What’s next for packhouses?Business Management
Australian packhouses are going through a period of transformation as new technology automates roles previously done manually, lifts output, and changes the role of labour.
The significant investment required is seeing the emergence of a handful of ‘super pack facilities’ which can sort fruit by brix, pressure, internal defects, size and color which will drive significant unit output efficiencies per employee and produce real time data capturing traceback to individual orchard blocks which then provides the tools and KPIs to bench mark and bring all growers to industry specific yield and pack-out capacities.
Does this herald a period of consolidation towards the centralised systems of international operations?
At the Post-harvest Seminar 2020, Kyabram Cold Storage Director Chris Fairless moderated a panel of Victorian packhouse representatives consisting of Plunkett Orchards owner Andrew Plunkett, Montague General Manager Rowan Little, and Director of Bonview Orchards and 9Mile Fresh James Ryan, all of whom are significantly expanding their packhouse investment. The conversation covered what is driving investment, the value of pre-sizing, technology, and the changing role of labour in the modern packhouse.
Chris: What is an efficient and financially viable packhouse going forward?
“[9Mile] needed to upgrade, so we looked at what the growers and retailers need,” said James Ryan, referring to the internationally-recognised EU model that includes pre-sizing.
“We’re following the EU model too, similar to 9Mile,” said Andrew Plunkett. “First step is to pre-size to take advantage of robotics.”
“The thing with packing is it’s pragmatic,” said Rowan Little. “It’s like renovating a house; you do the bathroom, and while you’re doing that you realise the kitchen needs work, and so on. Our last main build [at Montague] was 1984, but the time for patching up is over. So we looked around and did the best with what we knew.”
Chris: What do you see as a measurable capacity for consolidated packing facilities to increase efficiency?
James Ryan said they were hungry for technology.
“We’re all in one big industry, we need to be transparent and communicate with growers and retailers,” he said. “You always have to be looking and understanding your whole supply chain.”
“It’s easy to get obsessed about the packhouse, but really you should look at the whole supply chain holistically rather than just the nucleus of kit,” said Rowan. “Adding kit to an inefficient system isn’t enough.
“We realised that our old building just wasn’t efficient, and we had to start again.
“There will be changes in the needs of the next generation. Bill Montague wanted and was prepared to do everything himself, but the next generation won’t do that. They will just want to grow and let someone else handle the packing.
“That’s what will help packhouses survive: economic and social change.”
Chris: Has automation taken choice away in terms of what is 1st class, 2nd class, etc?
“Depends on where the consumers are heading,” said James. “Health? Size? Taste? It always comes back to consumers. If we communicate the process, they can understand why we do what we do.”
“With Future Orchards and higher volume, you have to trust your data at each stage (maturity, pack-out, etc),” said Rowan. “If you don’t have a system that’s transparent, that all falls down.
“Data is how you improve quality and make changes further up the chain.”
Chris: Does Montague have data benchmarks for your growers? Is it a function of your business to bring people forward?
“That’s something that’s still a bit untouched world-wide,” said Rowan. “Our challenge is that data from Washington can’t really be used in Batlow. There always has to be a translation.
“Sometimes, though, a struggling grower just needs to see what’s being done elsewhere.”
“Every business has a different sweet spot. It’s not one-size fits all,” said James.
“Our technology gives us info to send back to the grower,” said Andrew.
“That’s why all three of us are going pre-sizing. It’s instant feedback,” said Rowan.
Chris: All three of you have moved away from ‘commit to pack’ production lines. Andrew is investing, Montague have just turned dirt on their facility and have a long way to go, and 9Mile has already built theirs. How does this compare to the American model?
“American labour costs were so low, that’s why their model isn’t viable for us, but as that changes they too are going for pre-sizing,” said James.
“The grass is always greener,” said Rowan. “It takes hours for American sheds to change over from one variety to another.”
Chris: How will new technology affect packhouse labour?
“The problem with horticulture is that a lot of staff don’t have a clear career path, and now there is suddenly a whole range of jobs for them to do,” said Andrew.
“But we shouldn’t underestimate how excited our employees can be about seeking opportunities.”
Chris: Right. Technology does not mean labour will be cut; it will just be different?
“Our goal will be to use the labour we have,” said Rowan. “We don’t think labour is something you ‘get away from’. It’s not about ‘labour reduction’. You just transition from unskilled workers to technicians and IT.”
“Our labour’s skillset has changed,” said James. “Each employee’s output is a lot higher.”
Read more about the Post-harvest Seminar, and view photos from the panel here.