Prime Foods NZ- a company to watch

Prime Smoke Salmon is one of the most popular seafood delicacies found on the supermarket shelves. Turnover has grown rapidly and exports are now an important part of the business. In 1994 founder and managing director Henry Studholme developed the business in a disused honey factory in the Canterbury village of Hororata after a disastrous experience as a farmer sent him searching for new opportunities.

In the 1970s during the time of the Muldoon government, when subsidies were available for farmers, Henry had been encouraged to borrow heavily to develop his farm. But ‘Rogernomics’ brutal restructuring took place and Henry was one of about 1200 farmers who were forced off their land in 1989.

“The combination of drought, heavy borrowing, and high interest rates were too much for us. We were dead ducks.”

Henry and his family of four young daughters moved to a cottage on a friend’s property. His wife Jenny went back to nursing and Henry took farm labouring jobs.

“One of the worst things about losing a farm is that you also lose your home.” he added.

His four young daughters were, he believes, one of things that kept him going during those difficult years.

“The house was always full of laughter and music and they radiated a boisterous sense of hope.”

Aged 39, Henry found it difficult to get another job. Eventually, in 1992, he was appointed manager of the World Deer Congress for 18 months, and that gave him the necessary confidence to think creatively about his future. Like many of those who lost their land in the 1980s he was, in 1990, given a new start grant and with this he bought a 3.64 ha block on the edge of Hororata. A friend suggested that he use the abandoned factory on the property to smoke salmon.

Henry admits that when the suggestion was first made he knew nothing about smoking salmon. Instead of being defeated by his ignorance he took himself to the library and read up all he could on smoking salmon. While there he found a Scottish recipe from the 1950s for marinating and smoking salmon. In 1996 he bought a second hand smoke house and started to experiment. Within six months he was selling Prime Smoke salmon to the public.

“These were interesting times; we didn’t have any capital and so we had to fund everything from cash flow. The Countrywide Bank were very helpful in those early days.”

For Henry these were years of real challenge.

“I had no background in food processing and none in the seafood industry, nor did I have any contacts with the retail or food service industry. We had to build relationships from scratch and this took a lot of time and effort.”

Initially Henry was assisted by a friend who was a salmon farmer and he provided some of the contacts. Henry made contact with a food service distributor in Auckland and was soon supplying hotels and restaurants with his product. In 1996 he was also approached by an Auckland company to contract pack a retail brand of smoked salmon which gave them their first large reliable chunk of business.

“This was a really good move for us as the margins were much better.”

After battling away gathering more and more clients one by one they began negotiating with supermarket managers alongside seafood company Independent Fisheries.

“It was their representatives who helped us penetrate the market for smoked salmon.”

In 1998 they became an export licensed plant which allowed them to break into the overseas market. At first the company picked up small orders to the Pacific, but in 2001 they were approached by a Japanese chain of 500 restaurants who were looking for a special 90 gram cut of salmon with the skin on and the bone out. This had to be exactly 18 mm thick so that they could put it through their griller. Orders for these lasted until 2003 when the escalating value of the New Zealand dollar killed the trade. However by that time the company was on its feet financially.

Prime Foods was able to fill the gap with the increasing demand developing in New Zealand where the market was growing rapidly.

“We got the chance to package smoked salmon for a supermarket house brand.”

In 2004 and 2005 Prime Foods was the seafood supplier of the year to Progressive Enterprises – a considerable accolade in a very competitive industry.

Right from the beginning Henry has made it company policy to always offer quality and service.

“This has always been our strongest point of difference.”

Henry admits that the choice of smoked salmon as a product to process was a very good one.

“It is a top-of- the-range product in a growing category and one in which we have considerable control over the product from purchasing the raw material through to production and marketing. This is such a change from farming when the product leaves the farm gate and from then on you are at the mercy of a number of different companies. With salmon we market; with sheep we sold.”

The salmon used by Prime Foods comes from Sanford’s salmon farm at Big Glory Bay in Stewart Island. Henry believes that salmon from there are of excellent quality.

“They come from fresh clean waters and with the cooler temperatures their flesh is firmer.”

The salmon arrive fresh (with occasionally some frozen) in H&G form (the head and guts have been removed).

At Prime Foods the fish are filleted, then put in brine and marinated (a unique herbs and spices marinade is used in the process and remains a company secret), then smoked using native New Zealand hardwood. The salmon fillets are then sliced, vacuum packed and dispatched.

For Henry one of the pleasures of running Prime Foods is the chance to market the product. This involves working with clients on designing product specifications to suit them. Prime Smoke salmon slices are mainly sold in 50, 100, 200 and 500 gram packs, and there is also a low cost shavings pack which is one of the most popular in the supermarket. As well there is hot smoke which comes in 150 and 200 grams, and cocktail fins in 200g packs. And there are a variety of labels. As well as Prime Smoke there is also a premium quality Studholme which comes in a cardboard sleeve.

A new innovative range of award winning marinated salmon products are now selling into Singapore and Australia. Designed by a leading New Zealand chef, Michael Lee-Richards, these products are presented as a quick and easy meal solution in three delicious flavours. They are sold under both the Studholme and Prime New Zealand brands.

Prime Foods have also diversified into importing Apple Crisps and Heat and Eat pre cooked meats, distributed under their Studholme brand.

Studholme Apple Crisps are 100% pure apple which have been vacuum dried (not fried) to produce a genuine crisp. They are an ideal healthy snack for all age groups, but especially children.

Studholme Heat and Eat Meats are proving very popular, especially the Lamb Shank in Red Wine and Rosemary sauce. The Lamb Madras is also selling well. They are produced using a new award winning technology where the quality of the meat is not in any way compromised by the retort process.

Prime Smoke smoked salmon is now sold in 300 supermarkets in New Zealand. Foodservice is also a growing market.

Exports account for 20% of sales with the Australian market showing very strong growth. Prime Smoke salmon is now in 600 Woolworths Australia supermarkets.

Production constraints are limiting expansion in to export markets. A new factory is planned to begin production in Asia in early 2009.

“The biggest challenge we face at present is that the factory is just too small for the demand. The new plant will allow us to take advantage of the many overseas enquiries we are receiving.”

Other established markets include Dubai, Singapore, Japan and French Polynesia with a steady stream of new enquiries coming out of the Middle East, India, China and the USA.

Henry explained that the extra capacity will allow an accelerated new product development programme. Already they are working on several new ideas.

Also they have developed 200 gram packs of smoked mussels. These are cold smoked like the salmon and have, as well as natural, the additional flavours of chilli, garlic and barbecue.

Above all Prime Foods remains a local Canterbury business. Hororata is a small community – it has a pub, a café, a petrol station and a beautiful stone church- about 35 minutes drive from Christchurch towards the Alps. Those whom Henry employs are locals.

“We know most of them well because many of them are spouses of local farmers. We train them all here and they learn to do things the way we want them done.”

Something of the farming ethos survives – a sense of being friends pervades the whole factory. And two mornings a week, Jenny Studholme, Henry’s wife makes scones for morning tea.

From walking off their farm in 1989, Henry and Jenny Studholme through determination, creativity and hard work are an example of business success and survival.

Undoubtedly Henry Studholme and his Prime Foods will be a company to watch in the future.