight; there’s over five hundred family stories now in the Knowledge Bank; if you go online you’ll see the website that goes into the histories. A huge thank you to the late Frank Cooper, and also to Jim Newbigin who’s been doing a lot of this recording – it’s credit to them because this is voluntary work as well, and I just think your talk tonight, Craig, will go up there as one of the top. Thank you.