The Companies
Within the context of the New Zealand industry, two significant players at the beginning of the 1990s were Southfresh and Foodstuffs. Southfresh was a fish broker, and Foodstuffs a supermarket chain buying fish suppliers from brokers or other suppliers, and on-selling it to retail customers.
Foodstuffs
Foodstuffs is New Zealand's third largest business totally owned and operated by New Zealand interests. On the basis of Nielsen surveys, the Foodstuffs banner groups of New World, Pak'N Save and Write Price accounted for a 56.3 percent share of the New Zealand supermarket sales for the twelve months to 2 November 2003. The collective turnover of stores affiliated to the Foodstuffs companies is estimated to exceed $7 billion annually (including GST). Staff employed by the Foodstuffs group, including retail members, is estimated to exceed 17,000.
The organisation consists of three separate, regionally based, retailer-owned co-operative companies, together with their Federation body, Foodstuffs (NZ) Ltd. The co-operatives are: Foodstuffs (Auckland) Ltd, which covers the North Island from Gisborne, Turangi, Taumarunui north; Foodstuffs (Wellington) Co-operative Society Ltd, which covers the southern half of the North Island; and Foodstuffs (South Island) Ltd which covers the entire South Island. The central warehouse purchases one third of the product line for its franchises. All other lines are purchased directly by the owner operators. Most Foodstuffs stores offer fresh fish products, although the range differs between stores. Whilst large stores have their own fish buyers, others rely upon supply from buyers based at other stores or at the regional co-operative. Fish buyers at the supermarkets have complete freedom to source fish from any supplier.
Southfresh
Southfresh started out in 1990 as a small fish broking enterprise connecting suppliers to buyers. Its primary customers were initially retail outlets such as restaurants, grocery outlets and wholesalers. Some individual Foodstuffs supermarket buyers were Southfresh customers. The business was built upon the lifetime fish industry experience of CEO Toby Warren. However, Toby was also aware that the much-reduced role of the broker was being further eroded as more business was being transacted directly between suppliers and customers. Brokers were effectively competing with both buyers and sellers, and were being "squeezed by both sides" in their endeavours to reduce margins further. Toby was faced with finding new ways of leveraging off Southfresh's role as an information broker to stay in business.
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