June 2016

Working with AGMARDT to develop a healthy snack brand for kids

The Agricultural and Marketing Research and Development Trust, AGMARDT, is an independent charitable trust set up by the government in 1987 with initial funding of $32 million from the wind up of the British, Christmas Island and NZ Phosphate Commissions. It strategically invests in programmes focused on exploring market opportunities, encouraging innovative ideas and developing future leaders within the agribusiness sector.

Kiwigarden directors Taine and Jo Randell were able to fast-forward the development of their business into Asia with the help of an AGMARDT in-market grant.

Kiwigarden is a Hastings-based producer of natural and healthy freeze-dried snacks for kids. These include:

  • apple slices
  • banana and honey yoghurt drops
  • kiwifruit yoghurt drops
  • mixed berry yoghurt drops
  • sweet corn kernels
  • and strawberry yoghurt drops

Set up by the Randells two years ago, it sources local fresh food for its widening range of products, 85% of which are exported.

“Our goal is to make healthy food fun, convincing little kids as well as big ones that healthy doesn’t have to mean boring.”

Freeze drying involves taking fresh food, then flash-freezing it and putting it in a vacuum chamber where about 98% of the food’s moisture is drawn off by evaporating the ice at temperatures as low as minus30degC. The freeze-dried food is then sealed in moisture and oxygen proof packaging.

Freeze-dried food retains 98% of its raw nutrition but weighs only 20% of its original weight, making it great for lunches, snacks and NASA astronauts, Taine says. “Being freeze dried, we have no preservatives, no artificial colours or flavours and no added sugar. We’re naturally high in flavour because we retain virtually all of our nutrients, vitamins and minerals.”

The in-market grant was used to commission reports on distribution channels and regulatory requirements and carry out market research including taste profiling in China and South Korea.

A key part of this work was meeting distributors and new buyers at trade shows and exhibitions in Beijing, Singapore and Shanghai.

Based directly on taste profiling and feedback from these shows, Kiwigarden is about to launch four new variants to its product range.

The grant enabled Kiwigarden to look carefully at the distribution model it wanted to use. As well, they found opportunities for expanding their range of brands into other supermarkets.

Since the AGMARDT grant was approved in late 2014, Kiwigarden now has a master distributor based in Qingdao, is due to release a new range of 20g pouch baby products in China, is supplying a Chinese infant formula brand with product, a USA children’s snack food company and a New Zealand infant formula and children’s snack food supplier.

Kiwigarden is now stocked in Singapore supermarkets and South Korean department stores, and is also available on-line.

As part of the business expansion, AGMARDT also made Kiwigarden a loan to buy and build additional packaging machinery from Italy, a move which has enabled them to employ an extra eight fulltime staff.

“The AGMARDT funding has massively fast-forwarded our business in Asia to a much larger scale than we had originally forecast. The packaging machine has given us the flexibility to fulfil customer orders. AGMARDT have been the best. They were very helpful and pragmatic,” says Taine.

AGMARDT invested close to $5million in grants across agribusiness and forestry in the past year, working as a catalyst to encourage transformational change in the agriculture, horticulture and forestry industries.

General Manager Malcolm Nitschke says “We are not a huge investor, but we invest in areas that will make a significant difference to the future of our industry. That is what spins our wheels and what drives us at AGMARDT.”

“We are very much a seed funder to seed ideas and innovations and to get the ball rolling, and being prepared to help out until the project becomes commercial. We are charged with helping test, evaluate and get projects going.  We are an independent charitable trust with our own funding, even though we report to the minister once a year. We make independent decisions based on where the board wants to go in their strategic direction and intentions in any one year.”

“We have a very broad mandate and there are three pillars to what we do:

  1. we focus on leadership and governance for developing young people to be future leaders
  2. we encourage and support people with bright ideas so they can bring them to life
  3. we enable agribusiness to integrate with customers in the marketplace with in-market grants and in-market immersion.

The latter is what Kiwigarden has benefited from. We helped them because they were a start-up company with a novel process. The board felt Kiwigarden had the opportunity to develop into a new area.”

“We always ask: what is the value back to primary industries in New Zealand?   As companies like Kiwigarden develop and expand, we assume they start buying more primary produce.”

“Kiwigarden needed help to do some marketing and to understand their market. Part of our grant was to help them get people overseas into the market and to get marketing programmes in place.”

“We are very focussed on in-market projects, particularly with young companies that don’t have a lot of capital or cash. We also made Kiwigarden an accelerator loan, which is a short term loan to buy equipment. That enabled them to produce more and meet the demand generated by the in-market development work they had been doing.”