The major Australian supplier of navy beans, the main ingredient in baked beans, says the local industry, which began during World War II, would not survive if SPC Ardmona shuts down its Victorian cannery.
“The reality is that the navy bean industry would close … would finish,” Bean Growers Australia managing director Lloyd Neilsen said.
Speculation about the future of the fruit and vegetable processor has been fuelled by this week’s announcement that the Federal Government will not help fund an upgrade of SPC Ardmona’s old factory and the company’s poor financial performance in recent years.
“In 2011 and 2012 we bought $100 million worth of stock and wrote it off, so two massive losses,” SPC’s managing director Peter Kelly said.
“And an operating loss this year (2013) – so it’s a severe problem.”
SPC Ardmona employs up to 1,200 people at the Shepparton plant at peak season.
While packaging fruit is the main part of the business, it is also the only baked bean cannery in the country and processes almost all of Australia’s locally grown navy beans.
A matter of national security
Navy beans were first grown in Australia near Kingaroy, in Queensland, during World War II.
“There was a lot of American troops in Australia, servicemen, and part of their staple diet was baked beans,” third generation grower Gary Truss said.
“So somebody had the idea well we should try and grow them here.”
The US army provided the seed, the federal government contracted growers, and production was controlled under the National Security Act.
While the first crop was ploughed back into the soil because farmers did not know how to harvest it, it did not take long for the industry to expand, with more than 100 growers in Queensland by the mid-1940s.
A history of navy bean production
Australia’s navy bean industry is tiny compared to the world’s biggest producers, the US and Canada, which together average more than 250,000 tonnes a year.
At its peak, the local industry produced around 9,000 tonnes, but drought and the loss of major buyer Heinz in the 1990s have seen annual production shrink to around 3,000 tonnes.
Bean Growers Australia, a former farmers cooperative turned company, has been at the heart of the industry for 50 years.
It has a factory in Kingaroy where it cleans and colour-grades navy beans before sending them to SPC Ardmona.
While it originally sourced most of its beans locally, it now also contracts growers in irrigated areas like the NSW Riverina and North Queensland’s Burdekin to reduce the risk of running out.
The crop with a blustery reputation can be tricky to grow because it needs regular watering but does not like too much.
But Mr Truss says a fast growing season and a relatively good farm-gate price make it worth pursuing.
“There will be years when you lose them like last year – we lost our entire crop because of the wet weather – then other years have been very good,” he said.
“So you’ve got to look at them over a period of time.”
While it has already diversified into other legumes to survive, Bean Growers Australia is also sticking with the navy bean despite the current challenges in the industry.
“It certainly fits into our system, fits into the growers’ systems, and I think it’s something that we’d really like to see continue,” Mr Neilsen said.
Aussie beans boost SPC’s bottom line
Last year SPC Ardmona launched a 100 per cent Australian-grown baked bean line, boycotting cheaper imports from North America.
While sales have not shot up, they have remained steady despite a higher shelf price and the company says it is heading in the right direction.
“I think the consumer will appreciate what we’ve done,” Mr Kelly said.
“They understand that we’re promoting more jobs in Australia, more jobs in agriculture in Australia, stronger growers, stronger food industry in Australia, and they’ll give us some loyalty for that.”
Whether SPC Ardmona gets any more financial help from its parent company, Coca-Cola Amatil (CCA), will not be known until February 18.
The food and beverage giant originally promised to spend more than $90 million upgrading its Shepparton cannery if the federal and Victorian governments both chipped in $25 million.
Now that Cabinet has ruled that out, CCA is not throwing the struggling food manufacturer any more lifelines until after a review of SPC Ardmona’s operations is finished.
Watch Landline on Sunday at noon on ABC1 for more on the fascinating history and uncertain future of Australia’s baked bean industry.