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The document summarizes the formation and goals of Encounter Olives Australia Pty Ltd, a joint marketing venture between South Australian olive growers. The venture aims to sell high quality Australian olive oil to overseas markets like the US to obtain higher prices for growers. It plans to raise $200,000 over two years to fund export market development and targets a minimum $6.50/liter return for growers.
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- 1. In the beginning The following Spanish “Lecrin Valley” Olive Mill was built in 1576 The “Old” mill was a form or co-operative where all the village helped pick the fruit and all had a hand with the “crush”. The Oil was then shared. By working together
- 2. In the beginning Trees are left as either multiple or single trunk. Major pruning takers place every 4 years for hand picking with rods. Flood irrigation is used on the flat land, dry grown elsewhere.
- 3. The Challenge Olive Oil is a Global Market Global Players-Italian, Greek, Spanish. European subsidies. Our challenge Is to focus on a niche market area. Be cost competitive. Seek out the contacts. Do the research Service the orders that we obtain.
- 4. Encounter Olives Australia What is Encounter Olives Australia Pty Ltd It is a Joint Marketing Venture formed exclusively to facilitate the sale and “Value add” to our Extra Virgin Olive Oil. The target is to have a sales presence in a large overseas and domestic markets during 2007/2008. Encounter Olives has been set up by growers who want to develop the idea of working together.
- 5. Encounter Olives Australia Our mission Is to sell consistant blends of high quality South Australian Olive Oil, produced by South Australian olive growers, to health conscious and learn’ed consumers that can afford to pay the price that we need to remain sustainable and profitable.
- 6. Today Supply of EVOO in Australia will exceed demand well before 2010. To find an outlet for our oil we will have to export. The cost of finding and developing export markets is beyond most of us. The solution is to work together
- 7. Today Export markets often need volumes which are larger than individual growers can supply. Cost of harvesting, processing and bottles etc are dearer in small individual volumes. Internal competition with one another is counter productive. It will be hard enough to compete with oil from other countries. The solution is to work together
- 8. Today Small to medium growers cannot survive on $5.40 or less per litre being offered. Currently small to medium growers are able to find local markets through friends, local business and markets. There will be increasing competition for these sales. The solution is to work together
- 9. The way ahead While the company needs to make money in order to fund operations and to pay dividends to shareholders, the majority of money made will flow through to growers in the form of higher prices. The company needs initial funds to develop the export markets
- 10. The way ahead How will we get there? It is estimated that the company will require around $200,000 to fund the first two years of operation. It is intended to apply for export development grants to assist with funding. Year one cost $106,500 Year three (2009) first estimated $150,000 margin Other forms of raising money may include sponsorships from suppliers and bank loans based on received orders.
- 11. The way ahead The first country we will target is the US. The Free Trade agreement eliminates duties. There is almost no language barrier. We have similar cultures. We have similar eating habits. The distribution chains are similar. The market for olive oil is very large and relatively immature.
- 12. The way ahead The company will target outlets such as Wholefoods which provide high quality products to discerning shoppers. The company will seek out distributors who are experienced in supplying the better quality outlets. The company will seek advice from experienced exporters.
- 13. The way ahead To obtain higher prices for growers we will need to value add to obtain higher selling prices. By value adding ,that is packaging the product, it is possible to obtain those higher prices. By selecting markets which are more exclusive it is possible to increase our price. By maintaining very high quality standards it is possible to increase our price and obtain repeat customers.
- 14. The way ahead We have a 12 months target period to find that first customer. EOA will aim for as high a price as possible for growers but the end price will depend on what our customer is willing to pay. As an indication, EOA would target A$6.50 per litre as a minimum return to growers. EOA must be a low cost market driven entity.
- 15. Encounter Olives Australia To ensure success EOA needs a guaranteed supply. EOA needs to be able to source large volumes of high quality EVOO. EOA needs to raise enough capital to fund the development. EOA needs to quickly find a customer.
- 16. Encounter Olives Australia There are a maximum of 19 individual shareholder positions available determined by Companies Law. The 20 th Share will be held by a Unit Trust for members. It may be possible to add further shareholder positions in the second year of trading. EOA is a company and not a Co-Operative.
- 17. Encounter Olives Australia Directors of EOA will include several representatives from the founding members. Some positions on the board will be open to Shareholders. In the event that there are more applicants for shares than there are positions available the distribution will be via a ballot.
- 18. Encounter Olives Australia Suppliers will be asked to sign supply agreements. Shareholders will be offered a place on the preferred suppliers list. All suppliers will be required to meet minimum quality standards and to be able to demonstrate this. Payment for oil will not be made until EOA has been paid by the customer so both the supplier and EOA will share some risk
- 19. Encounter Olives Australia Suppliers will be given their own “Personal Identification Number” “PIN” and batch number for the grove location. Each batch will be delivered, pressed and recorded with the “PIN” and batch number in order that the samples and oil can be audited. Before blending the “PIN” and batch number are once again audited for compliance. In addition the “PIN” number can be used for “Negotiated” bulk supply contracts for EOA member suppliers.
- 20. We have kick off We have established an “Interim board” of 7 members to represent you. A web page is under construction. ( info@encounterolives.com) Graphic packaging proposals are being invited. Shareholder & Unit trust investors are now sought.
- 21. How will we get there? We need to raise the funds via capital raising. Additional Financial assistance will be required in the forms of “Grant Funding” from State Government MAP funding, Federal and Local Government. Sponsorship will be sought from some of our major suppliers. The way ahead
- 22. The Budget has been put together. Please review the attached summary cost plan. Capital raising requires : $8,000 per shareholder a minimum of 16 shares @ $500 $900 per unit holder The way ahead
- 23. The Strategy We believe we can deliver packaged 500ml product into USA at a competitive landed cost. The targets are one or more of several “Gourmet” supermarket chains each having approximately 150 stores. The consumer movement wants to know if the product is Clean & Green, ie Wholefoods USA. OZ Trade have also been contacted and will arrange a series of meeting for us with these and many more distributors.
- 24. Sample 1 Mild Multi Estate (main focus) Sample 2 Fruity Multi Estate (future) Sample 3 Robust Multi Estate (future) The Strategy Market Strategy. Packaging must be bright and project the message
- 25. Outcomes Source markets for our oils. Collaboration within this group. To deliver better than “Bulk Market” returns to member growers. Create a ‘Financially Sustainable” company structure for the future. The solution is to work together Encounter Olives Australia
- 26. Encounter Olives Australia Outcomes One Brand One company. Reduced individual marketing costs. Reduced individual processing costs Competitive pricing – reduced overheads. The solution is to work together
- 27. THE WAY AHEAD Encounter Olives Australia Pty Ltd invite commitment from you tonight. Shareholder and Unit Trust agreements are required prior to two weeks from now ie 19 July. Funding needs to be in place prior to 17 August. We invite your participation.
- 28. Are there any further questions? Contact us