Three years ago, dairy farmers Donald and Maree Anderson bought the Rahotu Four Square, both as a business venture and to keep their community alive. For many years, the store has provided their business and employees with daily necessities like bread and milk, postal services and farm supplies, and they wanted that to continue.
For a farm business which employs 14 people, local conveniences are vital. “It’s very important to the farm community and farm business that it stays open,” says Donald.
“How do we attract people to our farm business and keep them in our community if they have to drive 21km for bread?” Donald and Maree have farmed in Rahotu for over 25 years.
They have built a solid business, fine-tuning their finances during the early years of low payouts and high interest rates.
“The difference then was you had to pay interest and principal. We had to be very good budgeters – overdraft interest rates were 24 percent,” says Maree.
“The support for young farmers now is phenomenal through DairyNZ Progression Groups and AgITO courses, it’s a great time to be a young farmer with the higher payouts and the lowest ever interest rates,” says Donald. The couple have gradually established four dairy farms totalling 575ha at Rahotu and 200ha at Hawera, plus a dry stock property.
“We bought lots of little land titles to join farms together. We’ve had opportunities to go to the South Island but chose to stay here – this is where we were brought up and where we wanted to bring our children up. It’s home.”
The farms are all-grass systems, with minor inputs of PKE (palm kernal expeller) to fill feed gaps. Variable order sharemilkers run each farm and one of Donald and Maree’s four children, Kate, also works on one.
The business’s cost of production this year is $2.30-2.60kgMS (excluding labour). “We run a low-cost, low-risk system focusing on pasture utilisation, maximising our appreciating assets and minimal investment in depreciating assets,” says Donald.
The Andersons’ eye for investment went beyond farms when the local Four Square came up for sale in 2009.
They bought the store in February 2010, from the previous owner of 16 years.
The Four Square dovetails nicely with the dairy farm business – low capital cost and high, consistent cashflow, compared to the farm’s high capital and variable cashflow.
“From a business point of view it was risk management, we felt it would provide security during the global financial crisis,” says Donald.
The Foodstuffs’ Four Square stores are also a cooperative. “So we understand how that works. We own shares based on turnover, like the dairy industry. But it’s paid on a five year average.”
Maree runs the Four Square alongside 10 local employees, including high school students.
“Certain businesses are really important to our business and one of those is the local Four Square,” says Maree.
“It’s important it stays open and well managed. It’s the local post shop, lotto and liquor outlet, grocery store, weekend farm supplier and has food to go.
“We consider the local store a very important business for the community – along with the primary school and the gas station. They have to stay,” says Donald. “Other facilities are also important like the rugby club, fire brigade, pub, bowling or golf club.”
With the closure of five local primary schools in the region, the Rahotu community has been fortunate to keep its school. The Four Square frequently sponsors the school and local clubs. “As a shop, you have to cater to the community and its needs.”
The Andersons themselves aren’t your typical Four Square owners – Foodstuffs owner-operators usually come through the supermarket system.
But the Four Square has given Donald an insight into the ‘other side’ of the business – retailing products on the shelf and into customers’ trolleys.
“On the farm, once it’s out the gate we forget about it. This way, we’ve seen the other side of the business,” says Donald.
“I like seeing the big picture of how the Foodstuffs cooperative works and how it interacts with Fonterra. It’s given me an insight into the marketing process – wholesale, distribution, branding, advertising. That’s been really interesting, I really enjoy that.”
A new business opportunity for the Andersons means the Rahotu Four Square is now up for sale. “Our plans have changed earlier than we’d planned, so we’ve decided to put the shop on the market. We’d really like to sell it to community-minded people, if possible, as we’d like to see the shop continue as a part of the community.”