Farmer of the Year and a cherry of a family business

Be upstanding everyone for the 2013 Australian Farmer of the Year, announced this month: let’s hear it for Tim Reid AM, internationally renowned, and a fifth generation family businessman.

He grows cherries just out of Hobart on the Derwent River, and it is quite a business, let me tell you – 157 years old, now 1000 tonnes a year from 400 acres with $10 million in sales, half exported.

The staff consists of 12 full timers, 650 casual backpackers at harvest time, 20 million casual bees at pollination time and three helicopter pilots to fan away the frost in the wintertime.

Tim and his wife Debra actually live in Sandy Bay, Hobart’s nicest suburb, overlooking the Derwent River, and commute 40 minutes to work, a leisurely drive north along the river through New Norfolk to Plenty. It’s a hard life.

In fact it really was a hard life. Tim inherited the family apple business in Huon Valley, south west of Hobart just as Tasmania’s apple industry was being hit by its second competitive catastrophe.

The first was when Britain joined in the European Common Market in the mid-1970s, which forced Tassie’s apple growers to grow new varieties and find new markets in South East Asia, away from the traditional UK market. The second was in the mid-1990s when China and Chile unleashed massive volumes of cheap apples on the world, and the Tasmanian industry suddenly became totally uncompetitive.

The number of apple growers in Tasmania fell from 1300 to 30, one of which was Reid Fruits.

The business had been started in 1856 by the ex-convict James Reid, who had been transported from Dublin to Van Diemen’s Land for stealing a pair of shoes for his feet, and passed to his youngest child, Tom, in 1900 and thence to Tim’s grandfather Steve who grew the business into a huge apple packing operation in the Huon Valley – packing 10 per cent of the national crop, only a tenth of which were grown on the Reid’s farm.

But when Tim inherited the business from his father Tom, the industry and the business were shrinking rapidly. There was obviously no future in it.

Tim and Debra decided to switch to cherries and made the very emotional decision to sell the Reid family farm in the Huon Valley and move to better cherry growing land on the Derwent. They could also see they needed scale to survive and decided to raise capital, selling 35 per cent of the company to local investors for $4 million.

Cherries are a higher margin and more secure business than apples, partly because China and Chile haven’t discovered cheap cherries yet (despite the pleasing alliteration that would be involved).

A few years ago Tim and Debra Reid branched into the Japanese variety, which are the Wagyu beef of cherries – yellower in colour and more difficult and costly to grow, but highly prized in Japan so they sell for $25 a kilogram, which is about $10/kg more than the normal red variety.

Because Reid Fruits is owned 35 per cent by investors, there is a board of directors with two shareholder representatives, including former Senator Brian Gibson as independent chairman. The company pays dividends every year unlike most family businesses, which plough all their profits back in.

As for the sixth generation Reids, Tim and Debra have four daughters: one is married to a horticulturalist who is now the farm manager and another daughter is on the board with Tim.

Tim is now 60 but not thinking about retirement, far from it. He wants to grow the business to $20 million sales over the next five years, and given the Farmer of the Year’s achievements so far, there’s not much doubt that he will.

To visit our family business hub, click here.