Bluelab is a New Zealand exporter manufacturing equipment that accurately measures the potential of hydrogen (pH), electrical current (EC), and temperature in controlled agricultural environments. Bluelab also produces purpose built open-field products too, however, their focus remains on controlled environments. Controlled agricultural environments are defined as a combination of engineering, plant science, and computer managed greenhouse control technologies used to optimise plant growing systems, plant quality, and production efficiency. Under these controlled conditions, growers around the world require state-of-the-art testing products to ensure potential plant quality and cultivation efficiency is maximised. With Bluelab’s advanced range of pens, meters, monitors, testing and maintenance equipment, controlled environment cultivators can do exactly that. Coupled with the liberalisation of cannabis across North America and the Netherlands, Bluelab has expanded significantly into growing markets in North America, Europe, Asia, and Australia. Today, a whopping 98 per cent of their customers now come from the export market. Anywhere an environment needs to be controlled, Bluelab strive to be there.
As part of ExportNZ’s 50th Anniversary, Bluelab’s former CEO Greg Jarvis joined us for an interview to delve into the organisation’s story of international success since it’s purchase in 2000. During the interview, we discuss Bluelab’s exporter story, their innovative research and development strategy, the impacts of the Global Financial Crisis (GFC) and COVID-19, and invaluable advice to emerging exporters.
Bluelab’s Exporter Story from 2000 – 2022:
Greg first purchased Bluelab’s predecessor organisation in 2000 when that company was only marginally involved in the export market. However, Greg recognised that Bluelab’s predecessor had five key pre-existing distributors worldwide in North America, Europe, and Oceania that the company could effectively grow with. As a mark of the organisation’s new focus into the export market, the company was rebranded to Bluelab and began developing new innovative products for controlled environments. Greg tells us that this period from 2000-2004 was primarily characterised by research into international markets and developing products that aligned with the demands of each market.
From 2004 onwards, Bluelab had developed a diverse pallet of products ready for market and began campaigning regularly across international borders to talk to their in-market customers. However, instead of trying to target the entire market, Bluelab focused on customer niches that best suited the business’s aims. In Greg’s words, “Over time, we realised that not every customer is necessarily the best customer for the business. We asked ourselves who the customers were that we wanted to be in partnership with for our products and what we wanted to achieve with them. Consistently asking yourself these questions are essential to ensure that company resources are allocated to the right niches that’ll bring your company the most success.”
Perseverance with their distributors as the controlled environment market grew was fundamental to further understanding the organization’s ability to meet customer, industry, and market demands. For example, Greg found in 2009 that systematically going into retail stores, attaining valuable shelf space for Bluelab products, and educating retailers on product functionality was central to developing an in-store salesforce. These changes reflected in higher sales without Bluelab needing to employ their own workforce. In this regard, Greg believes that perseverance is a key characteristic to any exporter’s success in overseas markets.
“You’ve got to be prepared for the long-haul. If you believe that your product or service has a market, then you must persevere with it. A question you must always ask yourself is ‘what am I offering that is not available to customers already? From the get-go, it took my team years to break down doors with channel partners and retailers. With perseverance however, you need to adopt a global view, speak their language of business, and understand their culture to gain these customers. For example, Americans expect you to manufacture on-time and to specification while maintaining the highest level of accountability. You need to take away the perception that you are geographically far from the customer and create the perception that you’re there throughout the entire process for your customer.”
As testament to their growth in the North American market specifically, Bluelab achieved an important milestone when the organization employed their first US-based worker in 2010. This development strategically coincided with Bluelab’s adoption of a customer-centric approach that sought to create customer-led products as opposed to “designing a product in NZ and hoping the world would buy it.” By having staff working in the US market, Bluelab ensured that customer demands are always heard and implemented into innovative products. Today, Bluelab employ over 15 people in their warehouse and office in the US, with the market representing an incredible 70 per cent of the exporters business. Greg explains that the journey was about adding people according to market demand, with the employment of customer service representatives, distributors, warehouse workers, and administrators as customers’ needs grew.
“The first thing to make sure of with exporting is that you’ve correctly targeted a market segment within a geographical region that’ll best position your products to sell. There is no substitute for visiting the market and seeing what it’s like on the ground floor. It may be cheap to research online but it only target searches from your local area, not from the area your customers search from. I think the differences between selling in the New Zealand market and abroad is what shocks SMEs most in the beginning.”
In the European market, Bluelab began employing workers around 2015. As will be discussed, this again coincided with important strategic changes to the organization after their new COO and now CEO joined Bluelab and reimagined their approach to innovation. Since then, Bluelab now has three employees in their offices in the Netherlands and works with a third-party logistic warehouse to distribute their products. Together, this infrastructure strongly positions the company to push into the largely untapped potential of the European market. Greg explains that their employment was particularly necessitated to meet international time-zone differences and branch linguistic barriers between partners and customers.
