The successful public campaign to save 67-year old South Australian family business, Spring Gully Foods, shows that manufacturing companies need to get in touch with their consumers through marketing and social media, a CEDA forum has heard in Adelaide.

Spring Gully Foods Managing Director Kevin Webb told the forum that he was amazed at the power of Facebook to connect with consumers after the campaign to save Spring Gully produced 16,000 "likes" over a weekend as the company entered voluntary administration (VA).

"We did not even have a Facebook page at the time (that we went into VA) so we were not quite up to speed with social media," he said.

"We saw all of a sudden people setting up 'Save Spring Gully' Facebook pages that we were not in control of.
"So we made a decision on the (day after entering VA) to take control of one and make it our own and the amount of likes we got on that official page astounded us."

The forum heard that news of the company's plight had tapped into public sentiment about the loss of local brands through liquidation or overseas sales which had unleashed a wave of buying and reversed the company's cash flow crisis. This spending spree generated $1.5m in sales in a week and forced Spring Gully to add a second shift to meet orders.

Mr Webb said the family company historically undercapitalised, had been squeezed by rising utility costs and the loss of a major contract. Its bid to diversify and generate new revenue by expanding into jams had been a failure as production difficulties led to down-time in the plant, further squeezing profits, he said.

While Spring Gully Foods had built customer loyalty across generations with its homespun recipes for pickles, gherkins and sauces and had produced home brands under contract for major supermarkets, it had not adequately marketed its products, he said.

"I think what we've learnt is that we didn't really understand what our consumers thought of us and through having Facebook there we have that immediate response and connection to our consumers," Mr Webb said.

Since emerging from voluntary administration, Mr Webb said the company was determined to strengthen the business with better financial analysis, cost accounting and marketing and to increase production of its Spring Gully brand for local, national and export markets.

"The immediate understanding of what (consumers) are thinking is a huge issue that I think every company should be on top of because if you can connect to your consumers you will have a much better way of marketing into the future," he said.

Meertens, Founding Partner and Administrator, Austin Taylor said Spring Gully had used the VA experience to build a better business.

"I think one of the learnings out of this for Kevin and the family has been the value of that little yellow label and the brand," he said.

Corporate Conversations, Public Relations Advisor, Peter Haynes, who led the media campaign, said it was critical for companies to fight the temptation to withdraw from public view in tough times as those companies who tried to lock out the media tended to suffer from negative press.

In the case of Spring Gully, the only way to turn around sales in the three days set down by the administrator was via the media, he said.

"For Spring Gully the advice was talk to the media, explain and ask for public support. It meant letting the media tell the story to the public," he said.

"Kevin didn't particularly want to face the cameras or the microphone - he's a humble, emotional man and he was worried about whether he could keep his emotions in check.

"He did a great job and anyone who watched him on television that night could have no doubt about his sincerity.

"I think it is important for companies to get out there and be telling a story about what they do. There are some good companies in South Australia that nobody knows about.

"The thing about building your profile is that it allows you to recover from these sorts of issues."

Published September 2013.