Food for thought

Tasmania-based infant food producer and distributor, Bellamy’s Organic, has grown from humble beginnings to become an international company. Leon Gettler looks at the role of the chief executive officer and chair in the organisation’s stellar success.

Laura McBain MAICD, the managing director and chief executive officer (CEO) of Launceston-based Bellamy’s Organic, believes the company’s success with last year’s ASX listing owes a lot to her close working relationship with the board as well as the systems the company’s owners, Tasmania Pure Foods, already had in place.

“It’s a pretty good case study for other companies looking to launch an initial public offering (IPO),’’ McBain says. “You could look to Bellamy’s and see it is a company that made that transition relatively smoothly in comparison to what I see with some smaller listings.”

McBain says the interesting part about Bellamy’s is that it always took the view of operating in a large company environment and its reporting systems and processes were very much aligned with other parts of the business. “When that is missing, it can often cause transitional issues for smaller companies moving into the public company space.”

She adds: “There was a great deal of discipline around that part of the business. The significant changes were obviously things like the end-of-year reporting requirements where a lot more went into it than previously. But generally when you look at how we prepared ourselves, we had most of those functions already in place.”

The acquisition

From the day Pure Foods took Bellamy’s under its wing, there were monthly board meetings and quite rigorous reporting structures. Non-executive chair Rob Woolley MAICD, says the systems had been up and running from 2007 when Tasmania Pure Foods acquired the company from Tasmanian farmer David Bellamy, who had originally started the food company with backing from some “mum and dad” investors in Tasmania.

“We didn’t have to make any systematic changes to the way we do business at all and the practices at board level have simply gone up a notch,’’ Woolley says.

And those systems made the float easier. “The financial systems we had in place were top level,’’ he says. “We had been running them for several years so the robustness of the information we were getting out of that, the deep sales and supplier information we had, just made the IPO so much easier.”

Managing the growth in the lead-up to the float, he says, was the big challenge.

“The company had been growing so quickly and during the IPO period, it grew at a terrific rate, particularly in the three to four months leading up to it. We had to try and set up a situation where at least the managing director, Laura, had enough time to make sure the business kept on track.

“That’s the problem with IPOs, they are all consuming.”

Woolley continues: “But we had a sub-committee of the board and everybody worked really closely and we had good expertise on the board. At that stage, we had someone who had been a stock broker for most of his life so he was really handy and helped us understand the dimensions. We quickly developed a very strong relationship with the underwriter and they knew our expectations.”

A long history

McBain, who trained as an accountant and Woolley, who also has an accounting background having served 20 years at Deloitte, have always worked closely together going back to the time when McBain had joined the private company as a financial controller. The situation changed when Tasmania Pure Foods acquired the company.

Woolley explains: “Laura came across back in 2007 and took on the role of general manager when the company was small. I had worked with her in another role and I saw she had a real gift for this business. I had a mentoring chair role with the founders. Laura was the contract accountant which was how we first met and without demeaning the predecessors, they were typical founders. They had all sorts of good ideas but it was hard to marshal them to build the business.

“We both stepped out of our respective roles. We liked the opportunity with organics, it was very early days. In those days it wasn’t mainstream.”

McBain became managing director following the acquisition.

Overseas expansion

Bellamy’s sells infant formula and baby food through the major supermarkets as well as in pharmacies, online and in independent supermarkets in Australia.

But the really exciting prospects lie in its growing overseas footprint. Bellamy’s exports products into China, Hong Kong, Singapore, Malaysia, Vietnam and New Zealand. It plans to expand into the US and the UK next year.

McBain says she and Woolley have a vision of the company’s expansion overseas. “Rob and I have both operated closely,’’ she says.

“We both had an alignment of views about how this company would go in any event. I’ve always felt I’ve had full support of the board to expand offshore and I would imagine, in fact, that’s what the board expected me to do.”

Wilson says the board has worked closely with McBain to expand the brand overseas.

“It was private equity without the leverage and we all just rolled our sleeves up and worked whenever we could,’’ he says. “It was primarily myself and to a lesser extent one other director who got actively involved on the finance side. But it was primarily myself and Laura.

“We went to Singapore and then to China and we applied some principles that had served us pretty well through this. Whenever we do something, we make sure to give it enough time to give it oxygen and we make sure we really do understand what we’re doing.

“Very early on we used distributors and we decided it was never going to work for us. This company now has expertise and experience in all aspects of its supply chain plus it’s a great branding and marketing story.”

As McBain says, the board is committed to the strategy. “That level of engagement from the board in all aspects is what makes Bellamy’s special,’’ she says.

“One of our board members lives in Shanghai and brings that type of understanding of the Chinese market which is important but equally another director is experienced in the Australian environment and while the growth story in the future is about the growth offshore, the story to date has been about what we have achieved in Australia as a brand.”

McBain says communication is the key for CEOs to work with boards. “It’s really about making sure they feel they can talk to me any time and equally I can speak to them. It’s as simple as that,’’ she says.

“What you’re relying on from the board is for them to bring their own skill sets, expertise and knowledge, and provide you with a viewpoint or an alternative angle and way of looking at things. That’s where the value is for a company. If that communication is open, then you can achieve great things. That’s how our board was built when we were unlisted and it’s equally true now.”