Case Study: Favco

Keeping the freshest produce moving every day: CHEP’s solutions prove to be a key enabler within Favco’s supply chain

Favco was established in July 1999 as a joint venture between two established family-owned fruit and vegetable marketing businesses. Located in the Brisbane Fruit and Vegetable Markets, this industry leader supplies major supermarket chains, independent retail groups, secondary wholesalers, the food service/hospitality industry and export customers.

By using these platforms, we’ve received several major benefits relating to more sustainable supply chain efficiencies, improved freshness and quality control as well as reducing costs.

Matthew Kellythorn Business Analyst, Favco

With a vertically integrated business model consisting of over 150 growers across Australia and its company-owned farms, Favco is able to provide a consistent, uninterrupted supply of fresh fruit and vegetables throughout the seasons.

The company's supply chain and supportive transport systems are vital to delivering the freshest produce every day, which their customers have come to expect.

Speaking about Favco’s operations, Business Analyst, Matthew Kellythorn said, “Our produce is picked and packed at Favco owned farms or at affiliated growers and flow through the supply chain to wholesalers and retailers. We typically have a week from the time fresh produce is picked to final sale.

“Consistent quality and availability of fresh produce is key to our success. To assist us in both areas, we partner with CHEP,” said Mr Kellythorn.

A key differentiator for Favco is its ability to provide full category management solutions delivered by its experienced staff. This approach means that Favco works together with retailers and its other customers to exchange information, share data and develop strategic plans that will boost profit for the total category.

In line with its category management approach, forecasting is a critical activity undertaken. The team closely monitors weather conditions for growing and harvesting, and makes projections three months in advance to ensure that they have supply to meet demand. Typically, Favco’s busiest periods are April to October for citrus produce and November to February for tropical produce.

CHEP works closely with Favco to ensure that equipment is available when and where it is required. Both businesses work together to plan for equipment usage and engage in joint business meetings to unlock value.

The business utilises a mix of platforms, including crates, bins and wooden pallets from CHEP to maximise the efficiencies in moving produce between farms, pack houses and supermarkets.

Mr Kellythorn added, “By using these platforms, we’ve received several major benefits relating to more sustainable supply chain efficiencies, improved freshness and quality control as well as reducing costs.

The cardboard cartons once used by Favco to handle its produce caused a range of problems including an inability to cope with wet produce, becoming brittle in cool rooms, limited shelf life, and easily damaged by forklifts. This led to increased spoilage costs associated with damages, quality issues and customer rejections. 

“We recognise that our fruit and vegetable growers invest a lot of time and effort into their produce. To ensure we handle this produce with appropriate care within the supply chain, we made the decision to collaborate with CHEP. Since making this decision we have never looked back”, Mr Kellythorn said.

By moving from cartons to crates and bins, Mr Kellythorn explained that they have reduced product spoilage, damages and wastage. The platforms are also enabling Favco to deliver fresher produce that lasts longer on the shelf. For example, Asian vegetables including Bok Choy and Chinese Broccoli are picked straight into CHEP crates and move through to the final sale with minimal touch points, improving freshness and on-shelf availability.

Utilising these platforms have also been beneficial for the company’s sustainability efforts, as they are able to reuse these, as opposed to the cartons which were disposed of after use.

The CHEP crates in this system are washed to meet HACCP standards and can be flat packed for easy storage and improved logistics efficiencies. The crates assist Favco with maintaining high food safety standards and improve the control of temperature and air circulation.

“It is a pleasure working with the team at CHEP. They consistently deliver excellent service and collaborate with us to drive operational efficiencies in the movement of fresh produce from farm to stores.”

With the supply chain savings received by partnering with CHEP, Favco is investing in new variety development (e.g. low seeded Murcott mandarins), upgrading operations including quality systems, and expanding the exporting of its produce overseas.

If you'd like more information about growing your business through efficient and sustainable supply chain solutions offered by CHEP, please speak to your Account Manager or contact our customer service team on 0800 652 437 

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Case Study: Favco | CHEP New Zealand