From popcorn to pork feed, organic is growing

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Organic grain products are providing a steadily expanding opportunity for growers able to step up to more direct engagement with end users

Photo of Quentin Kennedy

Kialla Pure Foods managing director Quentin Kennedy at the company’s Greenmount-based mill in Queensland.

PHOTO: Rebecca Jennings

“Flour isn’t sexy,” says Quentin Kennedy, managing director of Queensland organic grain-milling company Kialla Pure Foods.

But then he explains how it can be, with a little value-adding and product passion. “Bakers are always on the look out for the next big thing,” Quentin says.

Organic flour accounts for 60 per cent of Kialla’s production and the mill’s complete range offers kitchen aficionados a tantalising array of choice: buckwheat pancake mix, spelt bread flour, stone-ground wholegrain flour, polenta and popcorn, to name a few.

Kialla has positioned itself as a one-stop shop for organic baking ingredients, offering nearly 90 products milled from 20 grains. In 25 years it has grown from its origins in a local grower’s shed to become one of the nation’s largest solely organic mills, with an output of 10,000 tonnes a year and an annual turnover of $15 million.

Quentin, in partnership with his wife Michelle and parents Noel and Robyn, bought the mill at Greenmount, 20 kilometres south of Toowoomba, in 2006. Their only experience with organic farming was through Quentin’s previous role as managing director of Biological Farmers of Australia (now Australian Organic, of which he is on the board of directors), which oversees organic accreditation.

“I didn’t know a thing about flour milling, but I have always been interested in organic farming and I could see the opportunity for the industry,” he says. “Biological Farmers of Australia provided a good grounding, but purchasing Kialla was the opportunity to work in – not just for – the industry.”

The Kennedys have invested $4 million in modern milling equipment, such as auto-packing technology, and have developed new export markets and implemented strict quality assurance processes such as the Safe Quality Foods program.

“We have also invested in our people. Milling is a dying art, so we put our millers through a world-recognised course and they achieve a trade qualification from the National Association of British and Irish Flour Millers,” Quentin says.

Millers are trained to work on four different operating systems at Kialla: a 2t/hour wheat mill, 1t/hour maize mill, 0.5t/hour stone mill and 0.5t/hour pin mill for gluten-free milling. The Greenmount site also has 7000t of sealed storage with carbon dioxide gas piped in for organic insect control, sophisticated packaging facilities and a 10°C temperature-controlled warehouse that can store 700t of product.

The mill processes grain sourced from 20 to 30 organic growers spanning Central Queensland to opportunity growers in the lake-bed areas of western New South Wales. The main customers are organic manufacturers, bakers and retailers. The export market is also growing and in September Kialla launched organic pancake mix into Costco stores in Japan.

Sitting between the production and consumption sectors gives Quentin a perspective on the challenges and opportunities facing the whole organic supply chain.

“Organic farming requires the right skills, the right land, the right mindset,” he says. “Our growers are motivated by many factors. Some are sick of commodity pricing, some don’t want to be dependent on chemicals, some have a purely philosophical approach.”

There are also many drivers on the consumer side of the table. Speaking at the 2014 Australian Grains Industry Conference in Melbourne, Quentin said the main reason people are attracted to organic food is for what it does not contain.

“Chemical-free, additive-free, hormone and antibiotic-free, and non-GM; consumers see these as benefits, and the environmental factors are also important. Organic consumers want to know where their food comes from and they also want to know that the farmers are paid fairly.”

This ‘food story’ is an advantage for niche companies such as Kialla. Quentin holds up a bag of organic flour and points to the product number: “I can trace this back to the farmers who grew this grain – it’s something the commodity market can’t offer.”

Quentin prefers to source Australian grain, but there are supply shortfalls. Kialla imports rolled oats from Finland where 20-plus hours of sunlight in summer produce hard-to-match quality.

Sourcing Australian organic popcorn is another challenge. “In the past we would have just gone out of stock, but the marketplace has changed. We can’t afford to lose shelf space so we import on an as-needs basis when we can’t source product in Australia.”

Kialla’s grain buyer, Rob Wilson, works with growers to match crop rotations with forecasts and customers are encouraged to provide 12 to 18 months’ lead time on orders so supply meets demand.

Quentin prides himself on the company’s collaborative approach: “We are prepared to pay premiums and we support growers when the price is down or seasonal conditions are tough, such as taking out-of-spec grain. We are loyal to our growers, but we expect the same in return.”

Over the past nine years, Kialla has paid an average premium of $195/t for organic wheat above the prevailing Australian Premium White (APW) price.

Strong future

“Our motto, ‘we only do organic’, is not just marketing,” Quentin says. “It’s a message for growers that we are committed, and reassurance to our customers.”

In his role as a director of Australian Organic, Quentin acknowledges it can be difficult for growers to achieve and retain organic certification. Australian Organic has developed an ‘Onboarding Program’ to help producers understand the Australian Certified Organic (ACO) Standard, prepare for audits and overcome practical farming challenges.

Kialla supports growers who are going through the three-year process to achieve ACO, provides administrative assistance with organic certification paperwork and helps growers plan their crops. Forward contracting grain for the first five years also provides stability and market continuity for growers. The company often takes this ‘in conversion’ grain, or out-of-spec grain, for its sister business Aus Organic Feeds.

The outlook is positive. Quentin told the Australian Grains Industry Conference that Australian market research company IBISWorld has forecast organic farming will grow by 49.6 per cent over the next five years.

Quentin plans to increase milling capacity by 50 per cent by 2020 to relieve bottlenecks at storage and to increase operation from the current two nine-hour shifts a day, five days a week.

He says export is a growing opportunity, especially into Asia, owing to consumer demand for ‘clean, green’ food. Organic stockfeed also offers increasing potential. Aus Organic Feeds supplies organic egg and chicken producers, and Quentin predicts organic pork as the ‘next wave’, driven by consumer demand for sustainably produced product.

More information:

Kialla Pure Foods,

www.kiallafoods.com.au;

Australian Organic Onboarding Program,
http://austorganic.com/ao-onboarding-program

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