In Asia, Bluelab recently acquired an Auckland company with access to markets in South-East Asia where the organization had previously little exposure. This marks a significant development for Bluelab as an entirely new and potentially lucrative opportunity to expand onto a truly inter-continental level. When asking Greg where he wanted Bluelab to be in 2032, he tells us that “We want to be geographically widespread across the world with new markets in Asia, South America, and Africa. We want hubs of Bluelab’s software heavy products across the world.” We here at Export NZ have high hopes for Bluelab’s continued success and after reading of their innovative research and development strategy, we believe you will too.
Ten Types of Innovation – Bluelab’s Research and Development Strategy:
In 2015, Jono Jones joined Bluelab’s senior leadership team as their Product Development Manager. In this position, Greg explains that Jones drove the organisation’s growth and strategic direction with his unique customer-centric approach to research and development. Specifically, Jones achieved these organisational gains through his implementation of the ‘Ten Types of Innovation’ model. These ten types are:
- Profit model – The way in which you make money
- Network – Connections with others to create value
- Structure – Alignment of your talent and assets
- Process – Signature of superior methods for doing your work
- Product performance – Distinguishing features and functionality
- Product system – Complementary products and services
- Service – Support and enhancements that surround your offerings
- Channel – How your offerings are delivered to customers and users
- Brand – Representation of your offerings and business
- Customer engagement – Distinctive interactions you foster
Using this research and development model, Bluelab gained an in-depth understanding into the organisation’s strengths and weaknesses in both the macro and micro-environments in which they operate. Most importantly, Bluelab understood what really makes their business tick the boxes of customers compared to their competitors. As a result, the organisation has since skilfully tailored their brand, organizational structure, and service offerings to maximise their engagement with customers across international markets.
GFC and COVID-19:
From the GFC’s devastating impact on the global economy, Bluelab learnt that under their strategic positioning, the organisation’s resources were spread too thinly across multiple international markets to achieve desirable growth. Consequently, they made the strategic decision to recalibrate their resources into their most successful and lucrative market, the US. This didn’t mean that Bluelab would pull out of other markets but ensured that adequate resources would be allocated to creating a strong and adaptable infrastructure that guaranteed revenue continuity through crisis. Additionally, Greg explains that “The Global Financial Crisis gave us the urgency to cull a lot or products that weren’t selling well and had high production costs with little profit margins. We used the 80-20 rule, which made sure that 80 per cent of our outputs come from 20 per cent of our best-selling inputs. This narrow product range ensured that we were targeting exactly what our customers wanted.”
When the COVID-19 pandemic hit, Greg details how Bluelab was restricted to selling only a few of their spare parts because they were unable to manufacture anything through lockdowns. This was especially tough for the exporter with customers demanding products that they simply didn’t have manufactured and available to sell. As a result, Bluelab now prepares their US warehouse with at least a month to two months of available inventory as an economic buffer in case anything was to unexpectedly occur at home. “These changes completely changed our supply chain to become far more resilient against potential economic shocks. We are also considering producing products in the US and European markets in the long-term to further make sure we don’t leave all our eggs in one basket.”
Sage Thoughts from Twenty-Two Years of Experience in Export:
Greg’s twenty-two years of experience under the helm of Bluelab has provided him with wonderful personal insights into the export and manufacturing industries. As the controlled agricultural environment market continues to grow, Bluelab will certainly solidify its position as a top market competitor. We asked Greg as a market-leading exporter on his thoughts regarding the current export market and his approach to leadership. Below are some insightful excerpts from our interview that we found invaluable for current and future exporters.
What makes you nervous about exporting these days?
“Supply chain issues make me most nervous with exporting these days. New Zealand is uniquely constrained by supply chain issues due to our geographic isolation and with many companies bypassing New Zealand as our smaller market is less profitable. The difference the pandemic has made is that the reliability of supply chains has significantly reduced. The question of when we are going to get the parts at the right time and price will unfortunately persist for many Kiwi exporters. Are we ever going to get back to that certainty? We can’t do just in time production anymore as we must hold inventory against supply chain unreliability to mitigate that risk. The days of an easy supply chain are over.”
What excites you about exporting and where do you see the most opportunity?
“The number of people involved in the technology industry for exporting companies is what excites me the most about exporting. The products and services coming out of New Zealand are world-leading! Bluelab has an opportunity to be part of that technological development to increase our capability with software that can provide actionable insights for the grower. 2032 for Bluelab looks like integrating these software solutions into our quality products.”
What’s your approach to leadership?
“My personal approach is to bring the team with you and make sure that they are onboard with what you’re doing. It’s crucial to have alignment across the organisation to effectively execute on strategy. It’s about co-creating not micromanaging.”
Any words of wisdom for leaders in the industry and people coming through?
“It’s a marathon, not a sprint – not everything needs to be done immediately. There’s a lot to be said for leaders developing their business overtime by understanding the idea that growth overtime is better than trying to do everything at once. It’s better to move one thing forward a long way than trying to move many things forward a small way.”
If you could leave a mantra behind to be remembered, what would that be?
“Think about exporting as what the market wants form us as opposed to what we want of the market.”
Special acknowledgement: James O’Riley (a bright young 2nd year Otago University student studying Management, History, Politics) interviewed exporters over the last few months. James has written some excellent pieces for us. This is the first in a series celebrating 50 years of ExportNZ.