Money, and family, for jam

Apart from our German heritage, Anthony Paech (pronounced pake) and I have something else in common: our first job after leaving school was picking strawberries.
 
Anthony is the son of a strawberry farmer; I just wanted to get out of town for a few weeks and make some money for the summer. His father paid him $1 an hour, which, even then, wasn’t much. I was paid by the amount picked and after subtracting the strawberries I ate and paying for the booze and food from the store on the farm where I was staying in a tent, I came home after three weeks with $2.56 and a lifelong distaste for strawberries.
 
Anthony Paech went on to inherit and manage one of Australia’s most appealing family businesses, Beerenberg Farm jams and preserves (beerenberg is German for berry mountain).
 
You’ll see it if you drive from Adelaide to Hahndorf in the Adelaide Hills. It’s a family-owned farm established in 1839: the jam and chutney factory is on the farm and it’s now a tourist attraction and in springtime the place is thick with people picking their own strawberries (the ones in your stomach are free).
 
For four generations until 1969, the Paech farm was a pretty normal Adelaide Hills dairy property, started by Johann George Paech who came out from Prussia on the “Zebra” with Captain Dirk Hahn, after whom Hahndorf is named.
 
Grant Paech, farther of Anthony, son of Herman, and fifth generation descendant of Johann, decided in 1969 to grow strawberries instead of milk. It’s not entirely clear why. It certainly wasn’t to get out of the early starts: it meant getting up 1am instead of 5am, to get the produce to market in Adelaide.
 
Then he built a shed on the side of the main road to Adelaide to sell berries from there, and Anthony can remember him coming back and complaining that he couldn’t get any building done because people kept interrupting him to buy strawberries. He put a door on the shed and it became a shop, the family’s first.
 
Soon after that he got out his wife Carol’s copy of the Green and Gold Cookbook, a South Australian classic first published in 1923 as a fundraiser for King’s College, (now Pembroke School in Kensington Park). He looked up the recipe for strawberry jam and made some right there in the kitchen and took it down to the roadside shop. The passing punters loved it.
 
Carol quickly kicked him out of the kitchen so he went to an abandoned golf clubhouse up the road and turned it into a jam kitchen. He soon branched out into other jams, chutneys, pickles and sauces – all from the Green and Gold Cookbook.
 
He and the kids used to drive down to the Adelaide wholesale fruit and vegetable market early in the morning to sell the jars to the greengrocers who came there to buy their produce each day. It was tough, but exciting.
 
Then in 1985, 15 years after he started making strawberry jam in the kitchen, Grant Paech got his first big break. The South Australian Premier at the time, John Bannon, wondered aloud in an interview why Qantas couldn’t use a South Australian jam on its planes instead of imported ones.
 
Grant rang up the State Government’s small business body and got some help sourcing small glass jars and funding a new machine. They introduced him to Qantas and the rest, as they say, is history. Beerenberg portion jams were supplied to passengers on Qantas flights and the business took off, both because of the sales to Qantas but also the brand recognition that resulted.
 
Later the family got their jams into Woolworths and went national, having become well known in South Australian delis. They bought new machines and expanded the range (now 65 different products) and started exporting to other airlines, as well as the Japanese catalogue gift market.
 
There are three 6th generation Paechs in the business: Anthony, managing director, his brother Robert, farm manager, and his sister Sally, marketing manager. The three of them have seven children between them, ranging from 15 down 18 months old.
 
Anthony, Robert and Sally have a strong sense of responsibility to their family company, having watched their parents work incredibly hard and plough all profits back into the business. They never spent much on themselves, which is the key to its success – all the money was reinvested.
 
So a perpetual trust was set up to own the business and the trust deed requires a unanimous vote for it to be dissolved so the business can be sold: that is, unless every member of the trust agrees, the business cannot be sold. What’s more, it is impossible for an individual to sell out. It’s all in, or nothing.
 
There are no outside directors, but they have regular family councils to decide the direction of the business. These include Carol, but usually not Grant who, at 72, is unwell and in a nursing home.
 
As for the next generation, they have resolved that the children must prove themselves outside the business before they come into it, to be fair to the rest of the staff.
 
There are 54 staff and the business turns over $15 million. It’s quite profitable, but there are still no dividends – all profits are put back.
 
The export business has declined 15 per cent over the past few years because of the high dollar, but there are signs now that it’s coming back as the dollar falls.
 
Where to from here? The United States. “There is huge potential in the US,” says Anthony. “Europe is closed to us because of the sugar levy in the Common Agriculture Policy, which adds 20-30 per cent to our prices there.
 
“And of course France can compete freely with us in Australia – no protection here at all, which is another story. It drives me nuts. Why would anyone buy French jam when they can get perfectly good Australian jam.”
 
I suppose that’s the difference between Australia and France: we can buy French jam but they can’t get “perfectly good” Australian jam.
 
Anyway, America will do.