From Hobart to Honshu!
Apr 02, 2009
From Tasmanian apple grower to international business entrepreneur, Tim Reid started production of Japanese cherries in 2002, to become the first producer in the world to export back non-fumigated Satonishiki cherries to the Japanese market in 2008.
A sixth generation orchardist, Tim Reid, general manager of Reid Fruits has made the transition from the family tradition of apple grower, to cherry producer to enjoy unprecedented market access into Japan. Reid Fruits, a family owned business with over 150 years history has traditionally grown apples in the Huon Valley just south of Hobart. Tim Reid has had a long relationship with Japan, visiting the country 35 to 40 times throughout his business career. Often citing Japan as his second home. Mr. Reid, to this day, enjoys a strong relationship with Japanese local farmers and supermarket retailers.
History with Horticulture
Ever since the 1990’s the apple export market had been declining as overseas markets became increasingly more competitive, reducing the price and demand for Tasmanian apples. Since then China became an increasingly strong presence on the international market where refrigeration technologies in China improved greatly towards international standards. Through adequate refrigeration techniques, apples can keep all year round, depriving Tasmanian apple growers of the opportunity of providing apples to international markets in the Northern Hemisphere during their off-season. With apple picking being very labor intensive by nature, and the increase of production costs on top of shipping, exporting Tasmanian apples to overseas markets became less viable. China thus began dominating apples exports, producing over 40% of the world’s apples. This led Tim Reid to explore new opportunities.
Business Venture – A New Direction for Reid Fruits
During one of Tim’s trips to Japan, it was on the advice and encouragement of supermarket retailers that Tim decided to make the transition from apples to cherries. Through the introduction and recommendation of Japanese supermarket retailers, Tim travelled to Yamagata Prefecture, home of Japanese cherry production to meet cheery farmers, a relationship which Tim continues to enjoy to this day. To accommodate for cherry production, Tim began to move his business out of the Huon Valley an area considered too wet for cherries, and bought up land in more ideal conditions in the Derwent Valley 50km north-west of Hobart. Purchasing land in the Derwent Valley involved a restructuring of his company, selling 40% of his company to private investors, and keeping 60% ownership between himself and his wife. Tim also found investors in Japan which confirmed to him as well as other private investors that his new business venture had strong interest and business potential in Japan.
Initiating a Business Plan
In 1999, with his business idea planned and the restructuring of his company completed, Tim Reid set out again to Yamagata Prefecture, Japan accompanied by his associates. With an approved import permit from Australian Quarantine in hand, Tim set out looking for commercially viable cherries for production in Tasmania which could be exported back to Japan during their off-season. His associates chose two species which they recommended as having significant commercial value. Both were of white flesh varieties, the first Satonishiki, the second was Benishuho. With well wishes and as a gift from Yamagata farmers, Tim received 2 branches, one of each cherry species, which he brought back to Australia, carefully wrapped in wet newspaper and carried as hand luggage on the plane home. Once arriving in Australia, Tim immediately surrendered the branches to Australian Quarantine, who had been advised earlier by Tim about the import of the branches. The Cheery branches initially remained in a Melbourne based quarantine facility but were given low-risk status in their second year. Tim was thus able to bring his cherry branches to a quarantine facility in Tasmania, where they could be reproduced and quantified.
Exports Finally Begin for Satonishiki
In 2002, after 3 years under the control of Australian Quarantine, both the Satonishiki and Benishuho variety of cherry trees were ready for release and planting at Reid Fruits Orchards in the Derwent Valley, Tasmania began. With assistance from both Australian and Japanese government authorities, including Austrade and the Tasmanian State Government, Reid Fruits finally gained market access to Japan for Satonishiki cherries in March 2005. The first cheery exports were ready after harvest in December that year. These cherries however, were subject to a pre-export fumigation process which greatly reduced the quality of the cherry before reaching the Japanese market, a country renowned for having a sophisticated and quality conscious consumer market. The mandatory fumigation process was largely due to pest issues of ‘Cotling Moth’ which typically affects apples.
Due to intellectual property rights over Benishuho, Tim Reid cannot export Benishuho cherries until 2012.
Breakthrough for Cherry Exports
In time for the Tasmanian 2008 – 2009 harvesting year, an understanding was reached, between both Australian and Japanese governments, the Japanese Ministry of Agriculture Forestry and Fisheries, and the Tasmanian State Government to, for the first time, gain market access of non-fumigated cherry exports to Japan. Through careful and regular on-site inspection of the Reid Fruits property in the Derwent Valley by Australian and Japanese government officials, Reid Fruits enjoys unprecedented market access to Japan, and is the first company ever to export non-fumigated Satonishiki cherries back to Japan. With a retail price of AUS $50 a kilo in Japan, Tim Reid was able to export over 17 tonnes in the 2008 – 2009 harvest year.
Only the Beginning
Along with the success of the non-fumigation of Satonishiki cherries, Tim Reid is planning to greatly increase production levels of cherry production in the near future. According to his planned forecast, Tim plans to greatly increase the amount of Satonishiki cherries from 24 tonnes in the 2008/2009 harvesting season to 67 tonnes by 2010/11, and 188 tonnes by 2012/13. These however, are quite marginal figures, compared to other dark cherry varieties that Tim produces for both domestic and overseas markets which amounted to 292 tonnes in the 2008/2009 harvesting year.
With the success of unprecedented market access to Japan for Satonishiki cherries, Tim Reid has received honorable mention from various politicians such as the Minister for Trade, Mr. Simon Crean who states that, “the win demonstrated how Australia’s sophisticated agricultural producers, aided by improved market access, could deliver regional jobs to Australia.” The Minister for Agriculture, Fisheries and Forestry, Mr. Tony Burke also commended Tasmanian growers for, “having adopted progressive production techniques of world standard and continue to modernize their orchards with new tree varieties and high-density orchards.” Apart from his duties as Managing Director of Reid Fruits, Tim is also the Vice President of Cherry Growers of Australia, the Deputy Chairman of the Quarantine Export Advisory Council, executive member of Fruit Growers Tasmania, and has recently been awarded the Order of Australia in the annual Queen’s Birthday Honours.
Raymond Roche is a Research Officer for the Agriculture, Forestry, and Fisheries Department, at the Japan External Trade Organization’s Sydney Office.
The views represented within this article are those of the writer and not necessarily the views of JETRO or the Japanese Government.