Saving Spring Gully Foods

In 1947, an iconic South Australian brand was born – Spring Gully Foods was founded by Edward McKee on an orange orchard he purchased for 30 pounds in the Adelaide suburb of Rostrevor. He added hens to the farm he called Spring Gully for fertiliser for the orange trees and of course a new product line – eggs.

The early days of Spring Gully Foods

The Spring Gully brand is born

At first, Spring Gully farm supplied oranges and eggs to local stores. It wasn’t until Ted’s customers started to want his pickled onions all year round (and not just for Christmas), that the Spring Gully Pickles business emerged.

Other family members joined to help and the business expanded with new facilities and broader distribution, supplying supermarkets in South Australia and Western Australia.

The emergence of a household name

In 1993 the company moved into their purpose built premises at Dry Creek in Cavan, South Australia. The facility enabled Spring Gully to meet their stringent quality control standards, plus provide room for continual expansion.

Over the next decade, the Spring Gully brand had established itself in the Eastern States of Australia and into New Zealand, as well as actively developing export markets in the Asia Pacific region.

Today, Spring Gully Pickles is just one of a group of popular Australian brands which form the recently founded parent company, Spring Gully Foods Pty Ltd, still family owned and operated, with an experienced fourth generation team continuing the expansion of the business into the future.

Strategic growth and acquisitions

Spring Gully Foods has acted on the opportunity to purchase a number of leading companies in recent years. Utilising the production, marketing, distribution channels and administrative infrastructure already established for Spring Gully Pickles, the company has been able to easily accommodate the recent grocery acquisitions of Leabrook Farms Honey and Gardener as well as a bottled water product called Nuqua.

Spring Gully Foods rangeSpring Gully manufactures a range of traditional food products, including  gherkins, onions, Worcester sauce, green tomato pickles and sweet mustard pickles and has a workforce of around 42 people.

Crisis point

In April, 2013 Spring Gully faced almost certain closure. A sudden drop in sales left the company with overall debts of around $11 million and it called in an Administrator to take control. The Administrator, Austin Taylor of Meertens Chartered Accountants, believed he would have little option other than to wind Spring Gully up without a massive and immediate turnaround in sales.

News that the iconic third generation Adelaide company faced closure sparked a  unprecedented show of support by South Australian consumers, supermarkets, media and the public.

Almost overnight, the company was able to generate new sales and contracts that enabled the Administrator to continue to operate the company.

Spring Gully turns a corner

So massive was the show of support that Spring Gully was forced to add a second shift as major supermarket chains responded to public support with new orders and contracts.

On July 1, unsecured creditors voted at the second creditors meeting to accept a Deed of Company Arrangement (DOCA), enabling the company to return to family control.

Under the terms of the DOCA, unsecured creditors will receive 100 cents in the dollar for outstanding debts, with quarterly dividend payments being made until creditors have received full restitution.

Spring Gully has now embarked on a process of rationalising and expanding its range to make its offering more relevant to modern consumers and is also in the process of upgrading its Dry Creek factory, with the assistance of a $576,000 State Government grant for new equipment.

“The only reason we have a future is because of the public support we received. We owe a huge vote of everyone who supported us and continue to support us.,” Mr Webb said.

If you’d like to hear first hand how Spring Gully foods managed their way through a crisis that would have certainly ended most businesses, attend Breakfast at the Next Level on Wednesday 2nd April, 2014 when host Stan Kontos interviews Spring Gully Managing Director, Kevin Webb. Tickets for this breakfast are just $49 per person (including a hot breakfast) and can be purchased online through SOL Results here.