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The Power Index: foodies, Frank Costa at #6

Frank Costa first joined the fruit and vegie industry as a 17-year-old kid flirting with the female customers at his dad’s shop. The patriarch of produce is now 74, so you’d think there’d be few questions about the industry that would stump him.

And yet when The Power Index asks what his favourite vegetable is, the chairman of the Costa Group pauses for a good 10 seconds. Finally, Costa replies: “I really like peas. And potatoes.”

Minutes earlier Costa was telling us that peas were no longer popular and his business had sold off its potato farming interests just last month.

Selling off the vegies he loves? Leading the Costa Group to becoming the biggest fresh fruit and vegetables supplier to Coles and Woolworths — and therefore influencing what produce Australians eat and how much they pay for it — has helped toughen up the boy from Geelong.

I’ve always wanted to be the best,” Costa tells The Power Index. “When I went into wholesaling with my brother, we wanted to be the best in Geelong. And we achieved that. Then we wanted to be the best in Victoria. We achieved that. Then we wanted to be the biggest and best in Australia and now we’ve achieved that.”

It seems appropriate the patron saint of Victoria’s port city, with his raspy voice and perma-tan, lives in a converted bluestone church when he’s in Melbourne. But the house isn’t ostentatious, and neither is the man who owns it.

Costa takes The Power Index into his kitchen to brew up a cuppa and set out a plate of biscuits, which he nibbles on throughout the interview as Italian classical pop covers play in the background.

It’s a far cry from the late ’80s and early ’90s, when Costa and his business partner brothers battled it out with the Calabrian Mafia over a racket that saw them net 50 cents for every box of fresh produce sent into the two big supermarkets.

Coles hired the Costa Group in 1990 to run its fresh-produce section and smash the extortion scheme. It worked, but only after brother Anthony Costa made a personal threat to the Mafia when Frank was offered either a $1 million annual cash bribe or death.

The Mafia may be long-gone from the Australian produce world, but the revived supermarket wars between Coles and Woolworths has seen a bit of that rough-and-tumble return.

The way it affects us is that we’ve got to be more competitive again,” says Costa. “One of the main attractions that they’re working on offering is price. So for us to be able to supply we have to be very efficient ourselves to cut out our costs and make sure we keep them down.”

That meant making Costa Group a vertically integrated company. Costa farmers grow the majority of their produce — their main lines being mushrooms, table grapes, glasshouse tomatoes, citrus, avocados, berries and bananas — pack it, transport it immediately into cool rooms, pack it into their own refrigerated vans and then take it directly into distribution centres or straight in to supermarkets. It’s all about managing a tight cold supply chain discipline to ensure maximum freshness and shelf life, says Costa.

Rather than curse its dominance, the growers The Power Index spoke to praised The Costa Group for its leadership within the industry.

Driscolls Australia [the Costa Group’s berry brand] enables us to deal with the supermarkets from a position of strength so we don’t get picked off as small growers all over the country and just rorted by them,” says Greg McCulloch, the president of Australian Blueberry Growers Association.

Driscolls Australia grows 60% of Australia’s blueberries. McCulloch has been growing blueberries in southern Tasmania — some of which he supplies to the Costa Group — for more than a decade. McCulloch explains Costa Group paid for pesticide certifications for the berry industry for years, offers horticulture advice to growers and is far more reluctant to cut its prices for the supermarkets than smaller producers.

*Read the full profile at The Power Index

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