Blending two family businesses a recipe for success

Intergenerational change is one of the great challenges all family businesses face – but try doing it while bringing two family businesses together …

“Bringing two family businesses together can be quite challenging because you can have different ways of doing things,” says Michael Vorassi, with some understatement.

But an introduction made by their accountant led Michael and Johnny Tran to bring their successful family-based businesses together into what is now one of South Australia’s leading growers and suppliers of fresh produce.

“Johnny and I found we had a shared vision which has helped us to stay on track and really drive the business to where it is today,” Michael says.

Founded in 2010, Comfresh is a major supplier of fresh herbs and vegetables to major supermarkets and Australian households, employing 220 people with plans for expansion. The name ‘Comfresh’ comes from produce sourced from a local community.

With a grower network spanning all major regions in Australia, Comfresh is leveraging word-class technology to build a multi-million dollar packing facility, including three state-of-the-art greenhouses.

Both Johnny and Michael have drawn on the extensive experience and support of their families to develop and rapidly grow the business. Johnny’s mother, Oahn Nguyen, has been involved in the industry for more than 30 years, originally as a grower and then expanding into vegetable wholesaling in 2010, while Michael’s family are experienced herb and vegetable growers.

“Our parents have been a really supportive part of that process - being there, nurturing and supporting us to carry their values through the new business cycle the Australian market is experiencing,” Johnny says.

Ageing grower network
 

Horticulture is Australia's third largest agricultural industry, worth $11 billion with around 30,000 horticulture businesses employing close to 60,000 people. Most growers are small-scale family farms although the number of medium to large farms is growing and the industry is changing as it faces new challenges, notably labour shortages.

“The generational change in our businesses and our industry has really been brought on by the ageing demographic of growers and producers,” Johnny says. “There's a lack of a younger generation to come in and pick up those skills and all that goodwill and expertise that's already there and take that to the next level.

“There’s a level of risk and uncertainty in the Australian market due to an ageing demographic of growers that’s going to play out over the next ten years.”

For Comfresh though, that is the greatest opportunity.

“Our customers have been really receptive to some of our quite ambitious plans,” Johnny adds, “our goal isn't to replace growers; it’s to ensure more security of supply year-round.”

Johnny and Michael travelled all over the world to see how other businesses in their industry are tackling similar challenges around labour shortages, material shortages and market barriers. They found they could leverage world-class technology and automation to address some of these challenges in their business.

“When we were looking for the right mix of technology to bring to this project, we went to a wide range of different countries to find solutions to some of the challenges we have in Australia, including Finland, Poland, Spain, Italy, France. We picked the best of what exists to address the needs that we have here in Australia, and we brought that all together through this project,” Johnny says.

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Leveraging world-class technology

The new world-class greenhouses and packing facility will complement Comfresh’s grower network to ensure the supply of fresh produce to Australians all year round.

“The big difference with these greenhouses as opposed to others is that we can utilise our labour much more effectively. We have the ability to call on product, to call on plants, in the gutter systems they're growing in and actually bring them to the harvest staff, which means that we got a higher concentration of higher plant density and there's less human movement,” Johnny says.

“We're extremely efficient, in terms of harvesting, packing, product movement, transportation, logistics. All of that is done from a centralised location.

“The main improvements around labour efficiency will come from a reduction in people movement, where we’ll have robots doing some of the work that you would have previously done by hand, and we’ll increase our growing efficiencies by using artificial light and different irrigation techniques.”

Michael adds this has significant yield and seasonal benefits: “The artificial light also increases our growing time. At the moment, you're relying on the sun to create light; by using artificial light, we can expand our growing time from a 12-hour period to an 18-hour period. Winter is a difficult time to grow crops and the LEDs allow us to have consistency when the sun isn't available,” he says.

ANZ has been proudly associated with both family businesses for many years and we were pleased to be able to support bringing the two businesses together and backing Comfresh with its expansion plans and the next exciting stage of their growth.

Isaac Rankin is Managing Director of Commercial and Private Banking, ANZ