A winning formula for export growth

From a struggling mum-and-dad business a decade ago to a listed company with growing exports to China, Bellamy’s Organic has literally found a winning formula.

The Launceston-based manufacturer and distributor of baby food products, including formula, cereals and drinks, has prospered on the back of a strong growth strategy and a trusted brand.

"We’re still pinching ourselves," says Chief Executive Officer Laura McBain, who notes that turnover for the 2014 financial year exceeded $50 million, up from about $3 million in 2007, when she was promoted into the top job.

McBain, named 2013 Telstra Tasmanian Business Woman of the Year, has overseen the rise of Bellamy’s Organic, after joining the family business in 2005 as General Manager. By her own admission, when she joined the company, it was "a complete train wreck". Key to the turnaround has been strategic planning, including a team meeting three years ago that set ambitious goals: achieving $40 million in annual revenue; setting up offices overseas; and becoming a leader in the organic food industry. All three goals have now been achieved.

"Having those bigger-picture visions helped us to get there," McBain says. "I remember putting that $40 million figure on the board and a few people sniggered."

Other keys to growth have included:

  • recruiting people with passion and drive
  • developing sound internal structures and processes
  • treating the business like a big company
  • creating a credible brand
  • getting distribution models right, especially in Asia
  • staying patient

Founded in Launceston in 2004 then bought out by Tasmania Pure Foods in 2007, Bellamy’s Organic makes about 30 organic products. With a staff of 32, it is increasingly targeting growth in Asian markets such as China, Vietnam and Malaysia.

Perhaps its greatest success story to date has been China. A food-contamination scandal occurred in China in 2008 when the toxic chemical melamine was found in some Chinese baby formula products, leading to the death of about six children and causing hundreds of thousands more to fall ill. The long-term commitment by Bellamy’s Organic to clean and green organic production instantly paid off, with its sales of formula to Chinese markets skyrocketing.

Despite the market opportunity, McBain says China remains a complex market and getting business structures right to sell products through 22 different distributors has not been easy.

"Sometimes it just seems overwhelming, but there is a big prize at the end of it if you can keep your brand strong."

What has also helped is the appointment in Bellamy’s Organic’s Shanghai office of a Chinese-born executive who studied in Australia. This has helped break down cultural barriers and is a model that McBain says other Australian companies would do well to adopt.

"We’ve got an untapped resource in that we have a massive amount of students coming here to learn and they want to be able to utilise those skills in foreign companies, but they’d also love to be able to use them in their home countries, too."

After successfully listing on the Australian Securities Exchange in August, Bellamy’s Organic has a market capitalisation of about $120 million. McBain says the decision to list was not taken lightly and requires a huge commitment to regulatory compliance and reporting that may not suit all businesses.

"We’ve treated our business as a large business, but there were new levels of complexity that we had to quickly get our head around," she says.

Cashed up after the listing, McBain believes the company’s prospects for continued success are strong, particularly in Asia.

"We’re offering something unique – we’re an Australian-made brand and we’re organic, so people look to that and know that this is the best quality you can get. People who want that premium product will turn to companies like us."

In other words…

  • Think big and plan for it to happen
  • Focus on getting the right people and processes
  • Build a credible brand

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