02/11/2011 - 11:02

Convenience, consistency key for Canon

02/11/2011 - 11:02

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IN 1984, aged 27, Richard Pace bought some second-hand food manufacturing equipment from a company that was going out of business.

While Mr Pace admits he knew nothing about the food manufacturing industry, he had worked for himself from the age of 18, selling items that ranged from security products to digital watches. 

Mr Pace named his business Canon Foods and said the food industry offered something his other businesses did not – consistent trade.

“With my other businesses I would buy a product and sell it; food had an attraction for me because if somebody bought it and they liked it, they would buy it again, so there was that constant business,” Mr Pace said.

A year later John Dickenson, who already had previous experience in the food manufacturing industry, joined Canon Foods as operations manager 

The pair had a vision to transform Canon Foods into something more than just a ‘seafood crumber’; they wanted to become a manufacturer and wholesaler of various meat products. 

Nearly three decades later, Canon Foods has a team of more than 70 staff, supplies its meat products to supermarkets, mining camps and schools nationwide, and has experienced a 20 per cent growth in turnover each year 

There have been challenges, however, particularly in 2004 when the company almost went bust after it relocated to its current 2,500 square metre Canning Vale premises.

“Every time we’ve moved premesis – and we’ve moved four times now – we have almost gone broke, because the food industry is horrendously capital intensive,” Mr Pace said.

“We’ve spent a million dollars in the last year to reduce the cost of manufacturing so we can stay competitive.” 

Along with the large overheads, the company has had to keep abreast of the constantly changing nature of food industry legislation. 

“Keeping up with changes to legislation in relation to the food industry, particularly labelling and occupational heath and safety, is most challenging, and we actually have people on board now who are experts in those fields,” Mr Dickenson told WA Business News.

In addition, regulations surrounding food exports from WA prevented the company from entering into the export market.

“The export market runs at a much higher level of regulation than the local market; if I was to export I would have to put my prices up, simply because of the cost of complying with that regulation,” Mr Pace said.

“We made the decision years ago to not go near the export market.” 

Instead, the company decided to focus on the domestic market and distribute its products to schools, hospitals and supermarkets in Queensland and South Australia in particular.

Mr Pace said the east-coast market now accounted for almost 60 per cent of Canon Foods’ total revenue.

Experiencing peaks and troughs in the company’s growth over the past three decades, Mr Pace said Canon Foods experienced its most significant growth after the GFC.

While Canon traditionally supplied frozen product for rebranding by supermarkets, in 2007 the company launched its own fresh and frozen products into supermarkets, attracting a new audience. 

“Since the GFC occurred people aren’t eating out as much and because we are in the convenience food business and it’s all cooked, all you have to do is put the product in the oven,” Mr Pace said.

“It has been particularly popular with Gen Ys as well, many of whom don’t like to cook.”

Mr Dickenson said the onset of the GFC also made it easier to recruit good staff. 

“Before the GFC you just couldn’t get people to work in manufacturing, but now we’ve got very strong core staff ... and that is significant because we’re not losing that skills base.”

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