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Consumers' love affair with avocados upholds OGR
3 April 2018

 

A small New Zealand avocado crop in 2017, combined with continuing consumption growth in key global markets, has helped to shape the value of AVOCO’s Orchard Gate Return this season.

Market conditions of high demand and under-supply in both Australia and Asia has driven higher values, with fruit in Australian retail stores reaching close to $4 a piece. Revenue from a strong Australian sales programme and improved results from tighter supply to Asian markets where fruit carries the AVANZA brand, will deliver record returns to growers when the final OGR is revealed this month.

New Zealand exported around 2.2 million avocado trays in 2017-18 – less than half the volume shipped offshore during the bumper crop of 2016-17. AVOCO, the industry’s largest export marketer, handled about 1.3 million trays. 80% of shipments went to Australia while the remainder was sent to developing Asian markets and sold under the AVANZA brand.

AVOCO marketing and communications manager Steve Trickett says a shortage of fruit after Christmas curtailed a sales programme that had already been hindered by low volumes earlier in the season.

“Consumers’ love affair with avocados has continued and all of our customers would have liked us to supply more fruit, but they understand that seasonal variances do occur.

“The upside is that values held up strongly in all our markets and that will be reflected in our OGR.”

The season’s financial performance had been discussed by grower representatives on the AVOCO Grower Relations Committee who are pleased that AVOCO has been able to deliver strong returns to its group of 800 growers across the Bay of Plenty, Mid-North and Northland.

“We’ve kept our growers informed on favourable market conditions throughout the season, but our final payment will likely still come as a pleasant surprise, well ahead of budget,” says Mr Trickett.  “But I would also expect our results to motivate non-suppliers to take a hard look at their own payments and weigh them up against what they could have received if they’d supplied AVOCO. Since its formation, AVOCO has consistently delivered significantly better tray returns than those of our competitors. We are keen for all growers to understand that and to calculate the revenue forfeited by not being part of the AVOCO programme.”

2017-18 is AVOCO’s fifth operative season since exporters Team Avocado and Primor Produce united in 2013, a move that reinvigorated the entire avocado industry.

A seasonal highlight is the performance of Korea, which has become the most important avocado market for New Zealand by volume and value outside of Australia.

New Zealand shipped more than 145,000 trays to Korea, with AVANZA accounting for 66% of the volume. Returns per tray in this rapidly developing market improved by close to 20% compared to the previous season.

AVANZA’s four years of promotional activity in Korea and educating consumers on the fruit’s health and versatility benefits was paying off, says Mr Trickett.

“AVANZA has done a stellar job of stimulating the appetites of Koreans for avocado which, in just three years, has gone from a relatively unknown fruit to a readily demanded produce item for many health-conscious consumers.”

In-store demonstrations and making ripe, ready-to-eat pieces available on the retail shelf was among AVANZA’s proven promotional strategies that are now being applied in North and South-East Asian markets, as well as India.

“AVANZA continues to lead the way in market development in major markets across Asia where, as crop volumes allow, we see real opportunities for future growth, with the recently opened China market being the next new frontier.

“At the same time, we have built up strong, trusted and valuable supply relationships with Australia’s leading retail chain operators. Combined, all of this helps us deliver the impressive financial returns our hard-working growers have come to enjoy with AVOCO, from one season to the next.”

 

 

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