Kono's million-dollar branding

Nelson's Wakatu Incorporation has spent $1.5 million on raising the profile for its new Kono NZ LP subsidiary, to chase food and beverages export dollars.

The Kono business brings Tohu Wine, Ngatahi Horticulture and Aotearoa Seafood into a single-entity subsidiary with annual revenues of $60m.

"In seafood we're very profitable, in wine we're very profitable and in horticulture we're reinvesting ... so two up and one waiting in the wings," said Wakatu chief executive Keith Palmer.

The Kono brand had been around for a number of years on a smaller scale, but was now being widened for the consolidated export business. "It has been an extensive exercise, but we feel that is the basis of our marketing of food for the next 20 years."

Palmer said branded produce would do well in Asia, with outlets including supermarket chains in China

The Maori word kono means food basket and traditionally a kono was used to showcase produce. "Working together as a consolidated business enables us to switch to multi-product marketing rather than single-product selling. This will increase our overall sales and enable us to become a premium food supplier," Palmer said.

"The whole concept of bringing them into one company, is where we're selling people seafood we can get the same customers to buy wine and buy horticulture."

Wakatu Incorporation chairman Paul Morgan said the division exported seafood, wine and food to 25 countries, with the sustainable products synonymous with the top of the South Island – an area known as Te Tau Ihu.

The company's owners are descendants of the original Nelson, Motueka and Golden Bay landowners at the time of European settlement in 1841, who took land ownership through the tenths system. The iwi of the original owners and their descendants are Ngati Koata, Ngati Rarua, Ngati Tama and Te Atiawa.

There were now more than 3000 private descendent owners holding more than 10 million shares in Wakatu Incorporation, Palmer said.

When the Wakatu Incorporation was formed by a Commission of Inquiry in 1977 it had 1350 hectares of land valued at $11 million.

The incorporation had retained the land base – based around horticultural land in Motueka – but its total gross assets had increased to more than $250m.

Land and property-based assets make up 70 per cent of Wakatu's business, with urban-based properties that include the Wakatu House office block and other sites leased to Harvey Norman and Progressive supermarket.

Wakatu also had four subdivisions – with more than 200 titles – in the Richmond-Nelson and Motueka areas. Palmer said the group tended to buy land to develop such subdivisions, before selling down the titles to individual owners.

The newly branded Kono food and beverage business makes up the remaining 30 per cent of assets.

Kono Seafood, formerly known as Aotearoa Seafoods, sold more than 10,000 green-weight tonnes of raw mussels a year to the United States and Asia, Palmer said. It also sold more than 70 tonne of crayfish into China a year.

Wakatu began investing in aquaculture in 1998 and Kono Seafoods is now the largest of Kono's business units, with more than 200 employees generating annual sales of more than $35m.

Kono Beverages, formerly known as Tohu Wines, is based at Nelson, Waihopai Valley and with a flagship 72-hectare vineyard in the Awatere Valley. It produces around 120,000 cases of wine each year from its three vineyards worth around $15m.

"Our season runs through from the 1st of August through to July, so we're only four months in and we're out looking for more [contracted] juice already," Palmer said.

Kono Horticulture, formerly known as Ngatahi Horticulture, has 1000 hectares of Motueka-based land with much of that leased out to other horticulturalists. The land tended to be planted in apples – making up two-thirds of the area – along with pears, hops and kiwifruit.

The profitability of the business in Motueka was "absolutely vital to us" as it affected the group's land values. With some in the apple industry struggling, there was some restructuring of operations.

"In the horticultural area we're looking how to reorganise our place in the industry, and [asking] can we influence the whole industry and make it profitable. Because of our land holdings we need a profitable horticulture industry in Motueka, so a lot of work's going into that – how do we restructure the distribution and setup.

"At the moment we're just talking to people and saying what do we need to do to make this industry profitable in the longrun. That's the big challenge at the moment."

Wakatu recently bought out Ngati Rarua Atiawa Iwi Trust from the Ngatahi joint partnership, which was formed in 2005 and has grown into a business with a $6 million annual turnover.

Palmer said the partners in seafood-based venture SPATnz (seeking to domesticate the greenshell mussel by selective breeding techniques to reduce disease and add size) were still working through the final structure of that company.

SPATnz is a collaboration by Sanford (50 per cent), Sealord Group (25 per cent) and Wakatu Incorporation (25 per cent). It also has Government funding with a primary growth partnership application. The partnership is set to run for a decade, with the two sides putting in around $56m, Palmer said.